Farmers Report

July 6th & 7th Brew. Can fruits & veggies. Hunt

July 8th Drawing fruits & veggies. Cut hair to slow growth. Start not to lose weight. Demolition. Marsh wooden floors. Kill plant pest. Pick apples & pears.

July 9th Cut hair to slow groves. Quit smoking. Start not to lose weight. Demolition. washwood in floors. Pick apples & pears. Kill plant pests.

July 10th – 12th James & jellies. Paint. Dig Postholes. Advertise to sell. Ask for a loan. Get married.

 

CROP COMMENTS

by Dr. Aaron Smith
Overview
Corn and wheat were
down; cotton and soybeans
were up for the
week.
With a fixation on
weather, markets did
not anticipate a dramatic
acreage change. The
USDA June Acreage Report
sent corn and soybean
prices in opposite
directions. Nationally, the
Acreage Report indicated
94.096 million acres of
corn planted, 83.505 million
acres of soybeans,
11.087 million acres of
cotton, and 49.628 million
acres of wheat. This is a
year-over-year change of
+6.2% for corn, -4.5% for
soybean, -19.4% for cotton,
and +8.5% for wheat.
Compared to the March
Prospective Plantings Report,
planted acreage was
+2.3% for corn, -4.6% for
soybeans, -1.5% for cotton,
and -0.5% for wheat.
In terms of change in
acreage from the Prospective
Plantings Report
released March 3, corn
added 2.1 million acres
and soybeans declined 4.0
million. Increased corn
planted acres and fewer
soybean acres caused an
immediate response in futures
markets. December
corn dropped 20 cents immediately
after the report
was released and closed
the day down 33 ¾ cents.
November soybeans increased
50 cents immediately
following the report
release and closed
the day up 77 ½ cents.
Above average planting
conditions contributed
to the increased corn
acreage and the reduction
of soybean acreage.
Additionally, concerns
over the record Brazilian
soybean crop could have
caused a shift in acreage
between the two crops.
The futures market price
ratio for November soybeans
divided by December
corn was between 2.2
and 2.46 from March 1 to
June 1 indicating a slight
bias towards corn (for
reference the ratio closed
June 30 at 2.72, indicating
a substantial soybean
bias). The shift in acreage
is a substantial move
regardless of the reasons.
Markets will now wait
for confirmation of NASS
estimates through the
August release of USDA
FSA producer reported
crop acreage and prevented
planting estimates.
In Tennessee, the report
indicated corn planted
acreage of 1 million
acres, soybeans 1.6 million
acres, cotton 310,000
acres and wheat 470,000
acres. Year-over-year this
is an increase of 19%
for corn, a 3% decrease
for soybeans, a 7.5% decrease
for cotton and a
14.6% increase for wheat.
Compared to the March
Prospective Plantings Report
corn planted acres
were up 4.2%, soybeans
were unchanged, cotton
was down 7.5%, and
wheat was unchanged.

LIVESTOCK COMMENTS

by Dr. Andrew P. Griffith
FED CATTLE
Fed cattle traded $1 to
$2 lower compared to last
week on a live basis. Prices
in the South were mainly
$178 to $179 while
dressed prices were mainly
$288 to $290.
The 5-area weighted
average prices thru Thursday
were $180.41 live,
down $2.26 compared
to last week and $288.58
dressed, down $1.27 from
a week ago. A year ago,
prices were $146.10 live
and $233.94 dressed.
Finished cattle prices
are battling the heat,
but they are holding their
ground. The expectation
was and continues to be a
softening of finished cattle
prices moving through
the heat of summer. Prices
have declined from their
highs, but further price
declines are likely from
a seasonal perspective.
The primary supporting
factors of finished cattle
prices include knowing
there are fewer cattle to be
purchased moving into the
foreseeable future and the
strength of beef demand.
These two factors will
keep packers competing
for cattle coming off feed
as it is necessary to keep
lines operating. The feedlot
manager knows packers
need cattle so they will
hold their line for many
months to come.
BEEF CUTOUT: At
midday Friday, the Choice
cutout was $327.89 down
$0.16 from Thursday and
down $6.57 from a week
ago. The Select cutout
was $295.54 down $1.64
from Thursday and down
$5.36 from last week.
The Choice Select spread
was $32.35 compared to
$33.56 a week ago.
The headlines this
week have been beef demand
defying gravity.
This may or may not be
the case. What is certain
is consumers continued
strong demand for high
quality beef. Over the past
decade, consumers have
made it clear that they
prefer and desire Choice
quality beef or a higher
grade. The three primary
grades of beef are Prime,
Choice, and Select. These
are three discrete grades,
but quality grade is actually
a continuous variable in
that there can be considerable
variation in Choice
beef that barely exceeds
Select grade and beef that
is high Choice and knocking
on the door of Prime.
Consumer purchasing
habits produce the data
that says “we want Choice
or higher beef.” Consumer
willingness to pay for beef
in the high price environment
provides further
support for this when considering
the Choice Select
spread. The clear market
signal is consumers want
high quality grade beef.
The question that comes
to mind that may be for
10 or 50 years down the
road is if the market needs
to establish a beef grade
higher than Prime.
OUTLOOK
Based on Tennessee
weekly auction price averages,
steer prices were
$3 to $10 lower this week
compared to last week
while heifer prices were
$5 to $15 lower compared
to the previous week.
Slaughter cow prices were
$2 to $3 higher compared
to last week while slaughter
bull prices were $2 to
$4 higher compared to a
week ago. It would seem
higher temperatures are
slowing interest in lightweight
cattle as prices
took a hit this week. However,
commodity markets
in general seem absolutely
confused, which simply
means those trading
the futures are absolutely
confused. It is reminiscent
of the good ole boy saying
“Hold my beer and watch
this!” Everyone knows it
is rare for anything good
to follow that statement.
Commodity futures traders
have essentially said
this based on how markets
have traded the past
couple of weeks. It makes
one think most traders
are drinking something
stouter than beer. This is
certainly strong language,
but there are currently two
gaps in most feeder cattle
contracts. A gap in futures
trading occurs when a
certain price range has no
trades in it. For instance,
The August feeder cattle
contract gapped lower on
June 21st with the low
price on June 20th being
$232.15 and the high
price for June 21st being
$230.65, which provided
a gap between those two
prices. The market gapped
higher on the 23rd with
the high on the 22nd being
$230.93 and the low on
the 23rd being $231.40.
These trades filled part
of the previous gap, but
it did not fill the entire
gap. The market gapped
higher again on June 27th
between $235.25 and
$235.75. Gaps are typically
filled at some point, but
not always. Given
the volatility in this
market, there is a
strong likelihood
these gaps will be
filled, which means
futures prices are
likely to move
lower. This is not
meant to be a technical
discussion
with a passel of
numbers. It is simply
a discussion to
aid in managing
price risk.
ASK
ANDREW, TN
THINK TANK
How can a person
get started in
the cattle business
or farming in general?
This is a question
that is asked
regularly, and it is
generally accompanied
with the
fact that land is so
expensive. The first
thing to note is that
very few people’s
path into farming
are identical. However,
here are a few
suggestions that
will aid nearly anyone
who wants to
farm. First, studying
and learning is
a must from now
to the end of life.
This learning will
take place through
reading, observation,
attending educational
events,
mentors, and experience.
Second, a person has to
be willing to do the grunt
work. It is difficult today
to find anyone who is willing
to sweat and do grunt
work. Those who are willing
to do such have a front
row seat to farming opportunities.
Third, a person
has to be a servant before
they can take leadership
and become a greater
servant. Everyone thinks
they want to be in a leadership
role, but many people
who think they would
be a good leader have yet
to figure out how to be a
servant. Every leader has
learned how to be a servant.
Please send questions
and comments to
agriff14@utk.edu or send
a letter to Andrew P. Griffith,
University of Tennessee,
P.O. Box 160, 1000
Main Entrance Dr., Spring
Hill, TN 37174.
FRIDAY’S FUTURES
MARKET CLOSING
PRICES
Friday’s closing prices
were as follows: Live/fed
cattle –August $177.18
+2.68; October $179.55
+1.88; June $183.53
+1.85; Feeder cattle –August
$247.58 +5.20; September
$250.83 +5.03;
October $252.53 +4.70;
November $252.65 +4.30;
July corn closed at $5.55
down 27 cents from
Thursday.