US - There were no surprises in the USDA's latest World Agricultural Supply and Demand Estimates (WASDE) for livestock and poultry, write Steve Meyer and Len Steiner, whilst feed grain price forecasts have been lowered.
USDA’s National Agricultural Statistics Service (NASS) have released their monthly Crop Production report which updated feed grain and soybean production for 2015.
The crop production numbers of most interest to the livestock sectors (corn, other feed grains, and soybeans) tended to be near the upper bounds of industry expectations and were above pre-report estimates for soybeans.
Mild late season temperatures and good harvest conditions resulted in increased yields per acre compared to the report released one month ago.
Combining those numbers into balance sheets, incorporating forecasts on crop use, USDA’s World Agricultural Outlook Board (WAOB) monthly World Agricultural Supply and Demand Estimates lowered their 2015/16 crop-year feedstuff price forecasts.
The midpoint of WASDE 2015/16 price range for corn was reduced by 15 cents per bushel compared to the October projection and they are no longer forecasting a year-over-year price increase.
Besides increased production, compared to last month, other factors of note were: a lowering of US corn exports by 50 million bushels, a reduction in corn usage for ethanol by 75 million bushels; and a reduction in sorghum exports by 100 million bushels.
WASDE raised world coarse grain production, driven by the US increase and followed by increases since last month for Brazil and Argentina. US soybean production in 2015 is now projected by NASS to be record large at 3.981 million bushels.
WASDE reduced soybean and soybean meal prices compared to last month’s report. The midpoint of their soybean price was reduced by 25 cents per bushel compared to last month and for the 2015/16 crop marketing year is now below $9.00 per bushel versus $10.10 last year (2014/15).
The WASDE crop-year meal price is now has a range of $300 to $340 per ton (at Decatur with 48 per cent protein) down about $48.50 per ton from 2014/15.
It looks to us that meal could average near or even slightly below the bottom of that range.
Turning to the livestock and poultry forecasts in the WASDE report, there were no surprises.
Compared to their October forecasts, US beef production for both 2015 and 2016 was lowered slightly. WASDE has 2016's beef production with a large 4.8 per cent year-over-year increase.
Pork production for 2016 was unchanged, up 1.7 per cent from 2015's.
WASDE said September’s broiler production was larger than expected and hatchery data indicate some expansion in 2016, so both 2015 and 2016 broiler output forecasts were increased some compared to a month ago.
Also, broiler exports were reduced for 2015 and 2016 from the prior month estimates - the pace of recovery from Highly Pathogenic Avian Influenza restrictions and generally slow economic growth overseas has been slower than expected.
Near the end of the day on Tuesday, corn (December 2015 contract) was slightly down, declining about 6 cents per bushel from Monday’s close.
The January soybean contract slipped for the day by about 8 cents per bushel. Soybean meal for the day (December 2015 futures contract) eroded by about $2.80 per ton.
For the day, the December Lean hog contract was about unchanged (up $0.45 per cwt.).
After being limit down on Monday for most Cattle contracts, Live Cattle and Feeder futures went limit down for the expanded amount on Tuesday, but by day end there had been a modest rebound. Still, the day was down when we looked near market close the December Live Cattle were off about $2.60 per cwt. for the day, while the January Feeder contract was down near $3.80 per cwt.
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