Cattle Plunge on Human NWS Case Topping the Market? Corn Up on Pro Farmer Yield Cut

Mon, 25 Aug 2025 15:09:55 GMT

Cattle futures were sharply lower Monday, hogs highs and grains mixed after a higher start.

First Human Case of NWS in U.S.

Brad Kooima of Kooima Kooima Varilek says live and feeder cattle futures gapped lower on the opening after a human case of New World screwworm (NWS) was announced over the weekend.

It was found in a resident of Maryland, who had traveled from El Salvador and that person has received treatment for the infection.

USDA has rolled out a five-part strategy to eradicate screwworms, including building a sterile fly production facility and releasing lab-bred male flies that can’t reproduce into outbreak zones. It’s the first human case in decades on U. S. soil.

Kooima says the market actually handled the news better than he thought it would and he was expecting a lower opening in cattle anyway with the bearish placements figure in the Cattle on Feed Report.

USDA Cattle on Feed Report Bearish

USDA’s August Cattle on Feed Report was slightly bearish as placements came in at 94% of a year ago but the average trade guess was 91%.

He says this is an indication that cattle producers are backing up cattle.

The state-by-state breakouts showed Texas at only 75%, while Iowa was at 118% which also shows the continued influence of the Southern border being closed to Mexican cattle imports.

However, the on feed numbers were at 98% of a year ago, which was as expected and confirms the continued trend of tight supplies.

Cash Convergence

Kooima says cash trade was sloppy in the North last week but higher in the South at mostly $240 live, which was up $5 from the previous week.

He says the cash is starting to converge with futures and the South is starting to converge with the North.

Is the High In the Cattle Market?

The bearish technical action off new contract and record highs on Friday may be signaling a top according to Kooima.

He admits there have been several key reversals the cattle market has negated but he thinks this one might stick.

The reason is because the market is overbought, but also the seasonals are usually weaker for the cattle market in September as the market moves past the Labor Day beef demand peak.

Hog Futures Try to Narrow Discount

Lean hog futures were higher early Monday on spread unwinding with cattle but also extending gains after higher weekly closes.

The October contract is holding a sizable discount to the cash and that may be somewhat attractive to fund traders.

However, Kooima says the cash trade is weakening and it is more likely the futures will fall towards the futures to make up that gap.

Corn Extends Gains

Corn futures were high on Monday extending gains after a higher weekly close and with the tailwind of Pro Farmer cutting yield estimates by 6 bu. below USDA at 182.7 bu. per acre.

Kooima says that confirmation is enough to keep the market in recovery mode, especially with strong exports.

Soybeans See Profit Taking

Soybeans were higher on the opening but ran into chart resistance and saw some profit taking.

The market has rallied nearly 75 cents off the lows and needs additional bullish news to get through these chart areas.

Kooima says exports have been decent despite China being absent from the market, but it might take China purchases to keep the rally going.

Demand to Set Another Record

Fri, 13 Nov 2020 01:50:13 GMT

In less than two months, as Russia burned literally and figuratively in its worst drought in history, we transitioned from an ample world supply situation to one in which supply and demand are much more in balance. “The U.S. is an island of supply in a world that needs supplies,” says Dan Basse of AgResource. “With crops being trimmed worldwide, we will be the reliable supplier.”

Domestic demand for corn promises to be firm, pegged at 50 million bushels above this past year and carryover equaling less than 10% of use. The soybean outlook isn’t quite as rosy, with ending stocks climbing from this past year and equal to 11% of demand. However, “soybeans and meal could be the bigger story in the long term,” says Jerry Gulke of the Gulke Group. “USDA has China’s bean imports at 49.5 million metric tons [mmt]. Some say the total could be as much as 58 to 60 mmt. They’d have to import roughly a million tons a week.”

Corn ethanol use, pegged at 4.7 billion bushels, is up 200 million bushels, just about offsetting feed use, which fell 175 million bushels. Total grain-consuming animal units are up a touch from 2009. Both dairy and beef cattle are down for the third year in a row, squeezed by red ink. Hogs, on the other hand, are up, and poultry is up modestly.

The July 1 cattle and calves inventory fell 1% from this past year. With the smallest calf crop in 50 years, the question is, “When will herd rebuilding start?” Traditionally, the cycle includes six to eight years of increasing numbers followed by three or four years of liquidation.

Cattle ranchers in the southern Great Plains lost about $34 on every breeding cow they owned this past year, following losses of $18 a head in 2008, according to Jim Robb, director of the Livestock Marketing Information Center in Denver. “There are some encouraging signs this year,” says Tim Petry, livestock economist at North Dakota State University. “Most regions have the best pasture and range conditions in the past decade. Export demand for U.S. beef is improving, with sales up 25% compared with 2009. Cow, bull and feeder prices are better, so it’s possible we’ll see herd growth begin.”

The recent corn price run-up will dampen expansion in hog breeding. Live hog prices surpassed $60 per cwt. this past spring, providing profits of $30 per head. But, based on a survey of 19 economists, pork production will be up only 1% this year, says Ron Plain, University of Missouri livestock economist. Through 2011, they predict quarterly live hog prices at $52.57 to $57.83.

USDA reports the broiler breeding flock is up nearly 2% this summer. Given the continued soft economy, any rapid increase is unlikely.

Exports. Export sales of new-crop soybeans are 35% ahead of 2009’s strong pace, Gulke says. “And last year, we knew South America didn’t have a big crop.”

With USDA showing a net increase of 450 million bushels of corn, wheat and soybeans headed outside the country for the 2010 crop, our ports may be jammed as sales on the books are loaded and shipped out. “Big commercial elevators tell me their loading capacity is booked through December,” Basse says. “Everything needs to move smoothly to avoid backlogs.”

Jay O’Neil, senior economist at the International Grains Program at Kansas State University, says it will get done; the question is at what cost. “Heavy fall sales aren’t particularly unusual,” he says.

“If ports are congested, money will talk. Loading facilities can add shifts and work weekends. Some loads can be shifted to a different port. I haven’t witnessed anyone turn away business.”

Outside Market Factors. There are economic headwinds that may have a dampening effect on demand, however. “We saw major sell signals in equities,” Gulke says. After some improvement, unemployment in July dipped to 9.5%. That doesn’t spell a return to luxury dining.

A final question mark is where crude oil is headed, given the relationship between oil and corn. The Energy Information Administration (EIA) expects world oil prices to slowly rise as demand increases because of projected global economic growth, slower growth in non-OPEC oil supply and continued production restraint by OPEC members. A gradual reduction in global oil inventories is expected to lend support to firming oil prices.

EIA projects that the West Texas Intermediate spot price, which ended July at more than $78 per barrel, will average $81per barrel in the fourth quarter and $84 per barrel in 2011. This could lend support to corn prices. —Linda H. Smith

Top Producer, September 2010

Pro Farmer Crop Tour News

Cattle Plunge on Human NWS Case Topping the Market? Corn Up on Pro Farmer Yield Cut

Demand to Set Another Record