The USDA released its Annual Crop Production, Grain Stocks and World Agricultural Supply and Demand Estimate reports on Jan. 11, showing a continued trend toward tighter grain supplies.
The agency actually raised its projection of
For corn, the agency reduced its projected ending stocks by more than 350 million bushels from its December 2007 forecast.
These prices will continue to pressure calf and feeder-cattle values. Feuz notes that feedlot cost of gain in October, when corn was priced around $3 per bushel, was around $65 per hundredweight. With $5 corn, the cost of gain rises close to $85 per hundredweight. With fed-cattle prices now close to $90 per hundredweight, he says, there is not much room for higher feeder-cattle prices. The breakeven purchase price for eight-weight steers would be about $93 per hundredweight and only $96 for six-weight steers. For the full Annual Crop Production report, follow this link.