Evening Report (VIP) -- February 25, 2013

February 25, 2013 09:13 AM

MARTELL: ACTIVE U.S. WEATHER PATTERN TO CONTINUE THIS WEEK... Meteorologist Gail Martell of MartellCropProjections.com says an active weather pattern will continue across the Plains and Corn Belt this week, bring more much-needed precip to these regions. She says areas of Kansas, Oklahoma and western Texas are in line for an additional 0.25 to 1 inch of moisture from snowmelt, which could shrink the soil moisture deficit to within one inch.

"Back-to-back winter storms in the Southern Great Plains are due to a strengthening subtropical jet stream midwinter. This is the main source of winter precipitation in the southern U.S., previously weakened by the La Nina influence," says Martell. "However, as the La Nina effect has faded, winter weather has become suddenly stormy and wet. Not only has hard red winter wheat received valuable precipitation in the southern Great Plains, but also the Gulf States and Southeast U.S. have received drought-relieving rains." Click here for related maps.



BRAZILIAN SOYBEAN HARVEST ACCELERATES... Generally favorable conditions have allowed Brazilian soybean producers to aggressively ramp up soybean harvest the past two weeks. As of last Friday, Brazil's harvest was 28% complete nationwide, according to private Brazilian firm Celeres. Mato Grosso, Brazil's top soybean production state, was 45% harvested, while the No. 2 production state of Parana had 37% of the crop out of fields. No harvest activity has begun in the No. 3 production state of Rio Grande do Sul.

Some rains are expected later this week across Parana and Mato Grosso, but producers should again be able to make strong harvest progress in many areas of these states.

With harvest of the record Brazilian soybean crop picking up, attention is on how quickly beans move to ports and onto ships. As we reported in "First Thing Today," the planned work stoppage by port workers tomorrow has been called off and union heads say they will not strike through March 15. But labor unrest remains an issue that could flare up. Celeres reports there are over 100 ships waiting to load or on their way to load soybeans at Brazilian ports.



PROGRESS BEING MADE TO MODERNIZE PORT OF PARANAGUA... South American crop consultant Dr. Michael Cordonnier says the governor of Parana has authorized the start of the bidding process to expand and modernize the export corridor at the Port of Paranagua. The three-berth port will be expanded to seven and the centerpiece of the expansion will be a new "T-shaped" pier that will extend 400 meters into the ocean from the present pier.

The new pier would provide four new berths for vessels too large to use the present berths. One of the new berths will be able to handle "cape-size" vessels with the capacity of 110,000 MT of grain. The other three berths will be able to handle "post-Panamax" vessels, which have the capacity of 75,000 MT of grain. Click here for more details.



ERS EXPECTS 3% TO 4% RISE IN ALL FOOD PRICES FOR 2013... Despite the severe drought in the Midwest, USDA's Economic Research Service (ERS) reports retail food prices were mostly flat in 2012, with the food-at-home Consumer Price Index (CPI) increasing just 1.1% from January 2012 to January 2013 and the all-items CPI rising 1.6% from the year prior. The food-away-from-home (restaurant) index did rise 2.3% in relative to the year prior as of January. This prompted ERS to say that while "seasonality may be a factor, it appears that the effects of the Midwest drought are being reflected in retail food prices."

ERS expects most of the increase in grain and soy prices as a result of the 2012 drought to be realized in 2013. ERS's inflation forecast is for a 3% to 4% increase for both all food and food-at-home (grocery store) prices in 2013. This annual increase is above the historical average for both indexes. Get more details.


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