DROUGHT MONITOR REFLECT MILD IMPROVEMENT... The National Drought Monitor reflects some improvement across the country's mid-section and central Gulf states, but overall, the country only saw one-percentage-point improvement from last week, with just 28.26% of the contiguous U.S. now drought-free. However, recent rains across Texas and more in the forecast should be reflected in next week's monitor. Currently, 95.71% of Texas is covered by some form of drought, so there is a lot of work ahead in relieving long-lasting soil moisture deficits! Click here for related maps.
CPC: ENSO-NEUTRAL FAVORED INTO AT LEAST SPRING... The National Oceanic and Atmospheric Administration's Climate Prediction Center (CPC) says ENSO-neutral conditions continued during December as equatorial sea surface temperatures (SST) anomalies were positive in the western Pacific, near zero in the central Pacific and slightly negative in much of the eastern Pacific. It reports most models suggest neutral conditions will continue into at least spring.
"Model predictions favor near-average SST in the Nino-3.4 region from the Northern Hemisphere winter 2012-13 into summer 2013," it states. The CPC continues, "Because predictions through the April-June season are known to be less skillful, the forecasts for the summer carry limited confidence at this time. Thus, it is considered unlikely that an El Nino or La Nina will develop during the next several months, and ENSO-neutral is favored through Northern Hemisphere spring 2013."
REPORT: RUSSIA FINDS RACTOPAMINE IN U.S., CANADIAN & BRAZILIAN PORK... The compound ractopamine has been found in shipments of pork from the U.S., Canada and Brazil, according to report from Interfax, and Russia will bar imports from one U.S. and two Canadian plants as a result. Further, the report said that imports from Brazil will see stepped up testing as a result of the find. USDA's Food Safety and Inspection Service has not yet confirmed any change in status for U.S. plants eligible to ship pork to Russia, however.
In December, Russia announced it would begin testing U.S. and Canadian beef and pork shipments shortly after the U.S. passed a trade bill with the country that included a controversial human rights provision. These are the first reported finds, but given the situation, there apparently have been previous finds of ractopamine in shipments. Prior to today, there has been no public mention of ractopamine finds. This will now put to test Russia's membership in the World Trade Organization. Get more details.
WATERS RECEDE IN ARGENTINA, BUT TROUBLES REMAIN.... Pro Farmer Member and Argentine farmer Eduardo Reynolds says waters are receding in Argentina, but in some areas water is still too deep to resume planting. "Corn sown on time and that didn't get flooded or hail are really awesome -- we haven't seen that condition in a long time, so we should have a good corn harvest for first sown," says Reynolds. "On the other hand, there is a lot of late corn and the yield is still to be defined in late January or early February when it flowers," he continues.
Reynolds also says pressure from weeds is a concern for corn and soybeans. "Wheat and barley harvest are still under way in many areas so second-sown soy is later than usual and will have to wait and see how things turn out," he adds. "On top of all these problems there is a dry forecast for January so will be hard on late sown areas," he explains. Click here for related pictures.
EXPORT PROJECTIONS MAY BE 'WILDCARD' IN TOMORROW'S REPORT... Following is a snapshot of how exports are stacking up. We compare how USDA's export forecast is performing against USDA's Weekly Export Performance Indicator. Traders largely expect USDA to raise its wheat and soybean export projections in its Supply & Demand Report tomorrow morning, while performance data suggests the corn export projection should be trimmed.
Wheat: With 21 weeks left in 2012-13 marketing year, total wheat export bookings are running 4% behind year-ago. In the December Supply & Demand Report, USDA lowered its wheat export forecast by 50 million bu. to be even with last year at 1.05 billion bushels. Total commitments (sales plus shipments) are at 68% of USDA's export forecast, which is below the five-year average of 81% and last year's pace of 75% at this time. This data suggests USDA's current export projection is in the ballpark.
Corn: With 34 weeks left in the 2012-13 marketing year, total corn export bookings are running 49% below year-ago. USDA left its export projection unchanged in its December Supply & Demand Report at 1.15 billion bu., which is 25.5% below the previous marketing year. USDA reports total bookings as a percent of total exports are at 44%, which compares to 66% last year at this time and a five-year average of 59%. These figures suggest USDA's current export projection is (way) too high.
Soybeans: With 34 weeks left in the 2012-13 marketing year, total soybean bookings are running 27% above year-ago. USDA left its export projection unchanged in its December Supply & Demand Report at 1.345 billion bu., which represents a 1.3% drop from the previous marketing year. USDA reports total bookings as a percent of total exports are at 88%, which is above the five-year average of 74% and last year's pace of 67% at this time. Given the fact that China has recently cancelled U.S. soybean sales and Brazilian supplies will soon be available for export, sales of U.S. soybeans will continue to slow. But given the very strong start, there is justification for USDA to raise the export projection in tomorrow's report. Click here for pre-report expectations.