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Midwest Marketing Solutions

June 3, 2019
By Brian Hoops - Columnist , Farm News

Japan lifts restrictions on U.S. beef exports

The U.S. Department of Agriculture says United States and Japan have agreed on new terms and conditions eliminating Japan's restrictions on U.S. beef exports. The terms take effect immediately and allow U.S. products from all cattle, regardless of age, to enter Japan for the first time since 2003. More on the new terms and conditions will be released Monday. The expanded access could increase U.S. beef and beef product exports to Japan by up to $200 million each year.

Deere and Company earnings down

Deere and Company earned $1.13 billion in the quarter ending April 28, down from $2.21 billion is the same period last year. Delayed planting and the U.S. China trade war are causing caution in the sector. The company reported a five percent jump in overall sales. Construction and forestry sales were up 11 percent to $2.99 billion. Agriculture and turf sales were up three percent to $7.28 billion.

Golden Point ordered to withdraw from NFA

NFA has ordered Golden Point Capital Management LLC (Golden Point), an NFA Member commodity pool operator and commodity trading advisor located in Chicago, Ill., and its sole principal and associated person Glenn Graham, to both withdraw from and not reapply for NFA membership, in any capacity, or act as a principal of an NFA Member. The Decision, issued by an NFA Hearing Panel, is based on a Complaint issued by NFA's Business Conduct Committee (BCC), and a settlement offer submitted by Golden Point and Graham. The Complaint alleged that Golden Point and Graham failed to cooperate promptly and fully with NFA during its 2018 examination of Golden Point.

Corn analysis

Corn closed the week $.32 1/2 higher. Last week, private exporters announced sale of 113,000 mts of corn to Mexico for 2018/19.

U.S. corn exports, for the week ended 5/20/19 of 32.3 million bushels were down from the previous week's 39.4 mb and were sharply below last year's same-week exports of 60.9 mb and were below the roughly 37.0 million bushels/week corn exports will need to average through the end of August if the USDA's 2.300 billion bushel export projection is to be met.

In the weekly crop progress report; U.S. corn planting advanced to only 49 percent complete versus 50 percent expected, 30 percent last week, 78 percent last year and 80 percent average.

The eastern belt made minimal progress again with Illinois, the No. 2 corn producing state, only 24 percent planted. U.S. ethanol production, for the week ended 5/17/19, unexpectedly saw a notable increase to 1.071 million barrels/day (315 million gallons/week) from 1.051 mbpd (309 mil gal/week) the week prior and reflected the 7th increase in ethanol production of the last 8 weeks as production gears up heading into the summer driving season.

This week's production was a solid 4.2 percent above last year's same-week production of 1.028 mbpd (302 mil gal/week). Poor growing conditions have funds covering short positions. With lots of variables this year, marketing will be very difficult for producers. Expect lower yields and less seeded acres this summer, lowering corn ending stocks.

Strategy and outlook

With funds covering shorts due to adverse weather conditions, producers should use the rally to exit old crop inventories and focus on marketing new crop supplies.

Soybeans analysis

Soybeans closed the week $.12 3/4 higher. Last week, private exporters announced sale of 131,000 metric tons of soybeans for delivery to an unknown destination for 2018/19.

U.S. soybean exports last week of 18.3 million bushels were towards the lower end of market expectations and were well below last year's same-week exports of 33.3 mil bu and were solidly below the roughly 31.2 million bushels/week soybean exports will need to average through the end of August if the USDA's 1.775 billion bushel export projection is to be met.

U.S. soybean planting is 19 percent complete versus 22 percent expected, 9 percent last week, 53 percent last year and 47 percent average. The slow planting pace will no doubt shift some corn acres to soybeans, the last thing the soybean market needs. There will be a massive stockpile of soybeans by harvest time.

Strategy and outlook

With funds covering shorts due to adverse weather conditions, producers should use the rally to exit old crop inventories and focus on marketing new crop supplies.

This material has been prepared by a sales or trading employee or agent of Midwest Market Solutions and is, or is in the nature of, a solicitation. This material is not a research report prepared by Midwest Market Solution's Research Department. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Midwest Market Solutions believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such.

Brian Hoops can be reached at (605) 660-1155.

 
 

 

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