Evening Report (VIP) -- December 20, 2012

December 20, 2012 09:37 AM

30- AND 90-DAY FORECASTS FAVORABLE FOR EASTERN CORN BELT... The National Weather Service's Climate Prediction Center (CPC) outlook for January calls for below-normal temps in Minnesota and the Dakotas, with above-normal temps expected in western Texas and the Southwest. Above-normal precip is expected in the Upper Midwest, including northern Iowa, as well as areas of the Southeast and Pacific Northwest, while below-normal precip is expected in the Southwest. Elsewhere, chances are equal for normal, below- or above-normal temps or precip.

According to CPC's 90-day outlook, the area of above-normal temps is expected to cover nearly the entire South, including areas of Kansas southward. Meanwhile, the area of below-normal temps is expected to shrink. Above-normal precip is expected in an area of the Pacific northwest and much of the eastern Corn Belt, with below-normal precip expected in western Kansas, western Oklahoma, western Texas and the Southwest. Across the western Corn Belt, there are equal chances of normal, below- or above-normal temps or precip. See the maps.



CPC: DROUGHT TO PERSIST WEST OF MISSISSIPPI RIVER... The CPC's Seasonal Drought Outlook signals more drought improvement is expected in the eastern Corn Belt, as well as in eastern Iowa, but drought is expected to persist across much of the area already impacted by drought west of the Mississippi River. This includes the entire Plains area, western Iowa, Minnesota and the four-corners states area. Get more details.



LIGHT MIDWEST RAINS FAIL TO IMPROVE DROUGHT... According to the National Drought Monitor, 73.79% of the contiguous U.S. was covered in drought as of Dec. 18, which is a marginal improvement from 73.88% last week. Over the past week, improvement was seen in the eastern U.S., and while parts of the Central Plains and Midwest benefited from light precip -- specifically, Nebraska, Iowa, South Dakota, Minnesota and Wisconsin. But Midwest precip totals were generally less than an inch so this resulted in no change to the region's drought profile.

Dry conditions persisted over much of the South this week, with only east Texas and Louisiana seeing any significant precip. These regions saw a one-category reduction in their drought rating to moderate drought. But in other areas of Texas as well as Oklahoma, drought intensified or expanded. Extreme drought expanded in central Oklahoma and along its border with Texas and a new area of exceptional drought was introduced in central Texas. The drought profile for the Central Plains was little changed from the week prior. Click here to read more details and view the map.



ICE TO ACQUIRE NYSE EURONEXT... IntercontinentalExchange (ICE) and the New York Stock Exchange (NYSE) today announced that ICE will buy the NYSE Euronext in a stock-and-cash transaction for $33.12 per share, or roughly $8.2 billion. ICE plans to sell Euronext, the NYSE's European stock market business, in an initial public offering when the deal is wrapped up -- likely in the second half of 2013, subject to regulatory approvals in Europe and the U.S. as well as shareholder approval.

ICE will maintain dual headquarters in Atlanta and New York and the exchange will open a new midtown Manhattan office in June 2013. The current chairman and CEO of ICE, Jeff Sprecher, will act as CEO of the combined group.



CATTLE ON FEED TO REFLECT TIGHTENING SUPPLIES... Traders look for Friday afternoon's Cattle on Feed Report to show On Feed at 93.4%, Placements at 91.2% and Marketings at 100.2% of year-ago levels. If realized, this would reflect a very current feedlot situation and points to dramatic tightening of supplies in 2013. This would be the sixth straight month that Placements came in lighter than year-ago levels.

Report expectations

Avg. Trade Guess


% of year-ago levels

On Feed











CROP INSURANCE PAYOUTS NEAR $9 BILLION FOR 2012 CROPS... Indemnities for 2012 crops under the federal crop insurance program have reached more than $8.7 billion as of Dec. 17, according to Risk Management Agency (RMA) data. Payouts for 2012-crop corn rose another $500 million to hit $5.2 billion while indemnities on soybeans crossed the $1 billion threshold. That moved the loss ratio for corn to 1.22 and soybeans to 0.47.

Illinois continues to lead on payouts for corn, with $850 million, followed closely by Iowa at $833 million. Nebraska data shows payouts of $625 million while South Dakota registered $579 million and Kansas $535 million. Get more details here.


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