Market Watch

Irrigated corn yield potential is predicted to be 2-8% below long-term average, while dryland yield potential in much of the Corn Belt will be moderately to severely reduced, falling 22-67% below normal. To forecast potential production at 12 sites across the Corn Belt University of Nebraska–Lincoln crop experts used a "Hybrid-Maize model" to estimate end-of-season yield potential based on actual weather up to August 27, and historical long-term weather data to complete the season using data from each of the past 30 years. Simulations were run for dryland corn in Iowa, Illinois, and South Dakota, and for both irrigated and dryland corn in Nebraska. Simulations were based on the typical planting date, hybrid relative maturity, plant population, and soil properties at each location. The bottom line is that 2012 irrigated yields will be moderately lower than the long-term averages (2-8% below normal), while dryland corn yield potential in much of the Corn Belt will be mod...

The USDA will release estimates of June 1 corn and soybean inventories on June 29. The level of those stocks will reveal the rate of consumption during the third quarter of the 2011-12 marketing year and the available supply for consumption during the fourth quarter. According to University of Illinois agricultural economist Darrel Good, there is likely to be a wide range of expectations for the estimate. "Based partially on the on-going record strong corn basis, we anticipate that feed and residual use of corn during the third quarter was larger than the estimate for last year's use. If so, June 1 stocks would be near 3.1 billion bushels and use for the year would be expected to exceed the current USDA projection of 4.55 billion bushels. "The June 1 stocks estimates take on a little more importance this year due to the relatively tight year-ending inventories projected for both corn and soybeans, even though more early-harvested corn is expected this year. The su...

New Meat report links added to Terminal Market Reports page . Avg. Daily U.S. & Canadian Cattle Slaughter Monthly US Beef Exports Monthly U.S. Broiler Exports Monthly US Pork Exports National Base Hog Price

With the breeding herd only 0.6 percent larger than a year ago, sow numbers stable, and the market herd reportedly 2 percent larger, the nation's pork producers are largely holding back on expansion even though the industry returned to profitability in the spring of 2011. According to Purdue University Extension economist Chris Hurt, large financial losses in 2008 and 2009 and uncertainty associated with higher feed prices due to crop damage in South America may be some of the reasons for the reduced profit outlook for 2012. "The current outlook is for profits of just $4 per head for 2012," Hurt said. "This compares with estimated profits of $14 per head last year. An early look toward 2013 suggests modest continued expansion of pork production with somewhat lower hog prices. Feed costs are expected to moderate to the down side with estimated total costs dropping to around $60 per live hundredweight compared with $63 in 2012. "One...

With 2011-12 marketing year-ending stocks of U.S. corn expected to be near pipeline levels, the size of the 2012 crop has substantial price implications. Acreage intentions will be revealed in the USDA's March 30 Prospective Plantings report, but much of the current discussion centers on prospects for the U.S. average corn yield. Widely differing views of yield prospects for 2012 have emerged. A number of factors may contribute to the diverse views, but four have received a lot of attention. These include (1) the timing of planting, (2) the magnitude and potential change in the trend yield, (3) the expected summer weather conditions, and (4) the location and magnitude of acreage changes. The mild winter weather and early spring fieldwork suggests that the 2012 crop will be planted in a very timely fashion. There is a general perception that early planting results in a higher U.S. average yield potential, all other things being equal. Agronomic resear...

The pork industry is expected to have a profitable year in 2012. In fact, the level of profitability could be the most favorable during the high-priced feed era, according to Chris Hurt, a Purdue University agricultural economist. "Profits in 2012 are currently forecast to be near $17 per head, which would be the highest since 2006. That was the last year of the low feed-price era when corn prices received by farmers averaged about $2.30 per bushel for the calendar year and estimated hog profits were $27 per head," he said. Although a return to profitability is welcome news, there are deeper and more important implications. "The first is that the pork industry, like most other animal industries, has made the adjustments necessary to live in a world of high-priced feed. The second is that the pork industry probably has turned the corner on high feed prices as we look to 2012 with abundant and cheap feed wheat, prospects for moderation in the rate of growth in corn use for...

Commodity market analysts expect lower U.S.corn and soybean production estimates in next week's crop production report from the Department of Agriculture. Ohio State University agricultural economist Matt Roberts says that could lead to marketing opportunities for farmers. "The market is really most interested in new information on yields. Since the August report came out, six or seven major marketing services gave their own yield forecasts, and they've been all over the place." Roberts said those private estimates ranged from as low as 143 bushels per acre for corn yield to as high as 152 bushels per acre. A yield estimate from USDA near or outside one of those extremes would likely lead to aggressive action in the corn market. Specifically, Roberts said, the market consensus is a corn price based on a yield below 151 bushels per acre nationally, and anything above that mark will spark a significant selloff. "A lot of the private analytical scuttlebutt centers o...