Consultant trims Brazilian bean crop peg, again... South American Crop Consultant Dr. Michael Cordonnier has trimmed his estimate of the Brazilian bean crop by another 500,000 MT to 89 MMT, and says he has a "neutral to lower bias going forward" due to recent hot and dry conditions in southern Brazil. He says harvest is around a third complete in Mato Grosso, with about 20% of the Brazilian crop harvested overall.
Meanwhile, Dr. Cordonnier left his estimate of the Brazilian corn crop unchanged at 68.5 MMT and says he has a neutral bias toward the crop. "The safrinha corn in southern Brazil may struggle to get established due to dry conditions and there may be problems later on if the soil moisture is not recharged before the onset of the next dry season," he says.
Dr. Cordonnier also left his Argentine crop pegs unchanged from last week, saying outside of the flooded areas, recent rainfall has recharged dry soils. He pegs the corn crop at 22.5 MMT and soybean production at 53.5 MMT. He says his bias toward the Argentine crops is "neutral."
Malanga troubled by economic indicators... La Salle Economics, Inc. President and Pro Farmer contributing economist Vince Malanga is troubled by what he calls "anemic" employment gains in December and January and the new Fed Chair's skepticism over the apparent weakness in recent economic data reports.
Malanga says newly sworn in Federal Chair Janet Yellen may be too optimistic about employment data. "Interestingly, virtually every data report of late has shown downward revisions for October and November implying a significant downward revision to the estimated 3.2% GDP growth rate for last year's final quarter. Further, business activity in the current quarter appears to be tracking at less than a 2% annual rate," he says.
Malanga continues, "Beyond this, housing price momentum is fading; farmland values are weakening; vehicle manufacturers are introducing aggressive discounts to unload excess inventory; and recent commodity price strength is beginning to unwind."
Malanga says the above factors suggest inflation could track even lower in coming months. Additionally, weakening business activity implies the Fed's official forecast of 3% growth and 2% inflation is "aggressive to put it mildly."
Martell: Winter weather trend resembles La Nina... Meteorologist Gail Martell of MartellCropProjections.com says heavy snow across the Midwest and expanding drought in the Southwest follow winter weather trends most closely associated with La Nina. While the Australian and U.S. national weather bureaus most recently state the current state of ENSO is neutral, but a possible shift to El Nino is possible by summer, Martell says sea surface temperatures cooled from December to January.
"Midwest winters are cold with the La Nina effect as the polar jet stream carves out a cold trough over the north-central United States. The Canadian prairies also experience harsh, cold winters with La Nina. The southern tier of the United States becomes very dry when the La Nina occurs," says Martell. "This is due to a very weak subtropical jet stream. The southern jet stream is the main source of winter precipitation, typically in the southern United States. Midwest winters are stormy and wet east of the Mississippi River with the La Nina effect. Dryness often develops in the western Corn Belt. The La Nina weather anomalies just described are a close match with the current conditions."
But Martell also recognizes much stronger and persistent La Nina cooling is required in the equatorial Pacific Ocean in order for a full-blown La Nina to occur. Click here for more.
Russia to lift ban on U.S. turkey meat imports next week... Russia will lift its ban on U.S turkey meat imports on Feb. 24, a spokesman for Russia's veterinary and phytosanitary service (VPSS) said today. The country recently indicated it would resume pork imports by March, but VPSS now says a decision on pork imports is unlikely to come before the end of February. Russia has had a ban in place against most meat imports from the U.S. since early 2013 due to the presence of the feed additive ractopamine.
President orders new efficiency standards for heavy-duty vehicles... President Barack Obama today announced he will order his administration to develop new efficiency standards for trucks, buses and other heavy-duty vehicles. This would be an extension of the standards issued in 2011 and would apply to future model years. While Obama did not provide any specific targets, he said he expects a draft proposal by March 2015 and for the rule to be implemented by 2016.
Obama said the forthcoming regulations for heavy-duty truck and buses would be "ambitious" and that the government would offer truck companies and energy companies new tax credits to encourage the manufacture of more efficient vehicles and alternative fuel networks. The president has been quite aggressive in using regulations to advance his climate change agenda during his second term.