The World Agricultural Outlook Board of USDA released their monthly World Agricultural Supply and Demand Estimates report (WASDE) this morning, July 11. The report revealed what most had feared, a much lower per acre yield than trend would suggest. The report currently pegs U.S. corn yield at 146 bushels per acre, down 20 bushels or 12.1 percent from the June report.
After taking into account the slight bump in acres from the June 29 Acreage report -which was negated for the most part due to an expected increase in abandoned acres- U.S. production is estimated at 12.970 billion bushels. This lower projected supply is expected to create some rationing in the market, thus projected demand for all categories is lowered from last month. Corn used for feed and residual purposes is currently projected at 4.8 billion bushels, down 11.9 percent from last month, and corn for ethanol is lower by 2.0 percent at 4.9 billion bushels. Collectively, these would result in a carry-over of 1.183 billion bushels, or 9.3 percent of total use.
The reported per acre yield is a sharp decline from last month. Pre-report estimates expected the national yield to be 154.1 bushels per acre with the lowest expectation being 147.1. In the past USDA has typically been very cautious when revising supply and demand estimates. Based on this pattern, there should be a rooted concern about what future reports will reveal. Keep in mind the May through July estimates are subjective with respect to yield and next month’s report will be the first of the growing season to incorporate objective field data into the yield estimate. Still, the optimism of a bin busting corn crop have dried up along with the record-breaking acreage.
Beef production reported in this month’s WASDE for the current year is projected to be 25.178 billion pounds, higher by 90 million when compared to last month’s estimate, as the deteriorating pasture conditions will likely push more cattle into the supply chain earlier than expected. On the other hand, after taking these early marketings into account, 2013 beef production is lowered by 15 million pounds to 24.560 billion.
Fed cattle prices were mostly flat again last week. The five-area live price was $117.11/cwt. and the dressed price was $187.03/cwt. For the holiday-shortened week, Oklahoma calves were lower at just over $160/cwt. while feeders were up slightly at $151. Corn and DDGS prices posted strong gains again as the dry, hot conditions continue to weigh on the crop.