Market Insider Weekly Newsletter
NEWS
*President Joe Biden signed a three-month spending bill, preventing a government shutdown. The House and Senate passed the continuing resolution a day earlier. House Speaker Mike Johnson initially sought a six-month extension, but did not have enough support within his caucus for that bill.
CORN
ANALYSIS
Corn closed the week $.07 3/4 higher. Last week, private exporters announced sales of 15.5 million bushels (mb) to an unknown destination for 2024-25.
In the weekly export inspections report, U.S. corn export inspections, for the week ended Sept. 26, were 44.9 million bushels and were little changed from the previous week’s 45.3 mb while being notably higher than last year’s same-week exports of 26.4 mb. Through the first four weeks of the 2024-25 marketing year, cumulative export inspections of 131 million bushels compare to last year’s 106 million, leaving exports needing to average roughly 40.1 million bushels/week through the end of next August to reach the USDA’s current 2024-25 U.S. corn export projection of 2.300 billion bushels vs. last year’s 40.4 million/week average from this point forward.
In the weekly EIA report, U.S. ethanol production, for the week ended Sept. 24, rebounded modestly to 1.015 million barrels/day from the previous week’s solid decline to 994k bpd, while ticking back above last year’s same-week production of 1.009 mbpd by 0.6% after the previous week’s production fell to a 1.5% deficit to last year, the first year-over-year shortfall in weekly production in 13 weeks at the time. U.S. ethanol stocks last week ticked down to 23.459 million barrels from 23.524 million barrels the previous week and reflecting stocks 7.2% (66 million gallons) above year-ago same-week stocks of 919 million gallons, while remaining record high on a same-week basis.
In the weekly crop progress report, corn was seen at 21% harvested versus the five-year average of 18% harvested. Corn conditions fell 1% to 64% vs. 65% g/e last week and 53% last year.
The Quarterly Stocks report was considered bullish for corn. The USDA revised the 2023 U.S. corn crop production down slightly from their previous estimate of 15.342 billion bushels to 15.341 billion bushels. Corn stocks as of Sept. 1 were 1.761 billion bushels (bb) vs. estimates of 1.846 bb and last year at 1.360 bb.
STRATEGY & OUTLOOK
Producers have established a floor during the early May rally 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. Look to add 2025 hedges on latest rally.
SOYBEANS
ANALYSIS
Soybeans closed the week $.28 1/4 lower. Last week, private exporters announced sales of 4.4 mb of soybeans to an unknown destination and sales of 8.5 mb of soybeans to China.
U.S. soybean export inspections last week of 24.8 mb, seasonally rising to the highest of the first four weeks of the 2024-25 marketing year from the previous week’s 18.3 mb while being nearly identical to last year’s same-week exports of 24.9 mb, bringing cumulative export inspections to 71 million bushels vs. 73 million at this time last year. In order to reach the USDA’s 1.850 billion bushel export projection, soybean inspections will need to average roughly 35.6 million bushels/week through the end of next August vs. last year’s 32.6 million/week average from this point forward.
In the weekly crop progress and conditions report, U.S. national soybeans are now 26% harvested versus the five-year average of 18%. Soybean conditions were unchanged at 64% good/excellent vs. 64% expected, 64% last week and 52% last year.
In the Quarterly Stocks report, the USDA revised the 2023 U.S. soybean production down to 4.162 billion bushels versus the USDA’s previous number at 4.165 billion bushels. Estimates were expecting 2023 production to drop to 4.164 billion bushels. As of Sept. 1, U.S. soybean stocks were pegged at 342 mb vs. estimates of 347 mb and 264 mb last year.
In the Census Crush report, the USDA reported U.S. soybean crush in August was 167.6 million bushels, exactly in line with wire service-reported average expectations of 167.6 million bushels and falling sharply from July crush of 193.3 million bushels (slightly revised lower from 193.5 million originally).
Additionally, August crush was 2.1% below last year’s 169.0 million, only the second month of 2023-24 in which crush was below year-ago levels. USDA reported end of August U.S. soybean oil stocks were 1.629 billion pounds, right in line with average market expectations of 1.627 billion, while falling notably from 2.009 billion pounds in July, given the sharply lower crush, and below year-ago August stocks of 1.772 billion pounds. With the decline in crush in August, soybean oil stocks fell to a nine-month low and also back to the lowest for the month of August in 10 years. USDA reported 472.7 million bushels of corn was used for ethanol production in August vs. 483.9 million bushels in July and 441.7 million bushels last year August.
STRATEGY & OUTLOOK
Producers have established a floor during the early May rally 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. Look to add 2025 hedges on the latest rally.
WHEAT
ANALYSIS
For the week, Chicago wheat closed $.10 1/4 higher and Kansas City wheat closed $.21 3/4 higher. Last week, private exporters did not report any U.S. wheat purchases.
U.S. wheat export inspections of 19.7 mb slipped from the previous week’s 26.6 mb to be the lowest in six weeks but were above year-ago same-week exports of 15.8 mb. Now nearly four months into the 2024-25 marketing year, cumulative export inspections of 303 million bushels are up 35% from last year’s slow-starting 224 million bushels, leaving shipments needing to average roughly 14.2 million bushels/week through the end of next May to reach the USDA’s 825 million bushel export projection vs. last year’s 13.2 million/week average from this point forward.
In the weekly crop progress and conditions report, winter wheat seedings are now seen at 39% planted, up from 25% done last week and versus the five-year average of 38%. Emergence is seen at 14% versus an average of 13% and up 4% on the week.
In the Quarterly Stocks and Small Grains report, wheat stocks were pegged at 1.986 bb vs. estimates of 1.992 bb and 1.812 bb a year ago. All wheat production was pegged at 1.971 bb vs. 1.983 bb estimated and 1.982 bb in August; winter wheat production was forecast at 1.349 bb vs. 1.360 bb estimated and 1.361 bb in August while spring wheat production was forecast at 542 mb vs. estimates of 545 mb and 544 mb in August.
STRATEGY & OUTLOOK
Producers have established a floor during the early May rally 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 $2.45 higher while feeder cattle closed $3.47 higher.
Last week, moderate fed cattle cash trade in the North at $187 live and $296 dressed, which is steady to $1 higher live and $2 firmer dressed compared to last week. Light trade volumes in the South at $186 live, which is mostly $1 higher than last week.
The latest USDA steer carcass weights were up 3 pounds from last week at 948 pounds, which is 30 pounds above year ago levels.
The weekly export sales report has net beef sales of 22,500 mts for 2024 with shipments at 17,700 mts, a marketing year high.
Last week, boxed beef sales for export rebounded from the prior week, which was the lowest weekly total of the year. At 891 loads last week, sales were 192% above the prior week but only 123% above the same week last year. The year-to-date total still remains below last year. At 33,356 loads, the year-to-date export sales were 983 loads below last year for a decline of 3%.
STRATEGY & OUTLOOK
As prices approach weekly resistance, re-established window or fence strategies to protect the downside but allow for upside potential.
LEAN HOGS
ANALYSIS
Lean hogs closed the week $2.90 higher.
Iowa/southern Minnesota weekly hog weights for the week ending Sep. 28 has weights up to 284.2 pounds vs. 283.4 pounds last week and 281.9 pounds last year.
The weekly export sales report has net pork sales of 43,400 mts for 2024 with shipments of 25,900 mts.
STRATEGY & OUTLOOK
As prices approach weekly resistance, re-established window or fence strategies should protect the downside but allow for upside potential.