April 9 Weekly Update

4/9 – It’s been a while since we’ve been concerned about feed prices. Corn, which was in the $3.40s in Jan, closed at $3.88/bu on Friday. Corn prices have been mostly sub-$4.00 since mid-2014. Both the USDA’s Perspective Plantings and the Quarterly Stocks reports were bullish for corn prices. The USDA pegged corn acres at a below-expected 88.02M acres vs. 90.2M last year. March 1st corn stocks were a little more than expected at 8.89B bu, but smaller corn crops in South America will translate to larger U.S. exports and declining supplies as the year progresses. Forward futures contracts for the 2nd half of 2018 are averaging $4.05; 2019 contracts are averaging $4.21. Soymeal prices have advanced from $313 to $386/ton so far this year. Poultry producers need strong export and domestic demand to support prices for margins to stay positive.