Markets in 60 seconds: 8/19/13

Markets in 60 seconds: 8/19/13

Prevented planting: While grain traders cheered the Farm Service Agency's prevented planting data last week as bullish for the market, livestock interests looked upon the information a little less favorably. "The chicken and pork industries have been positioning themselves to grow if the feed is cheaper for some time. It is clear to see that these data confirm concerns that actual planted and harvested corn acres will fall significantly short of the August ('World Agricultural Supply & Demand Estimates') figures," economists Steve Meyer and Len Steiner explained in the "Daily Livestock Report." In other words, this year's crops are going to be bigger than last year's, but 14 billion bu. of corn is no longer in the cards. Meyer and Steiner said feeders should pay close attention to frost warnings in early to mid-September as that could have a significant impact on final production figures. "One has to be concerned about feed ingredient prices not falling by as much as we once envisioned," they concluded.

Ethanol rebounds: After taking a brief dip in late July, weekly ethanol production continued to accelerate in August. Production averaged 857,000 barrels per day for the week ending Aug. 9, with a four-week average of 849,000 barrels per day. Stocks continue to hover near 16.5 million barrels, close to the smallest levels seen in the past few years. Imports of ethanol also were down in the most recent week.

Summer egg prices: According to data from Urner Barry, egg prices over the past three months have trended lower than last year after two quarters of outpacing 2012 prices. June prices average $1.062/doz. for Midwest large eggs, compared with $1.090 last year. July prices averaged $1.21 versus $1.30 last year, and August egg prices are running at $1.180, compared with $1.417 in 2012. June and July did run ahead of the four-year average price, however.

Questioning PEDV: The National Animal Health Laboratory Network released data last week on porcine epidemic diarrhea virus (PEDV) cases through Aug. 4, reporting 27 new cases for the week. Significantly fewer new PEDV cases were reported in July — which averaged between 25 and 30 cases per week — compared to the 44-55 cases per week reported in May and June. As economists (and producers) learn more about PEDV, the potential market impact of the disease is becoming a little muddier. Steve Meyer and Len Steiner noted that previous assumptions of five weeks of lost pigs was too high, and loss estimates now range from 60,000 to 100,000 head. "It is important to note that these death losses — however large they are — will not impact slaughter until mid-December," they wrote on Aug. 15. "We are now only two weeks away from the next (U.S. Department of Agriculture) survey of hogs and pigs numbers and six weeks away from the September 'Hogs & Pigs' report. This survey will cover a period in which the disease spread dramatically." That report should reflect the spread of the disease in USDA's pig crop estimates and under-50 lb. pig inventory.

Hen inventory: According to USDA's latest "Chicken & Egg" report, the monthly hen inventory is running well ahead of last year and well ahead of the 10-year average. July's inventory totaled 288.0 million hens, compared with 281.1 million last year and 279.7 million on average. Hen numbers began increasing steadily from August through December last year and reached a peak of 292.7 million in December. Inventories have tracked between 288 million and 292 million head since then but have been on a slightly downward trend since April, reflecting typical seasonal tendencies.

Volume:85 Issue:33

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