Thursday, March 14, 2013

Animal feed costs could drop as grain prices forecast lower


    Poultry and livestock producers should see some relief from high animal feed costs, as the price of corn, soybeans, wheat and sorghum have all been forecast lower, according to the United States Department of Agriculture’s World Agricultural Supply and Demand Estimates report, released on March 8.
    Corn prices are projected 20 cents a bushel lower, with a range of $6.75 to $7.45. Part of that drop in price is based off of the emerging crop in South America and South Africa. The USDA’s World Agricultural Production report, also released on March 8, reflected Argentina’s corn production 26 percent above last year’s crop with yields improved by 30 percent. The same report projected South African corn production to be up 5 percent from last year.
    Projected U.S. corn ending stocks are unchanged this month as an increase in imports and lower exports support higher expected feed and residual disappearance. Imports are raised 25 million bushels, reflecting the strong pace of shipment reported through January. Meanwhile, exports are lowered 75 million bushels, based on the slow pace of sales and shipments, as well as the strong expected competition from South American corn and competitively priced feed quality wheat.
    The projected season-average price range for soybeans is narrowed 25 cents, with a range of $13.80 to $14.80 per bushel. Soybean meal prices are forecast at $425 to $445 per short ton, which is down $10.
    U.S. soybean supply and use projections are unchanged, leaving ending stocks at 125 million bushels. Although soybean export commitments through February exceeded last year’s pace, exports are expected to decline in upcoming months due to increased competition from South America.
    Sorghum prices are forecast 20 cents a bushel lower, with a range of $6.70 to $7.40. Exports are projected 10 million bushels higher, based on the strong pace of sales and shipments.
    Wheat, meanwhile, is forecast at 10 cents a bushel lower with a range of $7.65 to $7.95. Key to the drop is increased supplies, as global supplies are raised 1.8 million tons with higher production. India’s production alone is increased at 1 million tons.

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