Pricing in this year’s feed needs just got a little easier as corn and wheat futures settled sharply lower Thursday.
Corn and wheat futures prices fell sharply as participants in the annual Kansas Wheat Tour reported the crop’s yield potential at 46.1 bushels an acre, above the five-year average of 41.6 bushels but below the USDA’s estimate of a record-large 57.0 bushels for last year’s crop, according to a Reuters report.
Prior to the final yield estimate, the market was assuming heavy damage from a weekend blizzard that dumped large amounts of heavy snow on the crop and subjected it to freezing temperatures. Such damage still may be in store, but it’s too soon to tell and was too difficult to assess.
“This is an above-average crop, for sure,” said tour organizer David Green, executive vice president of the Wheat Quality Council, in the Reuters story. “The soil moisture profile is as good as it can possibly be. The unknown is the damage to the crop in the west.”
Snow still covered some fields as of midweek, and Kansas State University extension wheat specialist Romulo Lollato told Reuters it could be 10 to 12 days before the extent of the damage can be gauged.
Market sources said some of the wheat almost certainly will bounce back from the storm’s effects, but this may be harder for fields that have headed since the heads pile up more snow, and the weight can break the stems. Monday, the USDA’s National Agricultural Statistics Service said 44% of Kansas’ wheat had headed, with 76% in Oklahoma and 78% in Texas.
DRIER FORECASTS APPLY PRESSURE
Losses in winter wheat futures almost certainly played a role in Thursday’s decline in corn futures, market sources said. After all, the losses nearly wiped out all of this week’s gains.
But losses in corn and soybeans also were linked to forecasts for drier weather in the western Midwest over the coming week. Such conditions will aid fieldwork and planting efforts, and the sunshine will help waterlogged areas to dry and planted crops to grow.
The USDA’s NASS Monday estimated that 34% of the corn crop was planted, which matched the five-year average. However, Iowa was at 28% planted, which was behind the state’s 35% average, though Illinois and Indiana were ahead of state averages.
CATTLE LOSSES UNKNOWN
Amid the reports of snow and cold damage to the wheat crop, there are reports of damage to the cattle as well. Thousands were affected by the cold, wet conditions, and perhaps thousands died.
Reports that cattle were ill-equipped to handle the storm, and could not escape its effects, are just coming out. Cattle were preparing for summer’s heat and were losing their winter coats of hair as the storm hit, and cattle cannot handle cold, wet conditions well.
CASH CATTLE QUIET
After trading on the livestock exchange Wednesday at an average of $140.15 per cwt on a live basis, up $9.01 from $131.14 a week earlier, fed cattle began to trade in the Plains.
Cash cattle traded early at $140 to $142 per cwt live, but the volume came at $145 to $147, up $9 to $10. Dressed-basis trade also was noted at $230 to $231, up $12 to $15.
The USDA’s choice cutout Thursday was up $2.99 per cwt at $235.58, while select was up $1.95 at $216.84. The choice/select spread widened to $18.74 from $17.70 with 92 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Wednesday was $145.39 per cwt, up $2.41. This compares with Thursday’s May settlement at $148.27, down $5.02.