NEWS

*NFA has permanently prohibited East West Global LLC, a former NFA Member commodity pool operator located in Glencoe, Illinois, from reapplying for membership and from acting or being listed as a principal of an NFA Member. NFA has also permanently prohibited Luke James Adrian, a former principal and associated person of East West Global, from applying for NFA membership, reapplying for NFA associate membership and from acting or being listed as a principal of an NFA Member. The BCC’s complaint alleged that East West Global and Adrian violated NFA Compliance Rules 2-2(a), 2-4, 2-29(a) and 2-29(b) by engaging in a deceptive course of conduct involving a commodity pool they operated, called iFund Diversified I, LLC (the Fund). The Complaint alleged East West Global and Adrian made material changes to the Fund that involved how the firm and Adrian used participants’ retirement funds, and which changed the entire tenor of the investment, but failed to adequately disclose the changes and their consequences to participants and failed to act in participants’ best interests. The complaint further alleges that East West Global and Adrian misled participants to believe they would receive their initial investments back, despite a substantial shortfall in the Fund, and used deceptive and misleading communications and promotional materials.

*The Commodity Futures Trading Commission issued an order simultaneously filing and settling charges against Cost Management Solutions, LLC (CMS), a Texas corporation. The order finds the respondent failed to register as an Introducing Broker (IB) and requires CMS to pay a $100,000 civil monetary penalty. The CFTC also orders CMS to cease and desist from further violating the CEA, as charged. The order finds from at least May 2018 through the present, CMS acted as an unregistered IB by soliciting and accepting orders for swap and options transactions for its clients. CMS mainly brokered transactions in energy commodities, including propane, heating oil, and crude oil. CMS’s IB activities included: identifying counterparties; price discovery; negotiating trades; and trade execution. CMS did not accept any money, securities, or property to margin, guarantee, or secure these transactions. CMS received fees from its clients for its brokerage services.

CORN

ANALYSIS

Corn closed the week $.08 1/2 lower. Last week, private exporters announced sales of 6.5 million bushels (mb) of corn to an unknown destination and 5.4 mb of corn to Mexico.

In the weekly export inspections report, U.S. corn export inspections, for the week ended Aug. 8, were 38.4 million bushels, while declining to a six-week low as the 2023-24 marketing year winds down with only three full weeks remaining. Cumulative Export Inspections of 1.926 billion bushels are up 37.1% from last year’s 1.404 billion vs. USDA estimating exports to be up 33.9% from last year.

In the weekly EIA report, U.S. ethanol production, for the week ende Aug. 9, ticked up to 1.072 million barrels/day from 1.067 mbpd the previous week and was up a minor 0.3% from last year’s same-week production of 1.069 mbpd, leaving the most-recent four-week average production running 2.2% above year-ago levels. While this week’s year-over-year production comparison was muted relative to recent weeks, the overall production pace continues to run a bit above the “needed” pace relative to the USDA’s 5.450 billion bushel 2023-24 corn for ethanol usage estimate. U.S. ethanol stocks last week declined solidly to 23.354 million barrels from 23.767 million barrels the previous week, putting mid-August stocks right in line with those of the last two years both at 984 million gallons and modestly below record stocks for the week of 1.003 billion gallons in 2019.

In the weekly crop progress and conditions report, U.S. corn conditions came in at 67% good/excellent vs. 66% expected, 67% last week and 59% last year. Silking is 94% complete vs. the 2019-23 average at 94%. Corn dough is 60%, 4% above the five-year average and 18% of the corn is dented, 6% above the five-year average.

In the supply/demand report, the USDA pegged U.S. corn yields at 183.1 bpa vs. estimates of 182.2 bpa and the July figure of 181.0 bpa. This was a new record. They revised harvested corn acres by 700,000 lower to place production at 15.147 bb. Exports were increased by 75 mb with feed usage lowered by 15 mb to put ending stocks at 2.073 bb, down from 2.097 bb last month. The stocks to usage ratio is at 13.9%, the largest since the 2019-20 marketing year. World ending stocks for 2024-25 were lowered by 1.4 mmt at 310.2 mmt vs. 311.5 mmt estimated.

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. Do not lift hedges as harvest lows have not been achieved yet.

SOYBEANS

ANALYSIS

Soybeans closed the week $.46 1/4 lower. Last week, private exporters announced sales of 4.9 mb of soybeans to China and 11.0 mb sold to an unknown destination.

U.S. soybean export inspections last week were 12 mb and, while up slightly from the previous week’s 9.8 mb, soybean shipments continue to run below the roughly 15.7 mb/week average we estimate will be needed over the final three full weeks of the 2023-24 marketing year to reach the USDA’s 1.7 billion bushel export projection. Over the last four weeks, soybean inspections averaged 12.3 mb/week and 11.4 mb/week over the last eight weeks. Cumulative export inspections of 1.593 billion bushels are down 15.3% from last year’s 1.882 billion vs. USDA estimating exports to be down 14.1% for the year.

The crop progress report showed U.S. soybean conditions 68% good/excellent vs. 67% expected, 68% last week and 59% last year. There was a 1% shift from the excellent to the good category. Setting pods is at 72% vs. 70% average.

In the monthly supply/demand report, the USDA increased U.S. soybean yields to 53.2 bpa from 52.0 bpa last month. They increased soybean acres by 1 million to 4.589 bb, up 154 mb from last month and increased exports by 25 mb and residual usage by 4 mb to increase ending stocks by 125 mb from last month to 560 mb from 435 mb a month ago. Soybean stocks to usage is 12.8%, the highest since 13.3% during the 2019-20 marketing year. World ending stocks for 2024-25 increased by 6.3 mmt at 134.3 mmt vs. 128.0 mmt estimated.

The NOPA crush report came in at 182.881 mb, slightly above estimates of 182.4 mb but well above last month’s 175.6 mb and last year’s 173.3 mb. Soybean oil stocks came in well below estimates at 1.499 bp vs. 1.608 bp estimated, 1.622 bp last month and 1.527 bp last year.

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. Do not lift hedges as harvest lows have not yet been achieved.

WHEAT

ANALYSIS

For the week, Chicago wheat closed $13 3/4 lower and Kansas City wheat closed $.15 3/4 lower.

U.S. wheat export inspections last week were a marketing year high at 23.9 mb, rising from the previous week’s 17.3 mb and notably surpassing last year’s same-week exports of 9.9 mb. Over the last four weeks, wheat exports averaged 16.9 mb/week vs. 14.1 mb/week during the same period last year, allowing cumulative export inspections of 155 million bushels to hit a 26.7% gain vs. last year’s 122 million while the USDA’s 2024-25 825 million bushel export projection reflects an expected 33.9% increase for the year. In order to reach the USDA’s current export target, wheat shipments will need to average roughly 15.3 million bushels/week through the end of next May vs. last year’s 13.5 million/week average from this point forward.

In the weekly crop progress and conditions report, weekly spring wheat conditions were down 2% from last week at 72% good/excellent. Conditions in the good category dropped from 63% to 59% and the excellent percentage went from 11% to 13%. Spring wheat harvest is 18% complete, up 12% from last week but 3% below average. Winter wheat harvest is 93% complete vs. 93% expected (92-95% range), 88% last week, 91% last year, 91% average.

The USDA lowered planted wheat acres by 900,000 but raised yields from 51.8 bpa to 52.2 bpa, resulting in production 26 mb lower than last month at 1.982 bb. This resulted in ending stocks falling from 856 mb to 828 mb. Stocks-to-usage ratio is a whopping 42.2%, the highest since the 2019-20 campaign when it was 49.2% Spring wheat yield estimated at 52.6 bpa, down from 53.1 bpa last month and harvested acres were lowered by 555,000 acres with production lowered to 5.4381 mb from 5.7784 mb last month.

World wheat production in August totaled 798.28 MMT vs. 796.19 MMT in July. Increases were primarily seen for Australia, Kazakhstan, and Ukraine more than offsetting lower EU and U.S. production decreases.

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 $3.05 lower while feeder cattle closed $3.87 lower.

Last week, moderate fed cattle cash trade volumes in the North at $190 live and $298 dressed, which is $3 softer live and $7 lower dressed compared to last week. Moderate trade in the South at $185 live and $293 dressed, which is mostly $1 lower live than last week.

The latest USDA steer carcass weights were up 2 pounds from last week at 923 pounds, which is 28 pounds above year-ago levels.

The weekly export sales report has net beef sales of 28,100 mts, a marketing year high for 2024 with shipments at 14,100 mts.

STRATEGY & OUTLOOK

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

LEAN HOGS

ANALYSIS

Lean hogs closed the week $1.07 higher. Iowa/southern Minnesota weekly hog weights for week ending Aug. 10 has weights down to 281.0 pounds vs. 281.6 pounds last week but still above the 277.2 pounds last year.

The weekly export sales report has net pork sales of 20,900 mts, a marketing year low for 2024 with shipments of 28,800 mts.

STRATEGY & OUTLOOK

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