Evening Report (VIP) -- August 23, 2013

August 23, 2013 10:16 AM
 

PRO FARMER MIDWEST CROP TOUR STATE RESULTS...
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 pods 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
Illinois corn yield: 170.48 bu. per acre, 121.6 bu. in 2012, 3-year avg. 148.04 bu.
Illinois pod count in 3'X3' square: 1,115.97, 944.05 in 2012, 3-year avg. 1,149.47
Iowa corn yield: 171.94 bu. per acre, 137.27 bu. in 2012, 3-year avg. 157.09 bu.
Iowa pod count in 3'X3' square: 927.30, 999.80 in 2012, 3-year avg. 1,189.74
Minnesota corn yield: 181.09 bu. per acre, 156.19 bu. in 2012, 3-year avg. 172.53 bu.
Minnesota pod count in 3'X3' square: 869.42, 934.35 in 2012, 3-year avg. 1,099.44

 

PRO FARMER CROP ESTIMATES... It's important that we explain the Pro Farmer U.S. corn and soybean crop estimates are not Pro Farmer Midwest Crop Tour estimates. Of course the estimates are based on Tour data, as well as observations from non-Tour states.

Pro Farmer pegs 2013 U.S. corn crop at 13.46 billion bu.; Average yield of 154.1 bu. per acre: +/- 1% = 13.595 billion bu. to 13.325 billion bu.; 155.6 bu. to 152.6 bu. per acre

Pro Farmer pegs 2013 U.S. soybean crop at 3.158 billion bu.; Average yield of 41.8 bu. per acre: +/- 2% = 3.221 billion bu. to 3.095 billion bu.; 42.6 bu. to 41.0 bu. per acre

Note: These estimates are based on assumptions for normal weather through September, which would be about perfect for the crops. We took 1.8 million off of harvested acres for corn and 800,000 harvested acres off of soybeans to reflect the Prevented Plant acres in Iowa and Minnesota. It’s dicey estimating crops in a year with so many challenges. We have two opportunities to be wrong with our estimates — we’ve made adjustments to planted and harvested acreage and have issued state-by-state yield pegs.

CORN

Ohio: 168 bu. per acre. No question, Ohio was the best looking corn crop on the eastern leg. The question is how much of the yield potential can be maintained into harvest. The crop has more downside risk than upside potential due to dry conditions and the late maturity of the crop.

Indiana: 163 bu. per acre. Scouts were impressed by the crop, but to a lesser extent than with Ohio. It needs time and moisture to realize its potential.

Illinois: 164 bu. per acre. One of the "shockers" of this Tour was how dry Illinois soils are. Soil moisture levels are down from 2012. The degree of variability of the crop from field to field and within the fields was also surprising.

Iowa: 163 bu. per acre. Iowa is a prime example of why perspective must be applied to raw Crop Tour data. Samples indicated Iowa has the potential for big yields, but problems with late maturity and major uniformity issues means we don’t expect this to be realized.

Minnesota: 163 bu. per acre. Maturity was an even bigger problem with the Minnesota crop. Samples from just pollinated fields showed 200-plus-bu. potential, but these crops very likely will not make grain. Nitrogen deficiency is another major issue for this crop.

Nebraska: 161 bu. per acre. Dryland corn will support yields in Nebraska this year. But irrigated corn is not overly impressive.

South Dakota: 142 bu. per acre. After finding pitiful yields in the state in 2012, it was refreshing to see impressive yield potential this year. But whether the crop reaches this potential depends on September weather.

SOYBEANS

Ohio: 48 bu. per acre. The state is expected to produce a good but not a great crop, though pod abortion is a risk if late-season rains fail to develop and temps heat up. The maturity of the crop was more advanced than many other states and beans were plump.

Indiana: 48 bu. per acre. A few instances of sudden death syndrome (SDS) were noted in the state, but as was the case for most of the Tour, the crop was relatively free of insect and disease pressure.

Illinois: 46 bu. per acre. There was extreme variability in the Illinois crop. Late planting, heavy rains and ponding caused uneveness.

Iowa: 43 bu. per acre. Pod clusters were notably lacking on Iowa bean plants, with many plants having just two to three pods per node. Coupled with late planting dates in north-central and northeast Iowa, the potential for more than that simply isn’t there.

Minnesota: 40 bu. per acre. Everything we said about the Iowa crop applies to Minnesota... plus aphids and even later planting dates.

Nebraska:
46 bu. per acre. Growers in the state know how to grow beans and can produce crops in excess of 50 bu. per acre. Limiting the upside on the state’s bean crop was that irrigated beans didn’t blow the top off yields, as around half the crop was mudded in.

South Dakota: 36 bu. per acre. Immaturity is an issue with this bean crop. Scouts saw a lot of flat pods at the bottom node and the top cluster seemed to be lacking. This signals the crop must make it through September without a frost for a good yield.

 

FORECAST HEATS UP NEXT WEEK... Grain traders reacted today to forecasts that call for a building ridge of high pressure that will further increase temps across the Corn Belt and block out needed moisture. Meteorologist Gail Martell of MartellCropProjections.com says there is potential for "ridge-rider" storms on the northern edge of the ridge, which includes rain potential for North Dakota, northern Minnesota and upper Wisconsin. But she says rains will remain north of the heart of corn and soybean country.

 

CATTLE ON FEED BULLISH... This afternoon's Cattle on Feed Report is getting a bullish read, as On Feed (94%) and Placements (90%) came in below expectations while Marketings (105% of year-ago) were higher than expected. The report reflects a shrinking supply of marketable animals well into 2014 and is especially supportive for deferred futures. Depending on how the cash market performs this afternoon, cattle futures should open higher Monday based on the report data.

COF Report

USDA

Average

Range

% of year-ago levels

On Feed

94
95.8

94.4-98.2

Placements

90

97.5

92.9-111.6

Marketings

105

104.4

102.5-106.1

A weight breakdown of calves placed into feedlots last month reveals calves under 600 lbs. down 22%, 600-699 pounders down 15%, 700-799 pounders down 3% and calves 800 pounds and over were down 4% from year-ago levels.

 

FARM BILL: WHAT'S LIKELY... Washington Consultant Jim Wiesemeyer provides the following update on what's likely ahead for the farm bill.

  • Timeline: Congressional leaders want a final bill by Sept. 30.
  • Conference: If the House officially announces conferees, that signals a deal is at hand. If not, no deal. Also, House Ag Chairman Frank Lucas (R-Okla.) will chair a farm bill conference.
  • Final outcome still murky due to several contentious issues led by food stamp funding and farmer safety net differences.
  • Food stamps: Senate farm bill would cut funding $4 billion. House has yet to act as it will attempt to vote on a separate bill after lawmakers return Sept. 9 and that measure could total $40 billion in cuts. This wide difference will be very difficult to reconcile.
  • If House fails to clear separate food stamp funding bill, look to congressional leaders for compromise.
  • Possible linkage to must-pass bills. A new farm bill could be part of late-2013 action on either a continuing resolution to fund the government in Fiscal Year 2014, which begins Oct. 1, or as part of fall debt limit hike talks. Some of the farm bill savings could be used as "pay-fors" for changing sequestration (across-the-board) budget cuts that are still in place and disliked by many lawmakers and President Obama.
  • Another 2008 Farm Bill extension cannot be ruled out. In fact, the majority of observers think this is likely, but GOP and Democratic leaders want a new farm bill and at least the will is there to complete a new farm bill.
  • Any farm bill extension will itself face hurdles as some conservative senators would insist on major cuts if not elimination of direct payments. If that occurs, Rep. Collin Peterson (D-Minn.), ranking member on the House Ag Committee, says that's like a new farm bill and thus he and other Democrats would not support it.
  • Any farm bill extension could be longer than one year as congressional leaders do not want to deal with this issue in an election year.

For more details about what features are likely for any new farm bill, click here.

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