USDA released it’s monthly projections for U.S. and global agricultural supply and use this morning. According to the market reaction the report was most shocking for soybeans. Both crushings and export use are forecast at 1.625 and 1.3 billion bushels (bbu), respectively, collectively 35 million bushels (mbu) lower then last month’s estimate for the 2011/12 marketing year. Marginal changes from last month’s projections were made for corn, cotton and wheat and no changes were made for rice. Lower corn sugar use brought corn demand down by 5 million bushels putting demand for all food, seed and industrial use at 6.405 bbu. Cotton projections were altered for both supply and demand. Total U.S. yield was lowered to 771 lbs/acre from 794 last month which brought the production estimate down 0.47 million bales to 15.83. Somewhat offsetting the lower supply was lower projected domestic milling, which is currently estimated at 3.6 million bales. Wheat exports were projected lower, from 975 to 925 mbu, due to increased competition from other countries.
Globally, corn ending stocks were bumped a little more than 5 million metric tons as production in China and – to a lesser degree – other countries are projected higher. Lower world cotton use pushed ending stocks higher by almost 3 million bales. Increased wheat production added a little more than 5 million metric tons to global ending stocks.
Soybean prices were hit hard today due to the shock of the increased ending stocks for the crop. Other crop futures felt the ramifications of the soybean pit and were down as well, though to a smaller degree.
Cash fed cattle lost steam this week and dropped anywhere from $3-10/cwt. Live cattle in the Southern Plains were called at $120/cwt on low to moderate demand across the region. Live and dressed cattle in Nebraska traded at $120-123/cwt -mostly $121/cwt- and $195/cwt, respectively. Feeders steers in Oklahoma City were steady to $2/cwt lower on a light test and feeder heifers were $2-3/cwt higher. Steer calves were steady to $3/cwt lower, while heifer calves were steady to $2/cwt lower. Feeders in Mississippi auctions were $2-$8/cwt higher and cull cows and bulls were $2-$5/cwt higher.
Live cattle futures were sharply lower this week. Boxed beef slipping late last week resonated with the market and prices took the biggest hit Monday. Feeder cattle were lower as well as the post Thanksgiving surge in the cash markets pulled back and brought futures with it. Corn was lower on the week but was mostly steady through Thursday. On Friday, USDA released their monthly supply and demand report, which revealed a tad more corn to carry-over than was projected last month. The biggest shock from the report was the projection of 35 million more bushels of soybeans due to lower crushings and exports. No huge changes were made to beef projections so there will be no devoted write up on the report this month, but tables recapping the report are below.
Wholesale beef prices were much lower this week following a pull back that started late last week. The Choice price took a big hit Thursday and ended the week at $188.57/cwt, down $5.35 from last week. Select continued to drift lower and ended at $172.18/cwt, down $3.23, which narrowed the spread slightly to $16.39.