CONSULTANT LOWERS BRAZIL CORN ESTIMATE... South American crop consultant Dr. Michael Cordonnier has lowered his estimate of Brazil's corn crop by 1 MMT to 70 MMT due to lingering dryness in southern growing areas. "There have already been concerns expressed about the success of corn pollination in southern Brazil and if the forecast for hotter and drier weather over the next few weeks materializes, then these concerns are going to increase," he says, noting he has a neutral to negative bias toward the crop.
Dr. Cordonnier left his Brazilian soybean crop estimate unchanged from last week at 80 MMT, but says to maintain that level of production, the weather in southern Brazil needs to improve over the next few weeks.
ARGENTINE CROP ESTIMATES UNCHANGED... Dr. Cordonnier has left his estimates of Argentina's corn and soybean crops unchanged from last week at 22.5 MMT and 56 MMT, respectively. But he says he maintains a slightly negative bias toward both crops due to the excessively wet weather pattern.
Regarding the corn crop, Dr. Cordonnier says since his estimate is already toward the lower end of expectations, he left it unchanged. But he says he still believes there is more downside risk to the crop, "but that will depend on how the December planting goes and weather during pollination."
"There is still a possibility the Argentine soybean acreage may eventually end up being larger than initial estimates due to switching some of the intended corn acreage to additional soybean production," says Dr. Cordonnier, although he says yields could be compromised somewhat due to delayed planting.
ENSO-NEUTRAL CONDITIONS LINGERING... The Australian Bureau of Meteorology says the tropical Pacific remains neutral with respect to ENSO, with neither El Nino nor La Nina present. Climate models indicate this situation is likely to remain through the southern hemisphere summer. As a result, it says Australian rainfall and temperatures are unlikely to be strongly influenced by ENSO. Click here for more.
INFORMA ECONOMICS UPDATES SOUTH AMERICAN PRODUCTION NUMBERS... Sources familiar with Informa Economics say the firm has updated its South American crop estimates. Informa has reportedly trimmed its Argentine corn estimate by 1 MMT to 27 MMT, as well as lowered its Argentine soybean crop estimate by 1.1 MMT to 58.4 MMT. Meanwhile, Informa has reportedly raised its Brazilian soybean estimate by 150,000 MT to 81.4 MMT, but cut its Brazilian corn estimate by 600,000 MT to 66.2 MMT.
U.S. HAS UNTIL MAY TO COMPLY WITH WTO COOL RULING... The World Trade Organization arbitrator today decided the U.S. has until May 23, 2013, to comply with a WTO decision this summer the U.S. country-of-origin labeling program (COOL) requirements for meat were discriminatory against livestock from other countries (specifically Canada and Mexico) and therefore are in violation of WTO trade obligations.
INSERTING FARM BILL WITH FISCAL CLIFF PACKAGE STILL A VIABLE OPTION... Veteran farm bill observers signal a farm bill compromise between the Senate and House version could still be part of a year-end fiscal cliff package. The farm bill package could involve a framework agreement this year whose details will be fleshed out in early 2013. Getting an actual new farm bill and other fiscal cliff issues agreed to by Congress may take until early 2013 via language very similar to the failed Super Committee process in 2011. If so, lawmakers would have until a specified date in 2013 to implement the framework agreement; if not, triggered reductions would ensue. In the meantime, an extension of the 2008 Farm Bill seems probable as implementing changes will take time.
Any "accelerated" farm bill action would be aided by a decision to avoid House floor debate and move farm bill provisions into a fiscal cliff package designed for a single vote with no amendments allowed. This strategy is by not means decided on at this juncture.
House Majority leader Eric Cantor (R-Va.) continues to say the "votes are not there" on the House floor for a farm bill, but more than a few disagree. However, some farm bill stakeholders would be more than happy to see House floor action on a farm bill bypassed due to expectations some lawmakers would push controversial amendments.
Odds are high that the eventual farm bill package will contain a farmer safety net option of either revenue assurance or increased target/reference prices along the lines of the pending House proposal -- especially after Senator Pat Roberts (R-Kan.) shifted his view to say he is prepared to accept target price supports.