Feed Prices Show Bullish Bias

Feed prices for livestock producers are rising, and charts indicate they have a definite bullish bias.

Weekly corn, sorghum, winter wheat and soybean meal prices bottomed the first week of October in spite of a record fall harvest.  Fall crop prices appear to have put that all behind them while winter wheat is less certain about direction.

Since bottoming at $2.71 ½ a bushel the first week of October, Omaha weekly corn prices have risen $0.83 ½, or 30.8% to $3.55 a bushel last week.

Southern Plains corn prices have made similar advances.  Prices since the early October low of $3.60 a bushel have risen $0.74, or 20.6%, to last week’s $4.34 a bushel.  This leaves them only $0.42, or 8.82%, behind the $4.76 price of a year earlier.

Central Illinois 48%-protein soymeal prices are up $112.80 a short ton at $455 from $342.20 the first week of October, a 33.0% gain.  Prices now are comparable to last year’s price of $458.10.

The only feedstuff not to rise in price was Chicago weekly distillers grain.  This byproduct of corn ethanol production last week was $105 a short ton, down $5, or 4.55%, from $110 the first week of October.

Sources said prices began to rise as traders feared that planted and harvested acreage was less than they and the USDA’s National Agricultural Statistics Service had expected, and, thus, total production would be less than anticipated.




Estimated corn production actually rose in the October report from the September estimate in the October World Agricultural Supply and Demand Estimates report but by less than 1% to 14.5 billion bushels.  What worried traders was a 1% decline in harvested acres as Farm Service Agency data about planted acreage was incorporated into the formulas.  They were concerned that more cuts would be made since many of the state offices had not reported their statistics.

The October report estimated US harvested corn acres at 83.1 million, down 1% from the September forecast and down 5% from 2013.  If yield estimates had not risen in the month, estimated US corn production would have declined from September.

The November report estimated corn production of 14.4 billion bushels, a slight decline from October.  This still is a record crop, but traders who had been fed a steady diet of higher acreage estimates worried a bit more.

About that same time, reports of planting delays in the South American crops began to filter in.  Some areas were too dry while other places were too wet, and there were concerns about a late arrival of Brazil’s monsoon season.

There still are some South American planting issues, and some think Brazil’s second crop, which largely is exported, could be trimmed.

The latest US plunge into winter with icy temperatures and snow also worried traders, even though most of the crops in the largest-producing states already are harvested.




No cash cattle trading was has been reported yet this week in the Plains.  Scattered bids of $165 per cwt on a live basis were reported, but asking prices were holding around $170, and futures prices made double-digit gains Thursday.

Packers are losing money, an unpleasant fact of life for this time of year that still makes them tough negotiators.  Sources think cattle owners will win the battle this week and pull prices up from last week’s mostly $167 price.

Boxed-beef prices Thursday were narrowly mixed, with the USDA’s choice cutout off $0.09 at $251.35, and the select cutout up $0.18 at $238.93.  The choice/select spread narrowed to $12.43 from $12.69 Wednesday.

Spot volume was good with 150 loads of fabricated product sold.

The CME Feeder Cattle Index for the seven days ended Wednesday was $240.38, down $0.48 from Tuesday, but still above the nearby Nov contract’s Thursday settlement of $239.35.