Livestock and poultry producers may be able to work out more positive margins this summer with US corn stocks up from last year, even though planted acres are down.
The USDA’s acreage report Tuesday showed US corn stocks on June 1 at 5.295 billion bushels, up about 14% from last year. Acres planted to corn were down about 3% from last year at 95.3 million, the fourth highest planted acreage since 1944.
Of that, 2.959 billion bushels were being held on farms, up from 2.556 billion a year ago. Another 2.336 billion bushels were stored off farms, compared with 2.087 billion last year.
A FRIENDLY SURPRISE FOR GRAIN TRADERS
After the USDA released its reports on acreage and stocks, market analysts said the report was bullish for corn futures since the stocks were less than traders and analysts had expected, as were US wheat acres and stocks.
The USDA’s reported planted acreage, at 95.343 million acres, was only 350,000 more than expectations, and likely will not influence corn futures much, a market analyst said.
After the USDA reports were released, the Jul corn contract gapped higher but settled off the day’s high at $4.11 ½ a bushel, up $0.10 ¾ from Monday.
It is possible that most of the bullishness of the USDA reports was worked into prices by the close, the market analyst said. As the year progresses into the heart of summer, traders will be watching weather reports for adequate rain in the US Corn Belt for signs of stress in July when most of the pollination takes place.
They also will be watching foreign grain production, the analyst said. At this time, India was said to be having trouble with low monsoon rains, and the French crop could fall well short of normal because of hot and dry conditions.
If fertilizer availability remains tight, it’s possible that farmers around the world could reduce corn planted acres, a market analyst said. They also could increase planted acres to make up the difference in reduced yield expectations.
SOYBEANS FOLLOW CORN
Soybean futures also closed higher Tuesday, but market sources said it followed corn higher since the USDA reports offered no real surprises. Planted acres were pegged at 85.4 million, slightly more than the average of trade guesses but considered in line with expectations.
An 11% decline in on-farm soybean stocks was considered friendly to prices, but the report alleviated trader concerns of higher bean acres, and strong crush margins continue to encourage strong bean usage.
Soybean futures might have ended stronger Tuesday, but soybean oil was sharply lower, another market analyst said.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $258.59 per cwt to $259.87, compared with last week’s range of $256.28 to $264.00 per cwt. FOB dressed steers and heifers went for $406.76 per cwt to $408.74, compared with $401.64 to $410.90.
The USDA choice cutout Wednesday was up $1.72 per cwt at $393.16 while select was down $2.50 at $371.68. The choice/select spread widened to $21.48, from $17.26 with 86 loads of fabricated product and 16 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $460.23 per cwt, and 50% beef was $181.59.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.23 to $1.43 a bushel over the Jul corn contract, which settled at $4.12 ¾ a bushel, up $0.10 3/4.
No live cattle contracts were tendered for delivery Tuesday.
The CME Feeder Cattle Index for the seven days ended Monday was $377.40 per cwt, down $2.52. This compares with Tuesday’s Aug contract settlement of $364.60, down $2.87.