Iowa Farm Outlook & News

Headlines
  • 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
  • July 2016 Cattle on Feed: Feedlot Inventory
       U.S., 1,000+ head: 10.356 million head, up 1.2% from last year
       Iowa, 1,000+ head: 610,000 head, down 4.7% from last year
       Iowa, <1,000 head: 545,000 head, down 3.5% from last year
  • July 2016 Cattle on Feed: Feedlot Placements
       U.S., 1,000+ head: 1.525 million head, up 3.0% from last year
       Iowa, 1,000+ head: 54,000 head, down 19.4% from last year
       Iowa, <1,000 head: 51,000 head, up 4.1% from last year
  • July 2016 Cattle on Feed: Marketings
       U.S., 1,000+ head: 1.912 million head, up 9.4% from last year
       Iowa, 1,000+ head: 72,000 head, down 5.3% from last year
       Iowa, <1,000 head: 74,000 head, down 17.8% from last year
Livestock
Fed Cattle (8/1/16)

Mid-summer has passed by. This is a good time of year to take stock of price levels and how the forward market is shaping up for fed cattle. The negotiated Iowa-Minnesota slaughter steer price for the first seven months of this year averaged just above $128.00 per cwt compared to a shade below $159.00 last year, a drop of 19%. Fed cattle typically have seasonal price lows in the summer, when supplies are typically the largest, making one argument that prices experienced in July could be the bottom. Feedlot inventories, placements and marketings and lower carcass weights are also positive signs for prices. With the long sustained positive basis to futures that persisted for much of the year, there had been little interest on the part of feeders to basis forward contract cattle anywhere close to par with the deferred futures. However, it appears a basis change is in the wind. The long-lived futures market discounts are on their way out and a narrowing of the basis is on its way in. Taking price protection with basis forward contracts could become more attractive if historical basis levels prevail.

Crops
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.

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