Iowa Farm Outlook & News

  • June 2017 Hogs & Pigs: Inventory of All Hogs & Pigs:
       U.S. 71.650 million head, up 3.4% from last year
       Iowa 22.200 million head, up 6.7% from last year
  • June 2017 Hogs & Pigs: Breeding Herd Inventory:
       U.S. 6.069 million head, up 1.5% from last year
       Iowa 1.030 million head, up 6.2% from last year
  • June 2017 Hogs & Pigs: Market Hog Inventory:
       U.S. 65.581 million head, up 3.6% from last year
       Iowa 21.170 million head, up 6.8% from last year
  • June 2017 Prices for 2016/17 Crops:
       Corn $3.35 per bushel, down 5 cents from last month
       Soybean $9.55 per bushel, steady with last month
  • June 2017 Prices for 2017/18 Crops:
       Corn $3.40 per bushel, steady with last month
       Soybean $9.30 per bushel, steady with last month
  • June 2017 Acreage for 2017/18 Crops:
       Corn 90.886 million acres, up 890,000 from March intentions
       Soybean 89.513 million acres, up 31,000 from March intentions
Hogs & Pigs (7/1/17)

Numbers in USDA's June Quarterly Hogs and Pigs report held few surprises. With one exception all numbers were within 1% of analysts' pre-report expectations. That one number, the larger year over year change in March through May sows farrowing, was partially offset by a deviation in the opposite direction of the March through May pigs saved per litter. These two numbers derive the March through May pig crop. The offsetting percentages leave me with little concern over the one deviation from expectations of a mere 1.4% in sows farrowing. The March through May pig crop, while slightly larger than expected, was within the range of expectations. And the pig crop is what matters at the end of the day for pipeline supplies. June's report suggests U.S. pork production will continue to post year over year increases for at least several more quarters. Larger supplies generally result in lower prices. However, this year's hog market is going against that adage with both larger supplies and higher prices. That reflects strong demand, fueled by the surge in U.S. pork exports, up 15% at the end of April. Remember that prices are still determined by both supply and demand factors. If demand were to flatten or soften, larger supplies will depress prices. This reports reaffirmation of strong supplies, both near and longer term, underscores the heightened role realized demand strength will have on observed prices.

Acreage Shifts and Crop Flows (6/30/17)

The Acreage and Grain Stocks reports were released today. And for the most part, the numbers were within the range of expectations. The corn numbers ran a bit higher than the trade expectations, but the soybean numbers were a bit below. For corn, national acreage was estimated at 90.9 million acres. That is roughly 900,000 acres more than farmers indicated in March. Producers in Iowa, Nebraska, Kansas, North Dakota, Michigan, and Colorado increased corn plantings, raising corn acreage by at least 100,000 acres in each state when compared to the March projections. Meanwhile, producers in Illinois, Indiana, and South Dakota reduced corn area by at least 100,000 acres in each state. For soybeans, national acreage was estimated at 89.5 million acres, just 31,000 acres more than the March intentions. While farmers in Illinois, North Dakota, and Missouri increased soybean plantings significantly when compared to intentions, farmers in Iowa, Indiana, Kansas, and Louisiana offset those gains. Overall, the trade expected more soybeans and less corn. And the bigger surprise is likely the smaller soybean acreage number.

National stocks for both crops were up 11 percent compared to last year, but that was to be expected given the record production for both crops last fall. The key feature in the stocks report to me was the disappearance rates. For corn, quarterly disappearance was up 9 percent, while for soybeans it was up 18 percent. So crop usage remains robust and has continued to chew through the large supplies. Combined, these reports provided a little positive news for the crop markets.