USDA shocked the market Friday with its latest Acreage report (see below), which sent Corn futures diving hard. That fueled gains in Feeder Cattle futures, which closed an average of 50¢ higher (12¢ higher to $1.05 higher in spot Aug). Prices at the close were well off of session highs with likely week-end and month-end position squaring.
Live Cattle futures closed mixed, from 71¢ lower across the front half of the board—not counting expiring June—to an average of 13¢ higher across the back half, not counting newly minted Dec ’20.
Negotiated cash fed cattle trade began to develop by late Friday afternoon, but there were too few transactions to trend in any region.
Early live sales in the Southern Plains were at $109/cwt. on a live basis, in the middle of the previous week’s trading range. The Texas Cattle Feeders Association also reported its members trading at $109. Early live sales in Nebraska were steady to higher at $109.00-$111.50. In the western Corn Belt, though, the $109-$112 for early live sales was $1-$3 less than the previous week. Earlier week dressed sales in the latter two regions were at $180, which was steady in Nebraska and steady to lower in the western Corn Belt.
Through Thursday, the 5-area direct weighted average price for steers was $110.58/cwt.
Wholesale beef values were firm on Choice and lower on Select with moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 63¢ higher Friday afternoon at $219.03/cwt. Select was $1.34 lower at $195.56. At $24.10, the Choice-Select spread Friday afternoon was the highest since May of last year.
Major U.S. financial indices closed higher on Friday, led by stronger prices for shares of the nation’s largest banks, after they passed the federal stress test administered each year.
The Dow Jones Industrial Average closed 73 points higher. The S&P 500 closed 16 points higher. The NASDAQ was up 38 points.
USDA’s Acreage report issued on Friday always was going to raise questions, given the uncertainty borne by late and prevented planting, the timing of the survey process and whatnot. Even so, few expected to see so many corn acres.
USDA estimated corn acreage at 91.7 million acres, up 3% from last year. That’s less than the 92.8 million acres estimated in the March Prospective Plantings report, but more than the 89.8 million acres estimated by the World Agricultural Outlook Board (WAOB ) in the June World Agricultural Supply and Demand Estimates, and about 5 million acres more than average estimates ahead of the report. Keep in mind, the acreage report is based on producer surveys, whereas the WAOB estimate is model-based.
USDA’s Grain Stocks report provided some corn market support, with USDA estimating corn stocks in all positions June 1 at 5.20 billion bu., which was 2% less than the previous year.
Of the total corn stocks, 2.95 billion bu. are stored on farms, up 7% from a year earlier. Off-farm stocks, at 2.25 billion bu., are down 12% from a year ago.
Corn futures closed 13¢ to 21¢ lower through Jul ’20 on Friday and then 2¢ to 6¢ lower.
News was as bullish for soybeans as it was bearish for corn, at least in terms of acreage. USDA estimated 80.0 million acres of soybeans, which would be 10% less than last year and the fewest U.S. acreage since 2013. That’s far less than the 84.6 million acres forecast in the Prospective Plantings report and June WASDE.
Soybean futures closed mostly 10¢ to 12¢ higher.
Soybean stocks were more bearish, with soybeans stored in all positions estimated at 1.79 billion bu., which would be 47% more than a year ago, as a variety of factors, including trade issues and impacts from African Swine Fever weigh on U.S. soybean exports.
On-farm soybean stocks totaled 730 million bu., up 94% from a year ago. Off-farm stocks of 1.06 billion bu., were 26% more than a year ago.
USDA pegs the all wheat planted area at 45.6 million acres, which would be 5% less than last year and just slightly less than the 45.8 million acres estimated in March’s Prospective Plantings report and the June WASDE.
Old crop all wheat stored in all positions June 1 totaled 1.07 billion bu., down 2% from a year earlier. On-farm stocks are estimated at 207 million bu., up 58% from last year. Off-farm stocks of 865 million bu. were 11% less than a year ago.
According to the Agricultural Marketing Service (AMS), USDA will re-survey producers in 14 states next month regarding acres planted to corn, cotton, sorghum and soybeans.
“If the newly collected data justify any changes, NASS will publish updated acreage estimates in the Crop Production report to be released Aug. 12,” AMS analysts explain.