Big crops tend to get bigger, and Marty Foreman, and economist with Doane Advisory Service, told Drovers and food360 reporters today that corn prices are likely to remain low or drift lower into the harvest season. Foreman says the USDA probably will increase its estimate of the
Foreman says there has been some concern over the crop’s slow development leaving some areas susceptible to an early freeze. Recent warm weather, however, has helped crop maturity, and current weather forecasts do not indicate any chance of frost in corn-growing areas over the next couple weeks.
Prices might rebound slightly in the short term, but Foreman expects a general trend toward lower prices through harvest.
Lower corn prices are contributing to some optimism in the cattle markets, Foreman says. Supplies of market-ready cattle remain tight, and prices should improve marginally through this fall. We need some improvement in consumer demand to drive wholesale beef prices higher before packers will pay much more for cattle though. Last week brought some improvement, with an $85 market developing late Friday. Foreman says early indications are that Labor Day shoppers did a good job of clearing out beef supplies at supermarkets, so demand from retailers should be good in the coming weeks.
Foreman expects that fed-cattle prices should push into the upper $80s to $90 this fall, but could come under some downward pressure during the first quarter of 2010. Feedyards recently have been placing significant numbers cattle in the heavier weight classes, he explains, which typically means heavier cattle going to slaughter and larger beef production.
In the longer term, he says, as the economy recovers and beef demand improves, prices should strengthen. Also, as producers anticipate higher prices they are likely to retain more heifers for breeding, further reducing supplies of feeder and fed cattle. Foreman expects that some herd expansion could begin next year, if the economy provides the right signals.