Evening Report (VIP) -- February 21, 2013

February 21, 2013 09:09 AM

GLAUBER SEES POTENTIAL FOR RECORD 2013 CORN AND SOYBEAN CROPS... USDA Chief Economist Joseph Glauber, this morning at the annual USDA Agricultural Outlook Forum, said he expects a rebound in corn and soybean yields to result in record production for those crops and lower prices compared to the current marketing year. Glauber said he expects planted corn acreage of 96.5 million, (97.2 million in 2012); soybean acreage of 77.5 million (77.2 million in 2012); wheat acreage of 56 million (55.7 million in 2012); and cotton acreage of 9.8 million (12.1 million in 2012). Overall, Glauber said total planted acreage in 2013 of 282.4 million would be down 1.6% from 2012.

Glauber projected a record corn crop of 14.53 billion bu., record soybean production at 3.405 billion bu., wheat production at 2.1 billion bu. and cotton production at 14.0 million bales. He projected an average 2013-14 corn price of $4.80 ($7.20 in 2012-13); average soybean price of $10.50 ($14.30 in 2012-13); average wheat price of $7.00 ($7.90 in 2012-13); and an average cotton price of 73 cents, (71 cents in 2012-13). Click here for more details.


CATTLE ON FEED TO REFLECT UPCOMING MARKETINGS HOLE... While traders look for Friday afternoon's Cattle on Feed Report to show Placements even with year-ago levels and Marketings at 104.7% of year-ago levels, On Feed at "just" 93.8% of year-ago levels suggests a significant tightening of supplies and a marketings hole in the near future. If traders' average guess is in the ballpark, it would suggest total feedlot supplies are down around 660,000 head from year-ago levels.

Report expectations

Avg. Trade Guess


% of year-ago levels

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SMITHFIELD: WE CAN MEET CHINA'S DEADLINE ON PORK... This week's announcement that China wants pork from the U.S. certified by a third party to be free of ractopamine by March 1 has raised concern about a slowdown -- at least temporarily -- in pork exports. But Smithfield Foods Inc. said it is able to meet the March 1 deadline.

In a press release, Smithfield said its Clinton, North Carolina plant has been 100% ractopamine-free since last year and has been regularly shipping product from that plant since that time. In addition, the company's largest pork processing facility in Tar Heel, North Carolina will be fully converted to ractopamine-free by March 1, "in time to comply with the new regulatory requirements from China."


VILSACK: USDA TAKING STEPS TO MITIGATE CLIMATE CHANGE... Pro Farmer Associate Editor Meghan Pedersen, reporting from USDA's Outlook Forum, says during USDA Secretary Tom Vilsack's address to the group, he said USDA is taking steps to mitigate climate change and to transmit information about what steps producers can take relative to soil management to ultimately limit the extent of damage from climate change. Vilsack noted that climate change research is essential to this process as is outreach to more widely disseminate this information. He said organizing these efforts around regional hubs will be helpful to this end. Additional details from his presentation are available at this link.


CPC: DROUGHT IMPROVEMENT EXPECTED ACROSS CENTRAL CORN BELT... The National Weather Service's Climate Prediction Center (CPC) has released its extended weather outlooks for March through May. In its 30- forecast, CPC calls for above-normal precip across Iowa, Minnesota, Missouri and the entire eastern Corn Belt. Its 90-day forecast includes above-normal precip for "just" the eastern half of the central Corn Belt, as well as all of the eastern Corn Belt. Due to the more favorable precip outlook, CPC says the stage is set for some drought improvement across Iowa, Missouri and Minnesota, although drought is expected to persist from Nebraska southward and across the Southwest.

If realized, this weather pattern would maintain the drought situation in Nebraska and the HRW Wheat Belt, although it is promising of relief -- even if limited -- across the central Corn Belt. Still, the drought footprint is larger than at this time last year, meaning there's a long ways to go to mend the western Corn Belt drought. Additionally, a return to a more normal precip pattern this spring could make it more difficult for producers in the heart of the Corn Belt to increase corn acreage from 2012 levels. Click here for related maps.


DROUGHT MONITOR REELECTS NO CHANGE TO PLAINS DROUGHT... According to the National Drought Monitor, a continuing dry pattern that has enveloped the High Plains most of the winter continued. No changes were made this week to the region as limited precipitation did not allow for any improvements and the time of year did not dictate any degradation. However, some minor changes were made to the Southern Plains where a winter storm brought wet snow to much of the Texas Panhandle and into portions of Oklahoma. However, the outlook is promising of possible drought relief to the Plains and Midwest, as it notes the weather pattern has turned more active. Click here for related maps.


ETHANOL PRODUCTION UPTICKS SLIGHTLY... Data released by the Energy Information Administration shows ethanol production of 797,000 barrels per day (bpd) for the week ended Feb. 15 was up 8,000 bpd from the previous week and the highest in six weeks as more plants came back on line. Ethanol stocks of 19.5 million barrels were unchanged from the previous week.


IGC RAISES 2012-13 GLOBAL TOTAL GRAINS CARRYOVER... The International Grains Council (IGC) raised its projection of 2012-13 total grains carryover from last month by 4 MMT to 326 MMT, although still 40 MMT lower than 2011-12. IGC projects total global wheat carryover up 2 MMT at 176 MMT (197 MMT last season) and total corn carryover up 1 MMT at 114 MMT (131 MMT last season). However, the group trimmed its global soybean carryover projection by 1 MMT to 28 MMT (23 MMT last season). In its initial look at the 2013-14 season, IGC says it expects global wheat production to up be 4% from the current marketing year, but much of the increase is expected to be absorbed by an increase in demand to result in just a 2-MMT increase in carryover.

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