Evening Report (VIP) -- April 8, 2013

April 8, 2013 07:00 AM
 

WINTER WHEAT CONDITION IMPROVES MARGINALLY... USDA reports 5% of the winter wheat crop is in "excellent" condition, which is unchanged from last week. But 31% of the crop is now rated "good," which is a two-percentage-point improvement from last week. USDA rates 30% of the crop in "poor" to "very poor" shape, which is unchanged.

The National Weather Service forecast for April 14-18 calls for below-normal precip for the HRW Wheat Belt, which doesn't bode well for near-term crop improvement. There is some rain in the forecast for the region this week, but a return to drier conditions will limit the crop's ability to improve -- and there's a risk of freeze damage in some areas.

Winter Wheat

very poor

poor

fair

good

excellent

This week

12

18

34

31

5

Last week

10

20

36

29

5

Year-ago

3

7

29

47

14

 

 

HIGHER CARRYOVERS EXPECTED IN APRIL S&D REPORT... After the March 28 Quarterly Grain Stocks Report showed corn, soybean and wheat stocks higher than traders expected, they look for USDA to raise its 2012-13 carryover projections. The April 10 World Agricultural Supply and Demand Estimates (WASDE) will be released at 11:00 a.m. CT.

Traders look for the WASDE report to show corn carryover at 824 million bu., with soybean carryover at 137 million bu. and wheat carryover at 731 million bushels. Traders look for global corn carryover to be up around 3 MMT from last month, while world wheat carryover is projection to be up around 400,000 MT and global soybean carryover is expected to tighten by around 100,000 MT.

Traders look for the WASDE report to show Argentine corn and soybean production, as well as the Brazilian bean crop estimate to be down slightly from last month. But the report is expected to reflect a larger Brazilian corn crop.

2012-13 carryover

Avg.

Range

USDA March

2011-12

in billion bushels

Corn

0.824

0.625-0.925

0.632

0.989

Soybeans

0.137

0.107-0.160

0.125

0.169

Wheat

0.731

0.700-0.776

0.716

0.743

 

 

MIDWEST SOIL TEMPS WARMING, BUT... Meteorologist Gail Martell of MartellCropProjections.com says warmer conditions this weekend and today are helping to warm soils across the Midwest to reflect a weakening of the Arctic Oscillation (AO), but another shot of cold weather is in the forecast for later in the week. A more active precip pattern is also in the forecast for the Corn Belt this week, which is beneficial for dry western Corn Belt soils. But the combination of a a wet forecast and a return to cooler conditions doesn't bode well for a mid-April start to planting. Click here for related maps.

 

 

CME GROUP PLANS LAUNCH OF RIN CONTRACTS... The CME Group is planning to launch a suite of contracts to trade renewable identification numbers (RINs) in May. The contracts, sources say, will help the industry mange risk amid recent price volatility in RINs. A CME Group spokesman says ethanol RINs and biodiesel RINs will be among the contracts launched by the exchange.

 

 

AFBF ISSUES A FARM BILL PROPOSAL... The American Farm Bureau Federation (AFBF) sent a farm bill proposal to Washington today that offers a wide range of farmers a choice of safety net tools and saves $23 billion over 10 years relative to continuing the current proposal. AFBF highlights the following features of the proposal:

  • It offers farmers a choice of program options.
  • It protects and strengthens the federal crop insurance program and does not reduce its funding.
  • It provides a commodity title that works to encourage farmers to follow market signals rather than making planting decisions in anticipation of government payments.
  • It refrains from basing any program on cost of production.
  • It ensures equity across program commodities.

Specifically, the AFBF proposal calls for a three-legged safety net for program crop farmers that includes: a stacked income protection plan commonly called STAX; an improved crop insurance program; and target prices and marketing loans. Under the proposal, all program crop farmers would have access to the marketing loan and crop insurance provisions and they would then select between a target price program and STAX to round out their safety net options. The proposal also supports extending the provision of STAX programs to five specialty crops, and it noted that eventually it would like to cover all crops under a STAX program. Click here for more.

 

 

SENATE IMMIGRATION REFORM BILL MAY BE INTRODUCED THIS WEEK... A bipartisan group of eight senators is "on track" to introduce comprehensive immigration legislation by the end of this week, Senator Chuck Schumer (D-N.Y.) said Sunday on CBS' "Face the Nation." However, a new visa program for agricultural workers is one of the major outstanding issues on the Senate immigration proposal. Groups representing farm workers and growers (a coalition of growers, including the AFBF with the United Farm Workers) are currently arguing over wages and the number of visas in the program. The coalition members worked through the weekend toward a resolution. Whether they have a plan by early this week could dictate if the Senate group can actually finish a bill this week.

Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) has promised immediate but thorough consideration of the legislation in committee once it is ready. GOP senators want extensive hearings, but Leahy said time is of the essence if the bill is to be passed this summer.

In the House, lawmakers working on an immigration bill are farther behind. They will likely meet this week to discuss the status of immigration legislation after recent staff-level talks.

 

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