June 30, 2009

 

Dillon M Feuz, Ph.D., Professor

Department of Applied Economics, Utah State University

 

Corn Acreage and Stocks

The USDA released the Acreage report and the Quarterly Stocks report this morning.  Corn acres came in at just over 87 million acres, which was up 2 million acres from the March 31 expectations.  The trade had actually expected the USDA to cut acres by almost a million acres from the March report.  Three million more acres than expected is certainly bearish for the corn market.  Trading at midday after the report was released had many of the Corn contracts down the limit of $.30 per bushel.  Quarterly stocks of corn were also higher than expected, coming in at 4.266 billion bushels.  The trade had expected just under 4.2 billion bushel.  This year’s planted acres are a million acres more than last year and with over 70% of the crop rated good to excellent, it will likely be the second largest corn crop ever. 

While the report will not be good for corn prices, it should strengthen the cattle markets.  Feedlots may actually be able to buy corn this year at a price that will allow for some profitability in cattle feeding.  Early video sales for fall delivered calves and yearlings have been lackluster so far this year.  This report may also add a little enthusiasm to the feeder market.  Although feedlots will probably remain cautious as they have been burned the last three years with early summer forward contracts being much higher than fall calf prices.

 

The Markets

The fed cattle market was steady to a little lower this past week. Trade took place mid week in the North and mainly on Friday in the south.  Volume was down a little in the north but good trade occurred in the southern plains this week.  Prices were $81-82 on a live weight basis and were $129-130 on a dressed basis.  Choice boxed beef prices were down a few cents per cwt. this week.  The Choice-Select spread increased a little but remains narrower than is typical.  Feeder cattle prices were generally higher this past week compared to the previous week. Nebraska prices for 7-weight steers were about $5 higher and 5-weights were $1 higher.  Prices for 7-weight steers in Oklahoma were up $1 and 5-weight steers were down about $.50 compared to last week.  Montana prices were not reported for the week.  Corn prices were about $.20 per bushel lower.  Dried Distillers Grain prices were a $2.50 per ton lower and wet distillers were $3.50 lower per ton in Nebraska for the week.

 

 

		Week of	Week of	Week of
		6/26/09	06/19/09	06/27/08
5-Area Fed Steer	all grades, live weight, $/cwt	$81.54	$81.73	$98.28
	all grades, dressed weight, $/cwt	$129.43	$129.88	$154.72
Boxed Beef	Choice Price, 600-900 lb., $/cwt	$139.71	$140.00	$164.25
	Choice-Select Spread, $/cwt	$7.25	$7.03	$6.18
700-800 lb. Feeder Steer Price	Montana 3-market average, $/cwt	--	--	--
	Nebraska 7-market average, $/cwt	$105.32	$100.50	$117.70
	Oklahoma 8-market average, $/cwt	$99.94	$98.68	$109.11
500-600 lb. Feeder Steer Price	Montana 3-market average, $/cwt	--	$109.00	--
	Nebraska 7-market average, $/cwt	$121.56	$120.19	$127.29
	Oklahoma 8-market average, $/cwt	$107.89	$108.28	$114.90
Feed Grains	Corn, Omaha, NE, $/bu (Thursday)	$3.60	$3.78	$7.16
	DDGS Price, Nebraska, $/ton	$130.25	$132.88	$193.50
	WDGS Price, Nebraska, $/ton	$46.34	$49.88	$70.38