Iowa Farm Outlook & News

Headlines
  • June 2017 Retail Meat Prices:
       Choice beef $6.21 per pound, up 1 cent from last year
       All fresh beef $5.82 per pound, down 2 cents from last year
       Pork $3.76 per pound, down 1 cent from last year
       Broiler $1.50 per pound, up 9 cents from last year
       Turkey $1.58 per pound, up 6 cents from last year
  • Aug. 2017 Prices for 2017/18 Crops:
       Corn $3.30 per bushel, steady with last month
       Soybean $9.30 per bushel, down 10 cents from last month
  • Aug. 2017 Yield for 2017/18 U.S. Crops:
       Corn 169.5 bushels per acre, down 1.2 bushels from last month
       Soybean 49.4 bushels per acre, up 1.4 bushels from last month
  • Aug. 2017 Yield for 2017/18 Iowa Crops:
       Corn 188.0 bushels per acre, down 15 bushels from last year
       Soybean 56.0 bushels per acre, down 4.5 bushels from last year
Livestock
New Cattle Report (8/1/17)

On July 25th USDA's Agricultural Marketing Service launched the new National Weekly Fed Cattle Comprehensive Report available at https://www.ams.usda.gov/mnreports/lswfedcc.pdf. The report highlights price differences between specific purchase types of transactions including beef type and dairy-bred cattle, dressed and live sales, and alternative marketing methods. The composition of cattle sales (negotiated net, formula net, forward net, grid net) over the last 52-week period are also provided in the new report. For the last full week in July, negotiated transactions represented 26.26% of the national market, 61.30% formula net, 8.07% forward net, and 4.37% grid net. USDA also revised, Section D: Basis Distribution, in the National Weekly Direct Slaughter Cattle - Prior Week Slaughter and Contract Purchases Report available at https://www.ams.usda.gov/mnreports/lm_ct153.txt. Specifically, per USDA, "The negotiated cattle delivering beyond 30 days will no longer be represented as forward contracts with a "0.00" basis level, but instead will be identified with a blank basis level. This reporting change is in response to industry concerns of differentiating these types of purchases from other transactions." While negotiated cattle delivering beyond 30 days is a relatively small share of the overall trade, this change provides a more accurate number of cattle forward contracted at a 0.00 basis level for a particular delivery month and basis month. Knowing the basis distribution can help feedlots as they evaluate new offers from packers.

Crops
Despite Weather Issues, Yield Estimates Better Than Expected (8/10/17)

The first official tour of the nation's fields this summer resulted in better crop yield and production estimates than the market was expecting. The national corn yield estimate came in at 169.5 bushels per acre, down 1.2 bushels from trend, but that was still a couple of bushels above trade expectations. If realized that points to a 14.15 billion bushel corn crop, which would be the 3rd largest ever, continuing a string of large corn crops. The soybean yield estimate was 49.4 bushels per acre. That is 1.4 bushels above trend and sets up this year's crop to exceed last year's. So bushels and bins would continue to overflow with these estimates.

On the demand side, news was mixed. Soybean export projections were raised 75 million bushels, but domestic soybean crush was lowered by 10 million. Corn feed usage and exports were reduced by 25 million bushels each. Combined, the corn adjustments shrank 2017/18 ending stock projections by 52 million, but stocks are still projected above 2.25 billion bushels. For soybeans, ending stock projections rose by 15 million bushels, to 475 million. For prices, USDA held their price range for corn, leaving the midpoint at $3.30 per bushel. While for soybeans, the price range tightened a bit, losing a bit more than the high end than the low, with the midpoint now at $9.30 per bushel.

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