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Recent rain has US grain prices on the up
02 July 2015
Recent rain in key cropping areas of the US has resulted in an uptick in prices for corn, soybeans and wheat in the last couple of weeks. There was some disruption to corn and soybean planting, and wheat harvest. It may have also affected the quality of the wheat being harvested.
The USDA Acreage and Grain Stocks reports, released overnight, show lower than expected stocks of corn and soybeans, as at 1 June, and a larger than expected stock of wheat (Daily Livestock Report – 1 July 2015). The acres planted to each of these crops had the same result relative to expectations, and these figures have also contributed to higher corn and soybean futures prices.
Normally if grain prices increase, livestock prices will go down in response, as they are the two key inputs in most US meat production systems. This is likely to happen in the pig and poultry sectors, but the impact could be less for the cattle industry, with low numbers of cattle going onto feed already, meaning feedlots will still need to pay high prices to keep yards full.
