22 October 2007

4 minute read

North America

There were some surprises in the October crop report. USDA increased the 2007 corn crop from 13.308 billion bushels in the September estimate to 13.318 billion bushes in the October. However, the increase was due to more harvested acres. The average corn yield per acre was reduced from 155.8 bushels in September to 154.7 bushels in October. The trade was expecting the yield estimate in October to be up from September.

The current estimate is for corn ending stocks in the 2007-2008 market year to be 1.997 billion bushels. The ending stock from this last market year was 1.304 billion bushels.

USDA current estimate for corn price in the 2007-2008 market year is $2,90-$3.50 per bushel or a midpoint estimate of $3.20 per bushel up from $3.04 in the 2006-2007 market year. In our opinion the average price for corn in the market will near USDA midpoint or higher otherwise corn will lose too many acres to soybeans in 2008.

USDA held the 2007 soybean yield at 41.4 bushels per acre in October the same as the September estimate. However, average of soybeans was reduced to 62.8 million bushels harvested in October from 63.3 million bushels in September.

The 2007 soybean crop estimate in October at 2.598 billion bushels- down 21 million bushels form the September estimate. Ending soybean stocks for the 2007-2008 market year are estimated at 215 million bushels- down from 573 million bushes at the end of 2006-2007 market year.

These lower stocks and the need to pull more acres into soybeans in 2008 points to higher prices in 2007-2008 market year than a year earlier. USDA price estimate for the year is $7.85-$8.85 per bushel- up $1.50-$2.50 per bushel from the $6.43 of 2006-2007 market year.

Beef exports in August were up 23.5 percent from 12 months earlier. For January-August beef exports were up 25.4 percent. Beef imports for August were up 1.5 percent, for January-August beef imports were up 3 percent.

Beef exports to Japan were up 546.7 percent, to Canada up 37.6 percent, to Mexico down 12.4 percent, to Caribbean up seven percent, to Taiwan down 3.5 percent and others up 100.7 percent compared to a year earlier for January-August.

Net beef imports as a percent of production for January-August declined from 8.1 percent in 2006 to 7.3 percent this year. This decrease in net imports is at least a part of the reason why live fed cattle demand for January-August showed the robust growth.

Live cattle imports from Mexico for January-August were down 19.3 percent from a year earlier. Live cattle imports for these eight months from Canada were up 21.3 percent. In total, live cattle imports for January-February were down 1.3 percent from 12 months earlier at 1,411, 364 head.

Wholesale beef prices Friday morning showed Choice beef at $144.73 per cwt up $1.25 per cwt from seven days earlier. Select beef at $132.87 per cwt down $1.06 per cwt from a week earlier.

Live slaughter cattle for the week through Thursday at $90.50 per cwt up $1.55 per cwt from seven days earlier. Negotiated weighted average carcass prices through Thursday at $142.18 per cwt up $2.43 per cwt from a week earlier.

Feeder cattle prices at Oklahoma City this week were unevenly steady with seven days earlier. Steer and heifer calves were $2.00-$3.00 per cwt lower than last week.

The range in prices by weight groups for medium and large frame No. one steers were: 401 pounds $133.50 per cwt, 450-500 pounds $120-133.50, 500-600 pounds $112-122 per cwt, 600-700 pound calves $105-114.50 per cwt, 700-800-pound calves $100-109.75 per cwt, 600-700 pound yearlings $115-117 per cwt, 700-800 pounds $100-109.75 per cwt and 800-1,000 pound $102.50-$110.75 per cwt.

Slaughter this week under Federal Inspection was estimated at 674 thousand head, up 4.8 percent from a year earlier.

USDA's October cattle on feed report said the number of cattle on feed at the start of October was down 3.7 percent and placements during September were up 8.9 percent compared to a year earlier. The trade was looking for a 4.9 percent increase in placements. Marketings from feed yards during September were down 3.1 percent, due entirely to one fewer slaughter day this year

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