October 14

USDA corn crop estimates keep inching lower but are still higher than what private analysts were anticipating following the devastating spring floods in the Midwest. In Thursday’s WASDE report, the USDA cut its corn production forecast, but it also raised yield per acre and lowered projected corn usage for ethanol and exports.

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Sheena Levi
October 7

Following a 10-year fight, the World Trade Organization finally sided with the U.S. in a case involving subsidies the European Union gives to Airbus (the top Boeing competitor). As a result, the U.S. Trade Representative (on Oct 2) announced a plan to impose retaliatory tariffs on European products. The tariffs will go into effect on Oct 18.

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Sheena Levi
September 30

The U.S. pork industry continues to be driven by two distinct narratives: 1) very large current pork supplies, and 2) the prospects for a huge increase in future exports due to China’s African Swine Fever hog losses. In Friday’s quarterly Hogs and Pigs report, the USDA reported total U.S. herd inventories on Sept 1st at 77.7M head, up 3.4% from a year ago and a half-point above analyst’s expectations.

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Sheena Levi
September 23

Friday’s Cattle on Feed Report was bullish for prices. The USDA said new placements onto feedlots in Aug were 9.0% below a year ago, and that the Sept 1st feedlot inventory, at 11.0M head, was down 1.3%. In last week’s Livestock, Dairy & Poultry Outlook, the USDA highlighted the Aug 9 fire at a Tyson Foods plant in Holcomb, KS, and how capacity constraints will slow the pace of cattle slaughter through year’s end.

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Sheena Levi
September 16

In Thursday’s WASDE report, USDA crop estimates got a little closer to what private analysts were anticipating following spring floods in the Midwest. Corn output for 2019/20 was revised downward, from 13.9B bushels (Aug) to 13.8B, while average private trade estimates have increased from 13.1 to 13.5B. Corn futures, which hit highs of $4.54 on 7/12, fell to $3.40 (9/9) before recovering post-report to $3.55 on Friday (9/13).

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Sheena Levi
September 9

After years of abundant grain and protein supplies (and modest prices) the cycle appears to be turning. For starters, the USDA has absolutely no handle on the real damage to this year’s corn and soybean crops. There are large variances between government and private estimates - and the argument will not likely be settled until this year’s harvest is in.

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Sheena Levi
September 3

In the August Livestock, Dairy & Poultry Outlook, the USDA again reduced 2019 milk output to just 0.1% above a year ago. Steadily declining dairy cow numbers have been mostly offset by increases in milk yield per cow. In the Aug 22 cold storage report, the USDA said Aug 1st butter supplies were 1.1% higher than July  and 3.6% above a year ago. That indicates weaker summer demand and is bearish for prices.

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Sheena Levi
August 26

In Friday’s Cattle on Feed Report, the USDA said new placements onto feedlots in July were down 2.1% from a year ago, but that the Aug 1st feedlot inventory, at 11.1M head, was still up 0.2%. The big news in beef is the fire that occurred on Aug 9 at the Tyson Fresh Meats plant in Holcomb, KS. The plant processed 6,000 head of cattle per day or 6.2% of the country’s total capacity. The shortfall will be very difficult to make up based on already tight industry capacity.

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Sheena Levi
August 19

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.

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Sheena Levi
August 12

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.

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Sheena Levi
August 5

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.

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Sheena Levi
July 29

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.

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Sheena Levi
July 22

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.

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Sheena Levi
July 15

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.

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Janet Cohen
July 8

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.

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Janet Cohen
July 1

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.

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Sheena Levi
June 24

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.

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Sheena Levi
June 17

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.

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Sheena Levi
June 10

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.

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Sheena Levi
June 3

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.

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Sheena Levi