In The Cattle Markets- Corn To Increase

US - Global corn stocks are expected to increase, writes John Michael Riley, Mississippi University.
calendar icon 19 December 2011
clock icon 3 minute read

The USDA released its monthly projections for US and global agricultural supply and use this past Friday morning. US corn supply and demand was mostly unchanged in the December report.

Projected food, seed, and industrial corn demand was lowered by five million bushels as a result of lower corn sugar processing.

This being the only change, ending stocks projections were raised by the same amount. Ending stocks are now forecasts to be 848 million bushels, three million higher than the pre-report expectation. None-the-less, the stocks to use ratio is still a meager 6.7 per cent compared to last year’s 9.3 per cent.

On the global front, corn production was raised by 7.25 million metric tons for China and 8.53 overall. This contributed to a bump in world ending stocks to 127.19 million metric tons, up 5.62 from last year.

In the report, the most unexpected value with respect to domestic production was higher forecasted soybean ending stocks. From a supply standpoint, no changes were made but crushings and export use were forecast at 1.625 and 1.3 billion bushels, respectively, collectively 35 million bushels lower then last month’s estimate for the 2011/12 marketing year. These raised ending stocks, now at 230 million bushels, which was 10 million above expectations and 15 million above the previous year.

Marginal changes from last month’s projections were made for beef and other competing meats. Projected beef production for 2011 was lowered from 26.414 billion pounds in November to 26.287. Per capita domestic beef consumption was lowered 0.2 pounds from last month to 57.4.

Pork production was projected higher for 2011, now at 22.753 billion pounds, while 2011 broiler production was trimmed slightly to 36.894 billion pounds.

The Markets

Cash fed cattle lost steam last week and dropped anywhere from $3-10/cwt. The five-area price moved lower by $4.41/cwt to $120.57, live, while dressed cattle were down $7.71/cwt at $195.49. Feeders steers in Oklahoma markets were mostly steady, while steer calves were about $3/cwt lower. Feeders in Mississippi auctions were $2-$8/cwt higher and cull cows and bulls were $2-$5/cwt higher. Cash corn in Omaha was down slightly to $6.05/bu.

Live cattle futures were sharply lower this week. Lower wholesale beef and cash fat cattle resonated with the market and futures prices dropped. Feeder cattle were lower as well as the post Thanksgiving surge in the cash markets pulled back and brought futures with it. Corn was lower on the week but was mostly steady through Thursday but the dive by beans and mildly bearish report for corn caused price to fall Friday.

Wholesale beef prices were much lower this week following a dip that started the prior week. The Choice price took a big hit Thursday and ended the week at $188.57/cwt, down $5.34 week-over-week. Select continued to drift lower and ended at $172.18/cwt, down $3.23, which narrowed the spread slightly to $16.39.

TheCattleSite News Desk

© 2000 - 2024 - Global Ag Media. All Rights Reserved | No part of this site may be reproduced without permission.