Record South American Soybean Harvest Could Be Price Driving Force |


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Corn closed the week at 14 and a quarter cents higher. Private exporters have not announced any export sales.

U.S. exports for the week ending Dec. 16 were 39.4 million bushels, little change from 36.1 million bushels the previous week and slightly above the same week’s exports of the last year by 30.3 million bushels. Exports for the week hit a 9-week high. Over the past four weeks, U.S. exports have averaged 34.4 million bushels per week, which is comparable to the average of 35.1 million bushels per week for the same period last year, but still significantly below the roughly 53 million bushels per week that corn will need on average until the end of August to meet the USDA’s export projection of 2.5 billion bushels. Cumulative export inspections of 445 million bushels are down 12% from 506 million last year, while the USDA currently estimates that 2021-2022 exports will be down 9% from last year. year round.

In the Energy Information Administration’s weekly report, weekly ethanol production for the week ending December 17 averaged 1,051,000 bushels per day compared to 1,087,000 the previous week and 976,000 bushels per day there. is one year old. Ethanol inventories fell to 20.7 million bushels from 20.9 million bushels last week and from 23.2 million bushels last year.

Strategy and Outlook: The corn market will need to bid on acres this spring to rebuild ending stocks to a more comfortable level. Tight base levels and a market on the verge of reversal are bullish fundamentals for the market.

Soy

Soybeans closed the week at 53.5 cents higher. Private exporters have not announced any export sales.

In the Weekly Export Inspections Report, soybean exports from the United States last week were 61.7 million bushels, but significantly lower than the same week’s exports last year of 105.0 million. of bushels. That translated into cumulative export inspections of 998 million bushels, falling from a low four-week deficit to last year’s 1.293 billion bushels of nearly 23%. Additionally, exports last week were at an 11-week low as soybean shipments continue to seasonally slow before the South American export program accelerates in February. Soybean exports will need to average 27.2 million bushels per week through the end of August in order to meet USDA export projections of 2.05 billion bushels compared to 23.7 million bushels l last year on average.

Strategy and Outlook: The market expects a record soybean crop in South America and this year’s production updates in South America will be a major driving force for prices throughout the winter. Weather conditions during the growing season in South America will be closely monitored.

Wheat

Chicago wheat closed 40 and a half cents higher, Kansas City wheat closed 51 and a half cents higher and Minneapolis wheat 12 and a half cents higher. Exporters have not announced any export sales.

In the Weekly Export Inspections Report, U.S. wheat exports fell to a four-week low at just 7.8 million bushels and were significantly lower than exports in the same week of last year of 14, 4 million bushels. Over the past 10 weeks, U.S. wheat exports have averaged 8.9 million bushels per week compared to 13.5 million per week in the same period last year, while cumulative inspections at the exports of 427 million bushels fell to a largest 20-week deficit to reach 519 million bushels last year. almost 18%. Cumulative exports remain the lowest on record in the 29 weeks of the marketing year going back almost 50 years. To meet USDA’s already low export forecast of 840 million bushels, wheat exports will need to average about 15.2 million bushels per week through the end of May, up from 17.6 million. bushels per week last year from now.

Strategy and outlook: December is the time when the new crop winter wheat goes dormant and the wheat will not come out of dormancy until March. Until then, the market will mainly focus on demand. This month, the wheat harvest begins in Australia and will compete with US wheat for demand. In addition, traders will closely monitor the moisture conditions of the winter wheat crop during the winter months. This year’s winter wheat crop is going dormant with one of the lowest good to excellent odds in 20 years.

Live and feeder cattle

Live cattle closed up $ 3.07 last week while feeder cattle closed up $ 2.10. The Cattle on Feed Monthly Report is slightly user-friendly compared to the pre-report estimates. The report showed slightly less cattle fed than expected at 99.6% last year versus estimates of 100%, placements were slightly above estimates at 103.6% versus 103.4% expected while marketings were friendly at 105.3% against estimates of 104.4%.

The spot trade in fed cattle was weak in the north, mostly $ 135 to $ 137 live and $ 216 to $ 218 dressed. It’s mostly $ 1 to $ 2 less than last week. The light trade in live animals also grew in the south at $ 135, or $ 1 to $ 3 less.

The Fed Cattle Exchange had 1,708 head offered for sale and 278 head sold at an average of $ 140. The latest USDA steer carcass weights have increased by one pound to 929 pounds, seven pounds more than a year ago and a new high for this year. Beef export sales recorded net sales of 12,000 metric tonnes for 2021 with reported exports of 17,900 metric tonnes.

Strategy and outlook: Producers should have window or close strategies to protect the downside, but allow upside potential as tight supplies in Q4 and Q1 2022 are expected to be bullish for stocks, but the economy is in trouble.

Lean pigs

Lean hogs closed the week up $ 2.60.

In the monthly cold storage report, the total supply of red meat to freezers was down 2% from the previous month and 4% from last year. The total number of pounds of beef in freezers was up four percent from the previous month, but down four percent from a year ago. Frozen pork supplies were down eight percent from the previous month and three percent from a year ago. Inventories of pork belly increased 117% from last month and 8% from last year.

The Hogs & Pigs quarterly report looks bullish relative to trade estimates. The report showed that all pigs and pigs were at 96% a year ago, lower than survey estimates of 97.2% and slightly down from September. Kept for breeding is well within the estimate of 100.1% while Kept for marketing was only 95.6%, well below the estimate of 96.9%.

The weekly weight of pigs in Iowa and southern Minnesota for the week ending Dec. 18 was down to 289.3 pounds from 290.8 pounds last week and 288.7 pounds last year. This week’s net pork sales of 28,800 metric tonnes reported for 2021 with exports of 32,000 metric tonnes.

Strategy and outlook: The pork market continues to suffer under the weight of weak fundamentals.

About Marco C. Nichols

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