Iowa Farm Outlook & News

  • July 2015 Cattle: All Cattle and Calves
       U.S.: 98.4 million head, up 2.2% from last year
  • July 2015 Cattle: Heifers for Replacement
       U.S.: 4.9 million head, up 6.5% from last year
  • July 2015 Cattle: Calf Crop
       U.S.: 34.3 million head, up 1.2% from last year
  • July 2015 Price Estimates for 2014/15 Crops:
       Corn $3.70 per bushel, up 5 cents from last month
       Soybean $10.05 per bushel, steady from last month
  • July 2015 Price Estimates for 2015/16 Crops:
       Corn $3.75 per bushel, up 25 cents from last month
       Soybean $9.25 per bushel, up 25 cents from last month
  • June 2015 Acreage Estimates for 2015/16 Crops:
       Corn 88.9 million acres, down 1.7 million from last year
       Soybean 85.1 million acres, up 1.4 million from last year
Demand Remains Robust (7/10/15)

The July USDA World Ag Supply and Demand Estimates (WASDE) report held some interesting nuggets for the market to chew on. Starting with the 2014 crops, demand remained robust as all of the major demand sectors were increased for the crops in the bins. Corn feed demand was increased 50 million bushels. Ethanol demand for corn was raised 25 million bushels. Corn export demand was also increased 25 million bushels. Soybean crush bumped up 15 million bushels and soybean exports were increased the same amount. These changes pulled 2014/15 ending stocks below the average trade expectations and allowed USDA to increase its' season-average price estimate for corn to $3.70 per bushel, up 5 cents from last month. The soybean season-average price estimate remained at $10.05 per bushel.

Looking at the 2015 crops, the acreage numbers from last month's report were the only update on the supply side. So yield and production estimates came in above trade expectations as the trade was looking for a downshift in yields given the weather issues this spring and summer. Current estimates have the national average corn yield at 166.8 bushels per acre and the national average soybean yield at 46 bushels per acre. Given the June acreage numbers, that would put production at 13.53 billion bushels for corn and 3.885 billion bushels for soybeans. Both of those numbers were roughly 100 million bushels above trade expectations.

On the demand side for the 2015 crops, the news was mixed. Increases were reported for corn usage in ethanol and for soybean crush. However, corn feed usage and exports were lowered. The end result is lower 2015/16 ending stocks than previously estimated by USDA, but the numbers still exceeded trade expectations. Corn stocks were projected at 1.6 billion bushels, while soybean stocks stood at 425 million bushels. With the tightening of the stocks for 2015/16, USDA increased both the corn and soybean season-average price estimates by 25 cents per bushel, with corn at $3.75 per bushel and soybeans at $9.25 per bushel.

Cattle (7/31/15)

USDA recently released two reports estimating July 1, 2015 cattle inventories-the July Cattle report (also referred to as the mid-year Cattle Inventory report) and the July Cattle on Feed report. The USDA data provides confirmation that herd expansion is underway and clearly demonstrates that herd rebuilding will likely be a lengthy process and a slow one, at least initially. This should not be a major surprise as the current size of the herd, decrease in land available for grazing beef cows or producing needed forage, and the biology of cattle production implies a strict limit on the speed of herd expansion. The total number of cattle and calves at 98.4 million head is up 2.2% from a year ago. Beef cow numbers are up 2.5% at 30.5 million head. USDA estimates 4.9 million head of replacement beef heifers are destined to enter the national beef breeding herd, 6.5% more than in 2014. Almost all final estimates were within the range of pre-report expectations. The only exception was heifers for milk cow replacement being up 2.4% compared to the pre-report estimate of up only 0.3%. This number, however, has much larger implications for future milk supplies and dairy prices than it does for beef production.