Nearby U.S. corn futures sank to a two-and-a-half year low last week, while soybean futures fell to a 13-month low as prospects for this year’s crop improved and Midwest farmers began clearing out inventories of last year’s crop.
The August soybean contract tumbled more than $1.70 per bushel following three days of heavy mid-week losses, settling at $13.50 per bushel at week’s end.
Corn futures also took a hit with the September contract falling more than 50 cents to $4.92 per bushel at the end of last week.
The market plunge carried over to new-crop prices as cool temperatures eased concerns about drought and hot temperatures damaging crops.
"Corn loves cool weather, particularly when it’s reproducing," Joel Karlin, a grains analyst with Western Milling, a feed company in Goshen, Calif., told Dow Jones Newswires.
The favorable weather outlook for both corn and soybeans helped prompt a wave of farmer selling in both corn and soybeans, analysts said.
Sharp declines in soybean cash-market prices are also due in part to some processors deciding they’ll stop buying supplies until the new harvest, said Jim Riley, an analyst with Linn Group, a Chicago brokerage.
Despite the losses, traders noted that farmers are still several weeks away from harvesting a crop in most areas and weather damage remains a possibility. Riley said that while prices may not rebound much, the downside is also limited.
Red meat production falls
Commercial red meat production in the United States totaled 3.86 billion pounds in June, down 4 percent from the 4.02 billion pounds produced in June 2012, the U.S. Department of Agriculture (USDA) said last week in its Livestock Slaughter report.
Beef production, at 2.17 billion pounds, was 4 percent below the previous year. Cattle slaughter was down 5 percent from June 2012, but the average live weight was up 17 pounds from the previous year, at 1,307 pounds.
Pork production totaled 1.68 billion pounds, down 4 percent from the previous year. Hog slaughter was down 4 percent from June 2012, and the average live weight was unchanged from the previous year at 274 pounds.
Pork supplies drop
The USDA’s monthly Cold Storage report last week showed frozen pork supplies were down 14 percent from the previous month and down 5 percent from last year in June. Stocks of pork bellies were down 22 percent from last month and down 13 percent from last year.
"With pork belly prices rising to all-time record highs, and given the seasonal tendency for bellies to be lower after Sept. 1, belly owners likely saw an opportune time to sell high," analysts Steve Meyer and Len Steiner wrote in their Daily Livestock Report.
Total frozen poultry supplies on June 30 were up 3 percent from the previous month and up 3 percent from a year ago. Total pounds of beef in freezers were down slightly from the previous month but up 3 percent from last year.
Retail meat prices rise
The USDA reported retail pork prices rose 0.6 percent in June compared to a year ago, while beef and veal prices were up 1.4 percent and poultry prices were up 5.5 percent.
Compared to May, pork prices in June were up 0.7 percent, beef and veal were up 0.4 percent and poultry prices were up 1.4 percent.
The USDA lowered its retail pork price rise forecast to a range of zero to 1 percent from an earlier prediction of a 1 percent to 2 percent rise. The USDA now expects beef and veal retail prices to rise 2 percent to 3 percent in 2013, down from its earlier forecast range of 3 percent to 4 percent. The USDA left its poultry retail price rise forecast in a range of 3 percent to 4 percent this year.
Brazil’s beef processing industry is growing increasingly concerned that the misuse of ractopamine may threaten the industry’s export sales, the Valor Economico newspaper reported.
Sale of the additive for use in cattle was temporarily suspended in Brazil in November 2012, but evidence of it was found in beef product shipments from JBS SA and Minerva Foods to Russia in April, causing temporary suspensions levied on Brazilian beef by Russia.