Evening Report (VIP) -- December 24, 2013

December 24, 2013 07:10 AM

MERRY CHRISTMAS FROM PRO FARMER... The spirit of giving shines brightest during the Christmas season as we gather to share gifts with family and friends. It's also a time to provide food, clothing and money to those less fortunate than us. But the real joy of the season is celebrating the birth of our Savior, Jesus Christ. Everyone at Pro Farmer wishes you and your family a joyous and blessed Christmas!

Markets and government offices are closed Wednesday for Christmas. Therefore, there will be no Pro Farmer updates tomorrow. Grain markets resume trading at 8:30 a.m. CT on Thursday, while livestock markets reopen at 9:05 a.m. CT. We'll be back bright and early with "First Thing Today" on Dec. 26 to cover happenings during the Christmas break.



ARGENTINE HEAT WAVE STRESSES CROPS... Argentine growing conditions were hot and dry last week, increasing stress on corn and soybeans and possibly reflecting a weakening El Nino effect, according to Meteorologist Gail Martell of MartellCropProjections.com. "Just 15% of the grain belt received significant rainfall in widely scattered showers, while a heat wave produced temperatures 10°F to 13°F above average over the past week," Martell explains.

Hot temps continued to start this week, she says, as temperatures topped 100°F in western Buenos Aires to La Pampa on Sunday; elsewhere in the grain belt, temps in the mid 90°s F prevailed. While rainfall the first half of December was generous in the three main grain provinces Buenos Aires, Cordoba and Santa Fe, Martell notes that the extreme heat has also increased evaporation, sapping field moisture.

Looking ahead, Martell says extreme heat should last through Christmas day, but at that time a short-wave disturbance could bring clouds and widely scattered showers to the province of Buenos Aires. Martell says there is also a 60% to 70% chance for showers on Friday. "The GFS (weather model) predicts variable rains in the northern two farm provinces of Cordoba and Santa Fe. Some areas may receive 1.5 inches of rain in scattered strong thunderstorms," Martell elaborates. But she expects very hot temperatures to resume by the weekend. Get more details and maps.


DRYNESS IN SOUTH BRAZIL, TOO... Dry condition also affecting Rio Grande do Sul, Brazil's southernmost farm state, Martell says. "Emerging drought in southern Brazil has expanded into Parana, Brazil's second leading corn and soybean state," she adds. The dry weather conditions recently in southern South America are just the opposite of what would be expected with an El Nino signal, according to Martell. The forecast remains hot and dry in southern South America, suggesting the El Nino effect may continue to fade, she says. "The most productive grain harvests have occurred when El Nino is in effect," Martell explains.



'EXPRESS LINE' FOR SOME VESSELS AT PORT OF PARANAGUA THIS YEAR... Authorities at the Port of Parangua in southern Brazil are instituting a new program called Rule 126, starting on Jan. 2, 2014, that is intended to speed up loadings and reduce congestion at the port. According to Pro Farmer South American Consultant Dr. Michael Cordonnier, the "express line" rule gives loading priority to vessels that will load at least 18,000 MT from any one exporter and from no more than three grain terminals at the port. Dr. Cordonnier says the port will also change how vessels can enter the loading lineup. Under the new rule, a vessel must confirm its total cargo and how much it will load from each exporter before it can enter the loading lineup. The goal is to stop vessels from lining up before cargoes are negotiated. Now the question is how strictly the new rules will be enforced.



USDA LOWERS FORECAST FOR 2013 FOOD PRICE INCREASE... U.S. food price inflation for 2013 is now forecast at 1.25% to 1.75%, down from the prior outlook for prices to rise 1.5% to 2.5%, according to USDA’s Economic Research Service (ERS). It expects food-at-home prices to increase 0.75% to 1.25%. "This means that prices are likely to increase less than they did in 2012, and that annual inflation should be lower than the 20-year historical average of 2.8%," ERS details. The increase in food-at-home prices is now on track to be the fourth-lowest annual increase since at least 1980, according to the agency.

As for 2014, ERS is maintaining its forecast for a 2.5% to 3.5% increase in all food prices, a more normal level of increase from a historical perspective "Inflationary pressures are expected to be moderate, given the outlook for commodity prices, animal inventories, and ongoing export trends," ERS said. "Retailer margins, having contracted since the drought, may expand in 2014 given moderate input prices, which should contribute to inflation." Get more details.


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