CCC ANNOUNCES LOAN RATES FOR 2013 CROPS... The Commodity Credit Corporation (CCC) today announced county loan rates for the 2013 crops of wheat, corn, grain sorghum, barley, oats, soybeans and other oilseeds; national milled loan rates and state loan rates by class for the 2013 rice crop; regional loan rates for 2013 pulse crops; and the national loan rate for the 2013 honey crop. Following are some of the national loan rates (click here for the full list):
- Wheat: $2.94 per bushel
- Corn: $1.95 per bushel
- Grain Sorghum: $1.95 per bushel
- Barley: $1.95 per bushel
- Oats: $1.39 per bushel
- Soybeans: $5.00 per bushel
- Other Oilseeds: $10.09 per hundredweight for each "other oilseed"
FARM BILL IMPLICATIONS OF CBO BASELINE UPDATES... Washington Consultant Jim Wiesemeyer give the Congressional Budget Office's baseline projection updates the following read: The rebound in U.S. corn and soybean production and resulting lower prices are the likely reasons for lower U.S. crop insurance spending projections over the 10-year budget baseline period -- lower prices lower the cost of coverage and thus the costs for the program. Contacts note this could ease some of the focus on the program, but subsidy opponents will still keep the program squarely in their crosshairs for the future.
Nutrition programs remain the largest portion of outlays under the farm bill -- $760 billion out of the $976 billion total 10-year outlays projected. That is down from the 2012 baseline from CBO and will no doubt be touted by nutrition program backers as a way to try and answer those calling for drastic reductions in the program.
The shifts outlined by CBO in the baseline do not really change the overall task ahead for the House and Senate Ag Committees, but they will have a slightly bigger baseline to work with -- $976 billion vs. $970 billion. Still, exactly how the ag panels craft the legislation will still be dictated by the level of savings they will have to achieve over the next 10 years. That will have a greater say in the final product and so far there is no word yet on just what kind of reductions with which the ag panels will have to work. Get more analysis from Jim.
ETHANOL PRODUCTION BOUNCES BACK SLIGHTLY... U.S. ethanol production recovered from its lowest level since the Energy Information Administration (EIA) began keeping records more than two years ago last week to 774,000 barrels per day (bpd). While this is up 4,000 bpd from the previous week, it's well below 923,000 bpd a year ago. Meanwhile, stocks dropped 2.2% from the previous week to 20.1 million barrels. The EIA reported no ethanol imports -- a factor that led to a drawdown in stocks.
PF MIDWEEK MARKETING GAME PLAN UPDATE...
CORN: Hedgers are 100% sold in the cash market, with cash-only marketers 75% priced on 2012-crop. With futures in the month-long choppy consolidation range, wait to get current with cash sales. We will remain patient on 2013-crop sales given the moisture needs across the western Corn Belt, although a technical breakdown could provide a sign a light sale is justified.
BEANS: Hedgers are 100% sold in the cash market, with cash-only marketers 75% priced on 2012-crop. With the short-term trend higher, hedgers and cash-only marketers should wait to get current with advised cash sales. But violation of steep uptrending support would bring advice to catch up on sales. Remain patient on 2013-crop sales, but be prepared to make initial, light sales when the uptrend runs out of momentum.
WHEAT: Hedgers and cash-only marketers have 75% of 2012-crop sold in the cash market. With futures remaining in the month-long choppy consolidation range, wait to get current with advised old-crop sales. Be prepared to make initial 2013-crop sales on an extended price recovery. We don't want to get too aggressive with old- or new-crop sales at this stage given U.S. and global crop concerns.
COTTON: Hedgers and cash-only marketers have 50% of expected 2012-crop production sold in the cash market. Wait to get current on cash sales, but be prepared to increase 2012-crop sales and to make initial 2013-crop sales when the market signals a near-term high has been posted.
CATTLE: Fed cattle producers should continue to carry all risk in the cash market given the tightening supply situation which limits downside risk. But feeder cattle buyers should be prepared to establish long coverage if bullish momentum increases.
HOGS: Hog producers should continue to carry risk in the cash market. Unless traders get a strong fundamental reason to be active buyers or sellers, the near-term price pattern will likely remain choppy.
FEED: Get current with advised feed coverage, but there's no urgency to add coverage at this time. 25% of 1st-qtr. corn needs are covered in long March corn futures at $6.87 and 25% of 2nd-qtr. corn needs are covered in long July corn futures at $6.78 3/4. 25% of 1st-qtr. protein needs are covered in long March soybean meal futures at $395.30, and 25% of 2nd-qtr. protein needs are covered in long July soybean meal futures at $388.00.