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Email Content: Poultry Industry News, Comments and more by Simon M. Shane



According to the September 13th 2018 WASDE Report #581, 81.8 million acres of corn will be harvested in 2018 to yield 14.83 Billion bushels. The soybean crop is projected to attain 4.69 Billion bushels from 88.9 million acres harvested. The increased production is based on projections of higher yields resulting in larger ending stocks.


Quarterly corn and soybean stocks were estimated by USDA in a release on September 28th to total 2.14 Billion bushels (14.7 percent of the 2017 harvest) and 0.44 Billion bushels (10.0 percent of 2017 harvest) respectively. Of the “old soy crop” 0.10 Billion bushels are held as on-farm storage, up 15 percent from the corresponding period in 2017. Off-farm storage is up 58 percent to 0.34 billion bushels. Disappearance from June to August was 0.78 Billion bushels, up 18 percent from the corresponding period in 2017. This reflects accelerated shipments in anticipation of increased tariffs imposed by China.


The following quotations for the months as indicated were posted by the CME at 14H00 EDT on October 5th together with values for the corresponding months in parentheses indicating a firming of prices.




Corn (cents per bushel)

Dec.’18  368    (356)        

March ‘19 380  (368)

Soybeans (cents per bushel)

Nov. ’18  867  (844)*   

Jan. ’19      880  (858)      

Soybean meal ($ per ton)

Oct.  ‘18 315   (305)*

Jan.  ’19     318  (309)

*values reflect 2017 harvest


Changes in the price of corn, soybeans and soybean meal were:-



Corn:                     Dec. quotation up 12 cents per Bu.             (+3.3 percent)

Soybeans:              Nov. quotation up 23 cents per Bu.             (+2.7 percent)

Soybean Meal:        Oct.  quotation up $10 per ton                   (+3.3 percent)                                


  • For each 10 cent per bushel change in corn:-


The cost of egg production would change by 0.45 cent per dozen


The cost of broiler production would change by 0.25 cent per pound live weight


  • For each $10 per ton change in the price of soybean meal:-


The cost of egg production would change by 0.40 cent per dozen


The cost of broiler production would change by 0.25 cent per pound live weight


Prices in the prices of corn and soybeans this week were up by approximately three percent higher despite there being no prospect of resolution of the trade dispute with China before the 2018 harvest is completed. The impasse continues following non-productive sub-cabinet level discussions in Washington in early September and imposition of additional tariffs on imports mid-month. Last week prices recovered following the mid-September release of the WASD Report documenting higher corn and soybean yields and hence ending stocks


Despite claims by the Administration in August to the contrary the E.U. will not be a solution to tariffs imposed by China. Imports of soybeans will be limited by the inherent reluctance of the trading bloc to import GM product. Five nations in the E.U. have an outright ban on introduction of GM ingredients and any food product marketed in the E.U. would have to be declare GM content on the label. 


Temporary optimism over possible resolution of the trade dispute with China in late September should be viewed against the reality of Southern-hemisphere soybean exports from Brazil, Argentina and their neighbors. High prices for soybeans have raised the prospect of converting sugar cane acreage to soybeans in Brazil increasing potential export volume.


The financial future for row-crop farmers appears bleak despite the promise of $12 billion as “short-term” compensation. Their loss will be a gain for livestock producers who will benefit from lower feed costs. Of course the hog and poultry industries have experienced higher costs for a decade as a result of the RFS, a gift which keeps on giving. The RFS is a boon to Midwest politicians, corn growers and ethanol refiners at the expense of anyone in the U.S. who eats or uses any form of transport.



See the WASDE posting summarizing the September 13th USDA-WASDE Report #581 under the STATISTICS tab documenting price projections and quantities of commodities to be produced, used and exported from the 2018 harvest.


Copyright 2018 Simon M. Shane