Record rainfall has delayed planting almost beyond hope this year. As of 6/10, only 83% of the corn crop was planted, compared to 99% a year ago and a 5-year average of 99%. Five-to-nine million acres of corn could go unplanted this year. That would represent a 6-to-10% drop in corn acres vs. planting intentions.
While rain-delayed Midwest crops and China’s hog situation have dominated the commodity news, butter prices have been quietly creeping higher. U.S. milk supplies are tightening due to lower cow herd numbers and cream for butter processing is reported to be short in the Midwest.
Record rainfall has delayed planting almost beyond hope this year. Last week’s crop progress report was more of the same. The corn crop is 58% planted vs. 90% last year and a 5-yr average of 90%. Soybeans are 29% planted vs. 74% a year ago. With the calendar turning to June, farmers are out of time.
In Friday’s Cattle on Feed Report, the USDA said new placements onto feedlots in April were up 8.7% from a year ago. The May 1st feedlot inventory at 11.8M head was 2.2% above a year ago (highest May number since the data series began in 1996) - partly driven by an increase in the number of heifers (breeding stock) being sent to slaughter.
On Friday, the U.S. finally reached a deal with Canada and Mexico to lift U.S. steel and aluminum tariffs, while also confirming Canada and Mexico would remove tariffs on a wide range of U.S. goods, including pork and cheese.
In Friday’s WASDE, the USDA released its first projections for next year. The outlook for 2019/20 U.S. wheat is for larger supplies, lower exports, and larger stocks. Wheat prices for 2019/20 are projected at $4.70/bu - down 9.6% from $5.20 for 2018/19.
Beef middle meats and ground beef are in the midst of their annual seasonal price run-up ahead of the big 3 grilling holidays – Memorial Day (5/27), Father’s Day (6/16) and July 4th. So far this year, #180 choice boneless strips at $8.17/lb are up 54.7% after starting the year a $5.28 – and are currently 4.5% above a year ago.
In April’s Livestock, Dairy & Poultry Outlook, the USDA (again) dropped its first-half 2019 broiler output forecast to 21.16B pounds, now up just 0.4% from a year ago. Looking at Q1 data, the total number of (broiler) head slaughtered was up 0.3% from a year ago, while YOY slaughter weights were marginally negative.
In Thursday’s Cattle on Feed Report, the USDA said new placements onto feedlots in March were up 4.8% from a year ago. The April 1st feedlot inventory at 11.96M head was 2.0% above a year ago and the highest April inventory since the data series began in 1996.
China’s African Swine Fever just keeps going from bad to worse. On Thursday, Rabobank said that up to 200 million Chinese pigs could be culled or die as result of the disease. The drop would drag down China’s 2019 pork output by 30% from a year ago – a decline of 16 million metric tons.