LATEST AG NEWS
July 7, 2015
QUICK UPDATE: June 30 is a major date in USA ag statistics
reporting. The report was considered
neutral to the markets, but the markets went a little crazy anyway, with all
the wet weather. Corn and the other
grains took another jump up for a few days.
But the sun is shining all over the USA this week and all the grains are
slipping back to their previous levels (very low) as the crop improves with
warm dry weather
Moral of the
story: “Rain Makes Grain” is what we
have said in the USA for centuries.
History repeats itself.
JBS bought the
pork production unit of Cargill. This is
pretty big news and the market is still digesting the consequences. More to follow.
Oil: The number of rigs drilling for oil in the
USA went UP for the first week since January 2015. This is in response to improved oil
markets. The USA still has the capacity
to BURY the world in oil if the price is right.
With Iran coming back to the market,
oil is going to stay cheap.
Avain flu appears
to be under control for the time being, over 50 million chickens and turkeys
destroyed so far. Some industry analysts
are predicting a second outbreak when the migrating birds head south for the
winter. More to come.
COMMODITIES QUICK
TAKE AWAY
CORN: Prices spiked $0.74 from the lowest level
during the month of June. But this week has seen both corn and soybean prices
retreat every day. With move warm
weather, corn will quickly be back in the $3 per bushel range instead of the
current $4 price.
Soybeans: Will follow corn up and down based on usage
and weather. As the sun comes out,
soybean prices will go down. On July 7,
soybeans are down at least $0.20 across all months.
MILK: Production
across all regions of the USA continues to set records, with no end in sight
for production increases. “CHEAP GRAIN
MAKES CHEAP MILK” is another age old adage we use in the States to predict
markets. The only bright spot is butter
demand, which continues with strong support from the recent FDA (Food and Drug
Administration, the USA Government agency in charge of food safety) decision to
ban trans fats in processed food production.
LIVE CATTLE (for
Slaughter) Prices continue at the same
level as our last report. All months
from August forward are trading at $1.50+ per pound. The fundamentals remain the same: no cattle available. The recent decision by President Obama and
the USDA to allow in some small amounts of fresh beef from Brazil and Argentina
did not have any affect on the market as of yet.
FEEDER CATTLE (300
kg for feeding): Light cattle continue
in short supply. Prices retreated in
response to the spike in grain prices but are climbing again as grain prices
decline. Again, it’s the
fundamentals: no cattle available.
DAIRY CATTLE: These prices continue at the same levels as
the last report. Baby male and female
calves are selling for $600+ across the USA.
Springer heifers (7 months pregnant and more) are staying at about $400
to $500 above the meat price. Supply is
TIGHT but prices are capped by low milk price.
Do you have
questions, comments, complaints, insults or general discussion?
Professor Brown Ag
Report is affiliated with BreedEx USA LLC
