Beef Buzz News
Cattle Market Under Pressure as Corn Plantings Continue to Struggle, Adding to Price WeaknessWed, 12 Jun 2019 11:07:01 CDT
Katelyn McCullock is director of the Livestock Marketing Information Center out of Denver, Colorado. She says one thing the cattle industry needs to pay close attention to right now, is what is happening with the 2019 corn crop which producers have been struggling to get planted this spring due to excessive moisture and persistently wet conditions. McCullock says the final outcome of this crop will have a direct impact on the calf and yearling markets moving forward.
“I think a lot of this is playing into the corn market and what folks are seeing or not yet knowing is what corn acres are going to do and where that yield is going to end up,” she explained. “That’s pushing prices higher across the board and adding to some of the weakness here in the cattle market.”
McCullock says that as feed and corn prices continue to rise, the price of cattle is expected to lower in days ahead. Until the industry is able to get a handle on what this corn crop will actually look like in terms of planted acres and forecasted production, McCullock says there is essentially a guarantee that the uncertainty in the markets will persist. The trade will have its first indication of these numbers in USDA’s June Acreage Report scheduled for publication on the 28th of this month. The data in this report will be farmer-based and will give the industry an opportunity to compare what the crop actually looks like against the prospective plantings data that was released in March. At this point based on the weekly Crop Progress Reports from USDA, it is certain the industry is facing lower than intended planted acres. McCullock says the LMIC has revised its forecast down quite a bit to adjust for this probability.
“That’s going to move forecasts lower for 500 to 600 lb. calves as well as 700 to 800 lb. yearlings for the rest of the year likely,” she said, noting that their current model uses a projected corn price of $4.50/bu. “I will caution you - I think that could move higher in the next couple of weeks depending on what the next couple Mondays show as the crop progresses and how weather holds out.”
Listen to McCullock’s full analysis of the impact that corn plantings are having on cattle market prices, with Radio Oklahoma Ag Network Farm Director Ron Hays, on today’s Beef Buzz.
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