Evening Report -- July 26, 2012

July 26, 2012 10:24 AM
 

NWS 6-10 DAY FORECAST SHOWS LITTLE CHANGE FROM YESTERDAY... The National Weather Service (NWS) forecast for Aug. 1-5 indicates above-normal temps will continue across most of the country. But Wisconsin, northeastern Illinois, most of Indiana and Ohio are expected to see normal temps during the period. The precip outlook calls for above-normal rains across all of the eastern Corn Belt except southwestern Illinois. East-central and northeastern Iowa, all but far southwestern Minnesota and far eastern North Dakota are also expected to see above-normal precip. Normal precip is forecast across the rest of Iowa and most of the Dakotas. Below-normal precip is likely across most of Nebraska and Kansas. Click here to view the related maps.

 

MIDWEST DROUGHT FOOTPRINT CONTINUES TO EXPAND... The U.S. Drought Monitor shows some form of drought encompasses nearly all of the contiguous US, with areas of "extreme" to "exceptional" drought expanding in most Corn Belt states. The Drought Monitor says recent precip in parts of the Dakotas, Upper Mississippi Valley and the southern Great Lakes, "was enough to slightly trim a few of the drought areas, but the 2-plus inches from southern Wisconsin to northern Indiana were able to only maintain status quo. Most other areas were not as lucky." Crop, pasture and rangeland conditions worsened in areas that missed out on rains and baked in triple-digit heat, causing abnormally dry to exceptional drought conditions to spread and intensify across the Midwest and Plains. Click here to view the maps and read more details.

 

IGC SLASHES US CORN PRODUCTION PEG... The International Grains Council (IGC) today slashed its 2012-13 global corn crop projection by 53 million metric tons (MMT) to 864 MMT. A 50-MMT cut to US production to 300 MMT due to persistent heat and dryness accounted for the majority of this cut. Global corn carryover in 2012-13 is expected to be the lowest in six years, while world demand is expected to rise 1% for the year. IGC left its world wheat output forecast for 2012-13 unchanged at 665 MMT, which is 31 MMT below last year's tally.

IGC reduced its 2012-13 total grain harvest projection by 36 MMT to 1.810 billion metric tons. Global grain ending stocks for 2012-13 are now pegged at 337 MMT, which represents a 29-MMT decline year-over-year.

Global soybean production, on the other hand, is expected to rebound by 9% in 2012-13, despite a 8.3-MMT reduction in US production to 79 MMT. Increased South American bean production is expected to more than make up for the smaller US soybean crop.

 

FINAL HRS TOUR RESULTS... After sampling fields throughout North Dakota, along with some areas of northern South Dakota and western Minnesota, scouts on the annual Wheat Quality Council HRS tour found an average yield of 44.9 bu. per acre. That's up from a tour average of 41.5 bu. per acre last year and a five-year tour average of 41.7 bu. per acre. Samples from durum wheat fields averaged 42.4 bu. per acre compared with 31.8 bu. per acre last year and on average. In addition to strong yields, scouts expect a high-quality crop. "The only thing that can hurt this crop is a hail storm," says Ben Handcock, executive vice president of the Wheat Quality Council.

Scouts say the crop's advanced maturity allowed it to avoid most of the ill effects of the drought conditions, which have been spreading northwesterly through the country's midsection.

 

CHANGING DYNAMICS IN BRAZIL'S CORN INDUSTRY... South American crop consultant Dr. Michael Cordonnier in a website post today says the deteriorating state of the US corn crop has changed the dynamics of Brazil's corn industry. He says rising corn prices in the US have increased Brazilian corn exports so much so that Brazil is expected to surpass the 2009-10 corn export record of 10.7 million metric tons (MMT). "How much it surpasses the old record will only be limited by logistical problems at the Brazilian ports," Dr. Cordonnier writes. Some estimate Brazil will export as much as 15 MMT of corn, but as only 2 MMT have been exported thus far, Dr. Cordonnier says this is a lofty target.

Another changing dynamic due to high corn prices and drought in Brazil the past growing season is that its government "has initiated programs to move surplus corn from central Brazil to corn deficit regions in southern Brazil where much of the livestock industry is concentrated," according to Dr. Cordonnier. He notes Brazil's government will have to compete with exporters for available corn supplies. The increased cost of corn is also expected to decrease the number of cattle on feed in Mato Grosso, contrary to the trend the past several years.

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