Evening Report (VIP) -- August 21, 2013

August 21, 2013 10:16 AM

Ohio corn yield:
171.64 bu. per acre, 110.50 bu. in 2012, 3-year avg. 144.12 bu.
Ohio bean pod count in 3'X3' square: 1,283.61, 1,033.72 in 2012, 3-year avg. 1,162.64
South Dakota corn yield: 161.75 bu. per acre, 74.26 bu. in 2012, 3-year avg. 119.65 bu.
South Dakota pod count in 3'X3' square: 1,016.68, 584.93 in 2012, 3-year avg. 984.62
Indiana corn yield:
167.36 bu. per acre, 113.25 bu. in 2012, 3-year avg. 141.14 bu.
Indiana bean pod count in 3'X3' square: 1,185.14, 1,033.24 in 2012, 3-year avg. 1,136.48
Nebraska corn yield: 154.93 bu. per acre, 131.79 bu. in 2012, 3-year avg. 147.93 bu.
Nebraska pod count in 3'X3' square: 1,138.94, 894.43 in 2012, 3-year avg. 1,162.42


PRELIMINARY DAY 3 MIDWEST CROP TOUR LEADER REPORTS REFLECT MORE VARIABILITY... The eastern leg of the 2013 Pro Farmer Midwest Crop Tour began in Bloomington, Illinois, with crop scouts traveling to Iowa City, Iowa. The western leg began in Nebraska City, Nebraska, with scouts traveling to Spencer, Iowa . Final results for Illinois and western Iowa will be released tonight on www.profarmer.com. Following are preliminary route reports from Tour leaders.

Western Tour Leader and Pro Farmer Editor Chip Flory has sampled in the Iowa counties of Union, Madison (district 8), Adair (district 7), Dallas, (district 5) and Greene (district 4). Corn yields have ranged from 78 bu. per acre (Madison) to 170.4 bu. (Union), with an average of 133.3 bushels. He says yields have steadily declined as he has traveled north. "The variably of the corn crop in the southern districts is unbelievable. We were in one field that had four different stages of development ranging from ear shoots with green silks to corn in soft dough," he says. "The planting issues that people had to deal with earlier this year are having a big impact. But it has improved as we have traveled north. Here in central Iowa we still have some decent yield potential."

Soybean pod counts on Flory's morning route in a 3'x3' square have ranged from 300 (Greene) to 1,700 (Union), with an average of 766. "We've been saying beans could be a bigger story in Iowa than disappointing corn yields for quite some time and by what I've seen today, that is true. Pod counts are low. In Greene county, we are seeing more flowers than pods."

"Drought stress is really starting to show up in Greene and Webster counties," adds Flory. "Some areas around here haven't seen a measurable rain since June 28 and the corn and soybean crops are showing it."

Eastern Tour Leader and Pro Farmer Senior Market Analyst Brian Grete has sampled in the Illinois counties of McLean, Tazewell, Peoria (district 4), Fulton, Knox (district 3) and Henry (district 1). Corn yields have ranged 101.59 bu. per acre (Peoria) to 211.06 bu. (Tazewell), with an average of 157.63 bu. per acre. As expected, Grete says he's seeing more yield variability than on the previous two days of the Tour. "The first couple of samples showed strong yield potential, but we have seen yields generally go down. But certainly more variably within fields. With some of these fields we're hitting the good spots and others we're hitting the bad spots, which shows the variability. Corn-on-corn is showing some stress and pollination issues are also evident with the tough conditions we've seen."

Soybean pod counts in a 3'x3' square have ranged from 367.2 (McLean) to 2,899 (Knox), with an average of 1,220.96. But he says most of his samples are in the 1,150 to 1,200 range. "Again, there is a lot of variably out there. As I've said throughout the eastern Corn Belt so far on this Tour, some of the best looking beans don't have the pods and vice versa. The lower pod counts are coming from the more immature fields, which could add some more pods if timely rains arrive," says Grete.

Eastern Tour Consultant Mark Bernard has sampled in the Illinois counties of Bureau and Henry (district 1), with yields ranging 161 bu. per acre to 197 bushels. He has crossed the border into district 6 of Iowa, where he's sampled 156-bu. and 216-bu.-per-acre fields. "As expected, we're seeing more variability today. But we're seeing huge cracks in the ground today where it once had too much water," he says. "Corn ears are tipped back between 2 to 4 inches. We saw one field that was immature so we decided not to sample it because it will not make grain."

Soybean pod counts in a 3'x3' square have ranged 1,374 to 560 in Illinois and 1,080 and 1,720 in Muscatine county, Iowa. "The pod counts are decent, but it's the luck of the draw as to when the beans were planted. Basically the crop is disease-free and healthy, but it needs a rain. We're also starting to see more two-bean pods today," adds Bernard.


WEEKLY ETHANOL PRODUCTION DECLINES... The Energy Information Administration says for the week ending Aug. 16, ethanol production slipped 13,000 barrels per day (bpd) from the previous week to 844,000 bpd. Ethanol stocks of 16.5 million barrels increased marginally.


FOMC: NO CHANGE ON TAPERING OUTLOOK, FED CONSIDERING REVERSE REPOS FOR EVENTUAL TRANSITION.. The U.S. dollar index surged on the release of the Federal Open Market Committee's (FOMC) minutes from its July 30-31 meeting, in which Fed officials gave no clear signals as to when it will scale back its bond-buying program. "Almost all committee members" agreed that a tapering of its purchase program "was not yet appropriate." The Committee therefore decided to continue its accommodative monetary policy and it reaffirmed its commitment to keep the target federal funds rate at 0 to 0.25% "at least as long as the unemployment rate remains above 6.5%, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2% longer-run goal, and longer-term inflation expectations continue to be well anchored."

The minutes did, however, brief members on the possibility of creating a "fixed-rate, full-allotment overnight reverse repurchase agreement facility as an additional tool for managing money market interest rates." This tool would allow the FOMC to offer a risk-free instrument to market participants, "perhaps complementing the payment of interest on excess reserves held by banks and thereby improving the Committee's ability to keep short-term market rates at levels that it deems appropriate to achieve its macroeconomic objectives." Participants indicated such a tool could be helpful.

Fed officials said data received since the last meeting signaled that real GDP growth was weaker the first half of the year than they had expected, but they still expect real GDP to accelerate in the second half of the year and for it to strengthen in 2014 and 2015. But some officials indicated they are less confident about a near-term pickup in economic growth.

On the jobs front, the minutes noted a "solid" increase in private nonfarm employment and a decline in total government employment. But the minutes noted some concern about an increase and relatively high rate of long-duration unemployment and the share of workers employed part time for economic reasons.


STATS CANADA REVEALS BIG WHEAT CROP POTENTIAL... Statistics Canada today said it expects near-record Canadian all wheat production of 30.562 MMT, which came in above expectations and is up 12.9% from last year.

Pro Farmer Canada Editor Mike Jubinville says the last time all wheat production exceeded 29 MMT was in 1996. The record for all-wheat production (including durum) was set in 1990 when 32.098 MMT was produced. "It is a monster Canadian wheat production estimate, but not entirely a surprise and to a large extent already accepted in the market. But it does add to reports from Europe and Australia of large wheat crops," he says.

Meanwhile, Stats Canada predicts a record-large canola crop of 14.734 MMT, but the figure came in at the lower end of traders' expectations and Jubinville says unless weather is troublesome, the crop should eventually come in closer to 15.5 MMT.

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