Iowa Farm Outlook & News
- July 2016 Prices for 2015/16 Crops:
Corn $3.65 per bushel, down 5 cents from last month
Soybean $9.05 per bushel, steady with last month
- July 2016 Prices for 2016/17 Crops:
Corn $3.40 per bushel, down 10 cents from last month
Soybean $9.50 per bushel, steady with last month
- June 2016 Planted Area for 2016/17 Crops:
Corn 94.1 million acres, up 500,000 from March
Soybean 83.7 million acres, up 1.5 million from March
- Hogs and Pigs: Inventory of All Hogs and Pigs
U.S.: 68.381 million head, up 1.8% from last year
Iowa: 20.600 million head, down 1.9% from last year
- Hogs and Pigs: Breeding Herd
U.S.: 5.979 million head, up 0.9% from last year
Iowa: 970,000 head, down 3.0% from last year
- Hogs and Pigs: Market Hogs
U.S.: 62.402 million head, up 1.9% from last year
Iowa: 19.630 million head, down 1.8% from last year
Lean hog futures for much of the year have been trading on the thesis of steady pork supplies and robust export demand. But recent price movements have opposed these leading arguments. Lower feed prices, larger slaughter runs, and uncertainty regarding how large exports can and will expand have contributed to the reassessment of the price potential. The challenge for pork producers the rest of this year will be in managing marketings. If space is available, producers may find it profitable to feed hogs to heavier weights given the favorable hog to feed price ratio. However, the concern over large slaughter runs and a fixed slaughter capacity going into October, November and December means the industry must remain current on slaughter inventory so that more market hogs do not get pushed into peak slaughter weeks. In the event that there are weeks where there are more hogs out there than U.S. packers are able to harvest, prices will most certainly fall precipitously. Playing catch-up is not a position the market wants to be in. With the possibility of significant price drops during certain weeks throughout the third and fourth quarters, taking price protection at current prices is advised.
Supply and Demand Move Higher (7/12/16)
The July updates from USDA pushed both crop supplies and demands higher. But in the longer run, stock levels are projected to be higher, with steady to lower prices. On the supply side, the revised acreage and stock numbers from last month were fully incorporated into the projections. Corn production was increased by 110 million bushels, while soybean production rose by 80 million.
On the demand side, there were several offsetting moves. For corn in both old and new crop settings, feed and ethanol usage were lowered, while food and export usage rose. For soybeans, export demand was increased for both old and new crop. Crush demand was lifted slightly for the new crop, but seed and other uses were lowered for the old crop. Putting all of the shifts together results in slightly lower old crop ending stocks, but higher new crop (2016/17) stocks.
Season-average prices were held steady for soybeans, at $9.05 for the 2015/16 crop and $9.50 for the 2016/17 crop. Corn season-average prices were reduced by 5 cents on the 2015/16 crop to $3.65 per bushel and by 10 cents on the 2016/17 crop to $3.40 per bushel.