NEWS

*CHS finished the third quarter with net income of $297 million. That compares to $547.5 million in the same quarter last year. For the first nine months of the year, the nation’s largest farm cooperative has net income of more than $990 million. That’s the third highest net income in company history, but down from the record $1.6 billion one year ago. In the ag segment, margins were lower for crop inputs, but the volume of business increased. Less favorable refining margins influenced the CHS energy business.

CORN

ANALYSIS

Corn closed the week $.10 3/4 lower. Last week, private exporters announced sale of 5.3 million bushels (mb) of corn to an unknown destination.

In the weekly export inspections report, U.S. corn export inspections, for the week ended July 11, were 42.5 million bushels, comparable to the previous week’s 16.5 mb while being sharply higher than year-ago, same-week exports of 16.5 mb and continuing the run a bit above the “needed” pace to reach the USDA’s just-raised 2023-24 export projection of 2.225 billion bushels. Over the last four weeks, corn export inspections averaged 40.2 million bushels. Corn will need to average 35 million bushels/week to reach the USDA’s new 2.225 billion bushel export target with only seven weeks now remaining in the 2023-24 marketing year. Cumulative export inspections of 1.756 billion bushels are up 31% from last year’s 1.337 billion vs. the USDA now estimating this year’s exports will be up 33.9% from last year.

In the weekly EIA report, U.S. ethanol production rose to a 29-week high 1,106K barrels per day for the week ending July 12, up from 1,054K bpd the previous week, and up from 1,070K bpd in the same week last year. U.S. ethanol stocks fell to 23.2 million barrels, down from 23.6 million barrels the previous week, but equaled the stocks in the same week last year.

In the weekly crop progress and conditions report, U.S. corn conditions were unchanged from the prior week at 68% good/excellent vs. 69% expected, 68% last week and 57% last year. Iowa lost 2% to 74%, Minnesota lost 1% to 58%, Nebraska lost 2% to 78% while Missouri is unchanged at 79%, Indiana unchanged at 67% and Illinois gained 6% to 73% g/e. 41% of the crop is in the silk stage and 8% is in the dough.

STRATEGY & OUTLOOK

Producers have established a floor with put options and put/call spread as well as making 2024 cash sales. One hundred percent protection is advised.

SOYBEANS

ANALYSIS

Soybeans closed the week $.29 lower. Last week, private exporters announced sales of 18.7 mb of soybeans to an unknown destination and 255,000 mts of soybean meal to an unknown destination.

U.S. soybean exports last week of 6.2 mb, down from the previous week’s 10.8 mb and were a new low for the 2023-24 marketing year with only seven weeks now remaining for the old crop balance sheet. Additionally, soybean exports have been running a bit behind the pace needed to reach the USDA’s 1.700 billion bushel export projection, which they left unchanged in last Friday’s WASDE report, as export inspections have averaged 10.4 mb/week over the last four weeks (10.5 million/week over the last 8 weeks) vs. the roughly 13.9 million/week average that will be needed to reach the USDA’s export target. Cumulative export inspections of 1.544 billion bushels are down nearly 16% from last year’s 1.833 billion vs. USDA estimating exports will be down 14.1% from last year.

The crop progress report showed U.S. soybean conditions were unchanged from last week to 68% good/excellent vs. 69% expected, 68% last week and 55% last year. Iowa lost 4% to 72% g/e, Minnesota lost 2% to 58%, Nebraska was unchanged at 77% while Missouri gained 1% to 76%, Illinois gained 7% to 73% and Indiana gained 1% to 67%. Eighteen percent of the crop is setting pods while 51% of the crop is blooming.

The NOPA crush report came in below estimates at 175.599 mb vs. estimates of 177.0 mb. This is also below last month’s 183.6 mb although well ahead of last year’s 165.0 mb. However this was easily a new record for the month as it surpassed 2020’s 167.3 mb. Soybean oil stocks were 1.622 bp vs. estimates of 1.669 bp and last month’s 1.724 bp and even last year’s 1.690 bp.

STRATEGY & OUTLOOK

Producers have established a floor with put options and put/call spread as well as making 2024 cash sales. One hundred percent protection is advised.

WHEAT

ANALYSIS

For the week, Chicago wheat closed $.05 1/2 lower and Kansas City wheat closed $.02 higher. Last week, Egypt purchased 720,000 mts of Russian wheat and 50,000 mts of Bulgarian wheat.

U.S. wheat export inspections last week were solid at 19.6 mb, up from the previous week’s 12.6 mb and last year’s same-week exports of 10 mb, while being the highest of the first six weeks of the 2024-25 marketing year so far. With cumulative export inspections at 83 million bushels vs. 66 million a year ago, wheat exports will need to average roughly 15.5 mb/week over the remainder of the marketing year to reach the USDA’s just-raised 825 million bushel export projection vs. last year’s 13.5 million/week average from this point forward.

In the weekly crop progress and conditions report, spring wheat conditions were up 2% to 77% good/excellent vs. 75% expected, 75% last week and 51% g/e last year. Minnesota lost 7% to 81% g/e with North Dakota up 1% to 82%, Montana up 8% to 73% and South Dakota lost 9% to 66%. Winter wheat harvest advanced to 71% complete vs. 74% expected, 63% last week, 53% last year and 62% average.

STRATEGY & OUTLOOK

Producers have established a floor with put options and put/call spread as well as making 2024 cash sales. One hundred percent protection is advised.

LIVE & FEEDER CATTLE

ANALYSIS

Last week, live cattle closed $.35 higher while feeder cattle closed $3.35 lower.

The monthly Cattle On Feed Report should be considered friendly with the lowest placements in eight years at 93.2% vs. 97.2% estimated; while on feed supplies were 100.5% vs. estimates of 101.1% and marketings were a nine-year low at 91.3% vs. 91.7% estimated.

Last week, moderate fed cattle volumes traded in the North at $196 live and $310 dressed, which is $2 softer both live and dressed compared to last week. Moderate trade occurred in the South at $187 to $188 live, which is steady to $1 lower compared to the previous week.

The latest USDA steer carcass weights were up 5 pounds from last week at 916 pounds which is 24 pounds above year-ago levels.

The weekly export sales report has net beef sales of 15,400 mts for 2024 with shipments at 15,600 mts.

STRATEGY & OUTLOOK

Producers should have re-established window or fence strategies to protect the downside but allow for upside potential as values approach weekly resistance.

LEAN HOGS

ANALYSIS

Lean hogs closed the week $2.87 higher.

Iowa/southern Minnesota weekly hog weights for the week ending July 13 saw weights decline to 284.7 pounds from 285.3 pounds the week prior but they are still above the 277.9 pounds last year.

The weekly export sales report has net pork sales of 23,700 mts for 2024 with shipments of 31,900 mts.

STRATEGY & OUTLOOK

Producers should have re-established hedges as values tested weekly chart resistance and commercials were hedging.