Last week’s Crop Production report shocked the corn market. The USDA said that U.S. farmers planted 90.0M acres of corn this year, down from last month’s 91.7M forecast. But traders had expected big, flood-driven losses in the 3M-6M acre range.
In the August Dairy Products Report, the USDA said total cheese output was up 0.6% (from a year ago) in June and that YTD production is up 0.8%. However, cheddar output is down 2.8% YTD. Since block cheddar is what’s used to settle contracts at the CME, cheese “market” prices are likely to remain well supported through year’s end.
Last week, Rabobank released a report saying that China’s ASF-ravaged hog herd is down 40% from a year ago. Rabobank’s numbers are supported by a Reuters survey of suppliers to Chinese farms. Producers of vaccines, feed additives and genetics also estimated losses at 40-50%, based on falling sales for their products and local knowledge of the extent of the disease.
In July’s Livestock, Dairy & Poultry Outlook, the USDA said total red meat and poultry output in the first half (H1) of 2019 was 1.3% above that of a year ago. Beef output was up just 0.2% in H1. More heifers in the slaughter mix (up 7.2% in H1) helped pull down slaughter weights and indicates that the cattle expansion cycle is ending.
In Friday’s Cattle on Feed Report, the USDA said new placements onto feedlots in June were down 2.3% from a year ago, but that the July 1st feedlot inventory, at 11.49M head, was still 1.8% above last year. May/June have traditionally been seasonally large placements months, as feeders move off wheat pasture in the Southern Plains.
Record rainfall this year has wreaked havoc with crop planting and with USDA forecasting. The June 28 acreage report from the National Agricultural Statistics Service (NASS) pegged 2019 corn output at 13.9B bushels vs. the trade’s expectations of 13.3B.
Dairy prices are bullish at a time of year when the seasonal spring milk “flush” is usually tempering prices. May milk output was down 0.4% from a year ago – and tighter milk supplies are having an adverse effect on dairy products production. Butter output in May was 4.2% below a year ago.
In Friday’s quarterly Hogs & Pigs report, the USDA confirmed large U.S. pork supplies. Productivity jumped in the March-May quarter, with the number of pigs per litter up 3.5% from a year ago – roughly triple the pre-report estimates.
In Friday’s Cattle on Feed Report, the USDA said new placements onto feedlots in May were down 2.8% from a year ago, but that the June 1st feedlot inventory, at 11.74M head, was still 1.6% above last year. May has traditionally been a month for seasonally large placements as feeders begin moving off wheat pasture in the Southern Plains.
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.