The U.S. Department of Agriculture (USDA) issued its latest World Agricultural Supply and Demand Estimates (WASDE) and crop production reports Friday morning, and the agency forecast U.S. corn production would reach 13.56 billion bushels in 2015, well ahead of analysts’ estimates for 13.46 billion bushels. For the crop year ending in August 2016, the USDA forecasts a U.S. corn stockpile of 1.56 billion bushels, down from a stockpile of 1.73 billion bushels this past August.
The WASDE report notes that total meat production in the United States from cattle, pigs and poultry will be 94.7 billion pounds in 2015, up from 92.17 billion pounds in 2014. The USDA’s estimate for 2016 is currently 97.59 billion pounds.
Corn prices have dropped about 0.7% to about $3.89 a bushel, above a price of about $3.60 a bushel last year, and also well below a 52-week high of around $4.50 a bushel in mid-July, when prospects for a big harvest were lower.
The price for live cattle is down nearly 1.2% at $1.29 a pound today, after bouncing off a 12-month low of around $1.20 earlier this month.
Both corn and cattle have recently gotten upbeat news from analysts at Macquarie who see an “anomaly” in the market for cattle and corn, and who have placed a three-month positive rating on corn, following a close brush with a price of $4 a bushel on Wednesday. The analysts are cited at Agrimoney: [Corn production is] “set to decline in the current season, given losses in North and South American planted areas, and yield underperformance compared to last season.”
Friday’s reports from the USDA seem to contradict that sentiment.
And on market prices for beef, here is what Friday’s cattle market report at Agcenter.com had to say:
For the past three weeks, the slaughter has ranged from 570-576,000 cattle. Three years ago the slaughter was over 700,000 per week. Beef production currently is around 480 million pounds a week compared to 580 million pounds three years ago. These dramatic differences illustrate the current problem with beef demand. We are currently producing 17% less beef than 3 years ago and selling it for the same price. Imagine in today’s environment if we were slaughtering 700,000 cattle, we would need to give the beef away.