Brenda Boetel – Department of Agricultural Economics, University of Wisconsin-River Falls
715-425-3176
Corn
- Corn rated as good or excellent is at 74%, compared to 76% last year.
- Dollar has been down and lower against the dollar index, which has boosted corn and soybean prices.
- Traders tend to focus on value of the dollar when there is little supply and demand information.
- Export shipments have been lower than needed to meet current USDA forecasts of 1.825 BB.
- Commitments are also lagging.
- Price has rallied the first week of June and may break the two-month downtrend.
- Market is still oversold.
- RFS for ethanol was cut and will require 3.75 billion fewer gallons of corn-based ethanol, which would be
- 1.3 billion bushels of corn. The mandate hasn’t been binding recently as US has produced above it.
- For 2014 to 13.25 billion gallons from 14.4 billion
- For 2015 to 13.4 billion gallons from 15 billion
- For 2016 to 14 billion gallons from 16 billion
- December 2015 corn price on June 4, 2015 of $3.80 is down approximately 18% from last year’s June 4 price of $4.6175 and will likely continue downward till harvest.
Soybean
- Rain has been affecting western Midwest and there may be a decrease from the forecasted 87 Million acres projected plantings.
- Export demand for soybeans and meal is strong and continuing. Exports are on track to be 10 million higher than current USDA forecasts.
- USDA may drop carry by 10 million to 340 million bushels due to strong demand.
- Quarterly stocks report is due June 30 and will give direction for soy prices.
- RFS was bullish for soy oil as proposed levels for biodiesel were increased.
- For 2014 to 1.63 billion gallons from 1.28 billion
- For 2015 to 1.7 billion gallons from 1.28 billion
- November 2015 soybean price on June 4, 2015 of $9.1875 is down approximately 23% from last year’s June 4 price of $11.9475 and will likely continue to drop. This week’s increase has been due to weather concerns regarding planting, but even with a small decrease in acreage likely see prices continue to drop long-term.
- November futures prices will likely dip as low as $8.75.
- Market wants beans sooner rather than later as seen in the spread and farmers are light sellers. Tiete-Parana waterway in Brazil, which typically transports 2.5 MMT of soybeans and corn, will reopen in second half of 2015. The reopening will cut transportation costs by approximately 10-15%.
Wheat
- Heavy rains may bring about yield losses.
- Likely see small increase in USDA ending stocks for 2014/2015 and 2015/2016 marketing years.
- New crop began on June 1.
- HRS spring wheat is at 69% good to excellent rating as of May 24.
Poultry
- Avian Influenza continues to impact turkey flocks in Minnesota and Wisconsin, and laying hens in Iowa.
- Over 43.4 million birds have been affected
- Expectations are for epidemic to be over by August.
- Chicken production has increased by 7.9% in 2015 over 2014 levels.
- Poultry stocks were up 21% from 2014.
Pork
- Pork production has increased by 6.8% in 2015 over 2014 levels.
- Pork stocks were up 19.8% from 2014.
- Pork exports are up 4% from 2014, but value was down 14% from 2014.
- West coast port congestion is past and the situation is returning to normal.
Beef
- Beef production has decreased by 3.7% in 2015 over 2014 levels.
- April beef exports were the largest since December but down 7% from 2014. Value is up 3% from 2014.
- Australia has not seen decrease in beef production and it is gaining a second tariff advantage in Japan.
- Packer margins have improved with higher wholesale beef prices. Feedlots continue to bid up calf prices higher than the feeder cattle index.
- Beef cutout values remain high although down slightly to a recent $248.48. Tight supplies though and continued strong demand may bring more record prices in June.