Today s Newsletter Market Situation Crop Progress 1 Grain Use 2 Outside Markets 5 Marketing Strategies 2016 Feed Grain Marketing Plan 6 Upcoming Reports/Events 7 Market Situation Crop Progress. The Crop Progress report from USDA today showed minor changes to condition categories for corn but left the condition index unchanged. The percent of corn rated poor increased by 1% from the previous week, fair was down 1%, good down 1%, and excellent up 1%. The condition index held steady at 385, above the average score for this time of year of 372. 100% 90% 80% 70% 60% 2016 U.S. Corn Crop Condition Ratings 500 450 400 350 50% 40% 30% 20% 10% 0% 300 250 200 150 100 Very Poor Poor Fair Good Excellent 2016 Average Source: Crop Progress, USDA USDA June 168.0 Trend:166.0 The percent of the crop rated good and excellent nationwide is 75%, same as last week. The good and excellent ratings in the top 10 major producing states (last week in parentheses): Illinois, 71% (75); Indiana, 73% (72); Iowa, 79% (79); Kansas, 65% (69); Minnesota, 81% (79); Missouri, 63% (66); Nebraska, 79% (79); Ohio, 67% (64); South Dakota, 73% (74); Wisconsin, 86% (86). The Drought Monitor last week showed about 30% of the Midwest in some degree of dry condition. The level of moderate drought was 2% and no areas were reported in a condition more severe than that. 1
In the corn growing areas of the High Plains, North Dakota was 13% abnormally dry, more so in the southwest than south east; South Dakota 28% abnormally dry, 16% moderate, and 3% severe but most of that in the west; Nebraska 10% abnormally dry, 1% severe (northwest), and Kansas 8% in the abnormally dry category, along the eastern side of the state. Percent Drought Coverage, Midwest 2016 April 5, 35 30 25 20 15 10 5 0 4/5/2016 4/12/2016 4/19/2016 4/26/2016 5/3/2016 5/10/2016 5/17/2016 5/24/2016 5/31/2016 6/7/2016 6/14/2016 6/21/2016 6/28/2016 7/5/2016 7/12/2016 7/19/2016 7/26/2016 8/2/2016 8/9/2016 8/16/2016 8/23/2016 8/30/2016 9/6/2016 9/13/2016 9/20/2016 9/27/2016 10/4/2016 D4 D3 D2 D1 D0 Grain Use. Grain use estimates based on livestock inventories got a boost this week from higher numbers for poultry, cattle, and pork. USDA s measure of Grain Consuming Animal Units is estimated to reach an all-time high in 2016 at 95.374 million, just above the previous record of 95.084 million in 2007. Cattle still comprise the largest segment of the index at 37%, followed by poultry at 33% and pork at 29%. Energy feed per grain consuming animal, including ddgs, is expected to stay about steady at 1.81 mt/gcau. The average level of feed consumption since 1975 is 1.79 mt. 2
Feed and Residual Use GCAU mil 120 Year to Year Change: GCAU: +2.3% Feed/GCAU: -0.3% Energy feed, mt/gcau 2.5 100 80 2.0 1.5 60 40 20 1.0 0.5 0 0.0 Dairy Cattle on Feed Other Cattle Hogs Poultry Other Livestock Feed per GCAU Plus DDGs USDA Feed Grain Database and Agricultural Marketing Resource Center, 33% Poultry 29% Pork 37% Cattle The weekly report of broiler chick placements shows an increase of about 1% for the week ending June 18 th. For the 2015/16 corn marketing year, placements are on par with a year ago. Thousand 175,000 2015/16 Broiler Chicks Placed 19 states, weekly 2015/16 MY Total to Date Year ago: -0.0% Average: +2.0% Jun 18, 2016 101% of last year 103% of average 170,000 165,000 160,000 155,000 150,000 Source: USDA/NASS, June 22, 2016 5-year average 2014/15 2015/16 3
Cattle on feed as of June 1 were 10.799 million head, up 2% from a year ago and back on par with the 5-year average. Contrary to seasonal trends, the June inventory was higher than the May. 000 head 12,000 Cattle on Feed 1,000+ capacity feedlots June 1 2016 102% of last year 100% of average MY to date Year ago: +1.1% Average: -2.8% 11,500 11,000 10,500 10,000 9,500 9,000 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 5-yr avg 2014/15 2015/16 Source: USDA/NASS, June 24, 2016 Hog inventory numbers are up almost 2% in June compared to last year and up 2% for the marketing year as a whole. U.S. All Hogs and Pigs Inventory 2015/16 MY Total to Date Year ago: +2.1% Average: +4.2% 000 head 70,000 69,000 68,000 67,000 66,000 65,000 64,000 63,000 62,000 61,000 60,000 69,185 68,869 67,474 June 1, 2016 +1.8% compared to last year +4.9% compared to average 68,381 1-Sep 1-Dec 1-Mar 1-Jun 5-yr avg 14/15 15/16 Source: Quarterly Hogs and Pigs, USDA/NASS, June 24, 2016 4
Outside Markets. Given the outcome of the vote by Great Britain to leave the European Union, markets have reacted about as expected: the British pound is down, the Euro is down, the dollar is up, and stocks are lower. The yield on U.S. Treasuries is lower on the increased demand for less risky investments. Commodity markets, as measured by the Reuters CRB Index are down as well. Prices as of 3:00pm CDT: II Qtr 2016 1-Apr 27-Jun net change % change S&P 500 Index 2,072.78 2,000.54 (72.24) -3.49% CRB Commodity Index 168.03 187.57 19.54 11.63% SEP 16 Crude Oil 40.38 47.40 7.02 17.38% SEP 16 Copper 2.1785 2.1270 (0.0515) -2.36% SEP 16 Dollar Index 94.688 96.580 1.8920 2.00% JUL 16 Corn 3.5775 3.8525 0.2750 7.69% DEC 16 Corn 3.6975 3.9425 0.2450 6.63% DEC 17 Corn 3.8600 3.9650 0.1050 2.72% 5
Marketing Strategies 2016 Feed Grain Marketing Plan. This Thursday will be the release of two important reports from USDA, Acreage and Grain Stocks. The Acreage report will update the planting intentions survey information released at the end of March and will be incorporated into supply and demand estimates in the July WASDE. USDA s current numbers of 93.6 million planted acres and a yield of 168 bushels would add to ending stocks next August 31 st given a use estimate of 14.170 billion bushels. If we reduce acres by a million but yield prospects improve to 170 bushels, the ending stock situation will be about the same. The Grain Stocks numbers are an important check point for grain disappearance. Since feed and residual use is not directly measured each month, but is once again the largest use category for U.S. corn, the quarterly grain stock inventory reveals whether we are using grain at about the rate indicated by other factors and forecasts. Area and Yield Needed to Produce 14.170 billion bushel crop USDA June Use Estimate for 2016/17 Marketing Year Bushels per acre 180 175 Add to Ending Stocks 170 165 160 155 150 145 Reduce Ending Stocks 140 85 86 87 88 89 90 91 92 93 94 95 Planted acres, millions 6
My next marketing objective to add to 2016 feed grain sales is roughly from the timeframe from the Acreage report to the August crop report, the time in the growing season when area and yield estimates come more into focus. /bu 450 440 430 420 December Corn Futures and 2016 Marketing Plan 20% 20% 20% 20% 20% South American crop conditions Battle for Acres Planting Intentions Planting Intentions Grain Stocks Early season crop conditions/ progress Weather outlook Acreage Report/ Grain Stocks Weather Tassel and August Crop Report Cash sales at harvest 410 400 390 380 370 360 350 Sold 20% at 389¼ Sold 20% at 395 Sold 20% at 435½ 9/1/2015 9/11/2015 9/22/2015 10/1/2015 10/12/2015 10/21/2015 10/30/2015 11/10/2015 11/19/2015 12/1/2015 12/10/2015 12/21/2015 12/31/2015 1/12/2016 1/22/2016 2/2/2016 2/11/2016 2/23/2016 3/3/2016 3/14/2016 3/23/2016 4/4/2016 4/13/2016 4/22/2016 5/3/2016 5/12/2016 5/23/2016 6/2/2016 6/13/2016 6/22/2016 7/1/2016 7/13/2016 7/22/2016 8/2/2016 8/9/2016 8/16/2016 8/23/2016 8/30/2016 9/6/2016 9/13/2016 9/20/2016 9/27/2016 10/4/2016 10/11/2016 10/18/2016 10/25/2016 11/1/2016 11/8/2016 11/15/2016 11/22/2016 11/29/2016 12/6/2016 12/13/2016 Upcoming Reports/Events. June 30 July 1 July 12 July 22 Acreage Grain Stocks Registration open for The Executive Program for Agricultural Producers (TEPAP), January 8-14, 2017 Crop Production WASDE Short-term Energy Outlook Cattle on Feed 7
Mark Welch, Texas A&M AgriLife Extension Economist 600 John Kimbrough Blvd, Suite 335 College Station, Texas 77843 Tel. (979)845-8011 Fax. (979)845-4906 JMWelch@tamu.edu The opinions and recommendations expressed are solely those of the author and are intended for educational purposes only as part of the Texas A&M AgriLife Extension Service. The author and Texas A&M AgriLife Extension Service assume no liability for the use of this newsletter. The Texas A&M AgriLife Extension Service provides equal access in its programs, activities, education and employment, without regard to race, color, sex, religion, national origin, disability, age, genetic information, veteran status, sexual orientation or gender identity. The Texas A&M University System, U.S. Department of Agriculture, and the County Commissioners Courts of Texas Cooperating 8