Market Watch

An already tight grain and oilseed market got even tighter today as the U.S. Department of Agriculture's National Agricultural Statistics Service (NASS) released its August crop production and supply and demand estimates. USDA revised its estimate of corn yield to 153 bushels per acre, down from a forecast of 158.7 bushels released in the July report. It said the figure would still mark the fourth highest yield on record, with a total forecasted production of 12.9 billion bushels, up 4 percent from 2010's final production. "It was a very aggressive revision in corn yield," said Ohio State University Extension economist Matt Roberts. Hot, dry weather played a significant role in developing a crop now presumed to be much smaller than market analysts had anticipated. The average of pre-report private estimates for corn yield was 155 bushels per acre. As corn production tightens, prices are expected to rise and, accordingly, consumption potentially curtailed. ...

Prices of corn, soybeans and wheat continue to move erratically, reflecting both new information and the lack of some information, according to University of Illinois agricultural economist Darrel Good: "The markets are supplied with a steady flow of data on consumption in some markets, particularly the export markets and the ethanol market. Less frequent information is available about consumption in other markets, particularly the domestic feed market." For corn, the available data point to a continuation of a high rate of domestic consumption and a slow pace of export shipments. For soybeans, weekly export inspections have dropped below the level needed to reach the USDA projection of 1.55 billion bushels for the year ending on August 31. Inspections for the four weeks ended May 26 averaged 8 million bushels per week, compared to the 11.5 million average needed to reach the USDA projection. "The domestic soybean crush pace continues to be slow with the reported April c...

USDA released an update of its World Ag. Supply and Demand Estimates report March 10, but the update changed little in the corn and soybean outlook. Corn estimates were unchanged, with 2010/11 ending stocks projected at 675 million bushels and the midpoint of the season-average price range at $5.40 per bushel. Soybeans had a small adjustment to seed demand that was offset by a reduction in residual demand. So 2010/11 ending stocks remain at 140 million bushels, but the midpoint of the season-average price was lowered to $11.60 per bushel. Wheat 2010/11 ending stocks rose 25 million bushels, based on a reduced export outlook. This could open up more wheat in domestic feed channels to compete with corn. Looking at the world situation, corn production in 2010/11 was reduced by 0.5 million metric tons with the bigger shifts coming from Mexico (down 2 million tons) and Brazil (up 2 million tons). Corn exports to the European Union and Mexico for the 2010/11 crop year are projected to inc...

With corn production down and corn consumption up, the market is poised to see record-high prices per bushel in the 2010-11 marketing year, according to a marketing and outlook brief prepared by University of Illinois agricultural economists Darrel Good and Scott Irwin. "We looked at the current situation in which we're expecting very tight year-ending stocks and developed three supply, consumption, and price scenarios for the 2011-12 marketing year," Good said. "The yield alternatives include a trend yield, an average yield resulting from good weather, and an average yield resulting from poor weather. We followed those scenarios through a balance sheet and into a price projection under each of those three scenarios, just to underscore how important crop size is to next year's average price." In one scenario, Good and Irwin calculated a trend yield based on actual U.S. yields since 1960 at 158 bushels for 2011. This was applied to an expected 92 million acr...

After a couple weeks of higher holiday trade, fed cattle prices settled back last week. The 5-Area slaughter steer price averaged $105.46/cwt on a live weight basis, $0.82/cwt lower than the previous week. Dressed prices were down about $1/cwt as well. Choice boxed beef gained nearly $4/cwt last week to average $165.81/cwt. Feeder cattle volume picked up significantly in the first full week of the year. While price comparisons to the previous week weren’t available in several markets, generally higher prices were noted. The price for yearlings in Nebraska averaged almost $3/cwt higher, while 500-600 lb calves were more than $10/cwt higher. Through Thursday of last week, corn prices were $0.14/bu lower, basis Omaha, NE. Prices for DDGS and WDGS were up another $2-4/ton last week in Nebraska. Source: Darrell R. Mark, Department of Agricultural Economics, University of Nebraska–Lincoln Farm Supply Beef Animal Husbandry Books Farm Magazines Beef Cattle: Keeping a Small-Scale Herd fo...

Over the next three months, the prices of corn and soybeans have two major objectives. First, prices must allocate remaining old crop supplies to maintain at least pipeline stocks by the end of the current marketing year. Second, prices must direct spring planting decisions, according to Darrel Good , a University of Illinois agricultural economist. For soybeans, the USDA now projects that the combined total of domestic crush and exports during the current marketing year will reach 3.245 billion bushels. That is only 8 million bushels, or 0.25 percent, less than the total of last year. At the projected level of use, year-ending stocks would total only 140 million bushels, or 4.2 percent of total use that includes seed, feed, and residual uses. Year-ending stocks cannot be reduced much below 140 million bushels and still maintain pipeline supplies so total use cannot exceed current projections by a substantial amount. During the first quarter of the current marketing year, soybean crush...

After a couple weeks of higher holiday trade, fed cattle prices settled back last week. The 5-Area slaughter steer price averaged $105.46/cwt on a live weight basis, $0.82/cwt lower than the previous week. Dressed prices were down about $1/cwt as well. Choice boxed beef gained nearly $4/cwt last week to average $165.81/cwt. Feeder cattle volume picked up significantly in the first full week of the year. While price comparisons to the previous week weren’t available in several markets, generally higher prices were noted. The price for yearlings in Nebraska averaged almost $3/cwt higher, while 500-600 lb calves were more than $10/cwt higher. Through Thursday of last week, corn prices were $0.14/bu lower, basis Omaha, NE. Source: Darrell R. Mark, Ph.D., Department of Agricultural Economics, University of Nebraska–Lincoln Farm Supply Beef Animal Husbandry Books Farm Magazines Artwork: Winter Save by David Stoecklein