Trade continues to show concern over recent corn demand. We did see a reduction to demand in the latest balance sheets of 60 million bushels, but analysts believe this was not enough. Given recent export performance on corn, these individuals claim corn demand should be reduced another 50 million and possibly 75 million bushels. If correct, this would push corn carryout close to 2 billion bushels.
U.S. milk production remains above year-ago levels, but not by much. December output in the top 23 states was reported at 16.4 billion pounds, up 0.7 percent from December 2014, according to the U.S. Department of Agriculture’s preliminary estimate. Revisions added 26 million pounds to the November estimate, now put at 15.6 billion pounds, up 0.7 percent. The December 50-state output totaled 17.4 billion pounds, up 0.7 percent.
Dairy Market News reports that last week’s snowstorm “expected to move up the coast and add to the region's current wintry conditions will likely force a solid run on milk at retail outlets. The region, in general, is seeing robust demand from bottling facilities, as retail sales are strong.”
Debate is increasing over commodity values and what impact they could have on this year’s acreage. Some analysts have reduced their corn acreage estimates due to low futures and high input costs. While this may be true, the higher yields that corn has can often make up for lower futures and cash bids. In fact, some areas of the United States are predicting more corn acres due to more favorable weather and soil moisture levels.
The U.S. Department of Agriculture raised its 2015 milk production estimate on slightly stronger growth in milk per cow in its latest World Agricultural Supply and Demand Estimates report. Forecast 2016 milk production was reduced from last month. Cow numbers were lowered due to lower expected milk prices and the recent blizzard in Texas and New Mexico. Growth in milk per cow was reduced on lower milk prices.
The U.S. Department of Agriculture unexpectedly reduced the nation’s corn yield in the January balance sheets by nearly 1 bushel per acre. This put the national yield at 168.4 bushels per acre and crop size at 13.6 billion bushels. Given revised usage estimates, this will leave the U.S. with a comfortable 1.8 billion bushels of carryout. The real surprise came to the global number where corn stocks dropped from 211.9 million metric tons in the December estimate to a current 208.9 million metric ton projection.
The first Global Dairy Trade auction of 2016 reversed gears after two previous sessions of gain and the weighted average for all products offered Jan. 5 dropped 1.6 percent, following a 1.9 percent gain Dec. 15 and a 3.6 percent rise in the Dec. 1 event.
Now is the time of the marketing year when farmers start to determine new-crop acres, and as a result more emphasis is placed on input costs and how they may impact acres. In the past few weeks we have seen a slight decrease to the cost of fertilizer across the Corn Belt. While this is good news for producers, the cost of corn seed and some chemicals has increased at the same time.
Santa made a second visit to Chicago, where prices ended 2015 on an up note. Block Cheddar finished the New Year holiday-shortened week at $1.5075 per pound, up 5¾ cents on the day and up 10¼ cents on the week but 6¼ cents below a year ago. Cheddar barrels end the year at $1.53, up a nickel on the day, up a dime on the week, a penny below a year ago and an atypical 2¼ cents above the blocks. Nine cars of each traded hands on the week.