Evening Report (VIP) -- January 13, 2014

January 13, 2014 09:16 AM
 

Change in jet stream brings milder weather to much of U.S... Meteorologist Gail Martell of MartellCropProjections.com says the Northern Hemisphere upper-air troughs and ridges in the jet stream have relaxed since early January, ushering "less cold" air into the country's midsection and "less warm" conditions into Europe.

"The high amplitude waves previously were nature's way of creating equilibrium between the polar cold and tropical heat. Without extreme waves in the jet stream the polar areas would become increasingly colder and the tropics hotter. Nature has an effective way of redistributing heat and cold," she notes.

Strong warming across the Central and Southern Plains has melted the protective snowcover from the winter wheat crop and drought has intensified in recent weeks. "Afternoon temperatures yesterday reached the mid 50s °F in Kansas, while Oklahoma and Texas reported upper 60s °F to low 70s °F in the southern Plains," she reports. View related maps.

 

Argentina announces 1.5 MMT wheat export quota... Argentina approved 1.5 MMT of wheat for exports in 2013-14 today, according to the country's economy minister. While 500,000 MT will immediately be permitted for shipment, the minister says the other 1 MMT will be approved gradually. As of last month, exporters had already sold 1.6 MMT of wheat for 2013-14 and have been awaiting government approval for shipment. On Friday, USDA projected Argentine wheat exports of 4.5 MMT this marketing year. The Argentine government also plans to lift the ban it had placed on 2012-13 wheat exports.

The country's ag minister today said Argentina will wait until planting of the 2013-14 corn crop is wrapped up before announcing its export quota for that crop. The ag ministry's latest report pegs corn planting at 82% complete.

 

USDA readying for new farm bill... Speaking at the American Farm Bureau Federation's (AFBF) 95th Annual Convention, USDA Secretary Tom Vilsack today said that USDA is readying to implement provisions of a new farm bill shortly after the after the legislation passes, rather than focusing on implementing 1949 farm policy known as permanent law that to which the government must revert if Congress fails to pass a new farm bill or another extension.

Vilsack explains, "I want my people to spend time on what makes sense and to create an expectation that this gets done." More specifically, Vilsack noted USDA is preparing to implement crop revenue protection and the new stacked income protection plan (STAX) for cotton. He said USDA is also preparing to consolidate conservation programs.

 

Supreme Court won't take up Monsanto seed patent case... The U.S. Supreme Court's decision not to review a case involving Monsanto Co.'s biotech seed patents is being billed as a defeat for the company's critics. The Organic Seed Growers and Trade Association along with a number of organic and conventional farmers, seed companies and advocates sued Monsanto March 29, 2011, with the intent of prohibiting Monsanto from suing producers whose fields become inadvertently contaminated with crops containing the company's GMO traits. Monsanto says, "A blanket covenant not to sue any present or future member of petitioners' organizations would enable virtually anyone to commit intentional infringement."

 

Canadian crops overwhelm logistics... We asked Pro Farmer Canada Editor Mike Jubinville for an update on how the country's transportation system is managing the record crop. Here's what he said to say:

"Typically Canada would see total year-end wheat carry somewhere on the order of 4 MMT to 5 MMT (including durum). In our new open market, post-Canadian Wheat Board (CWB) monopoly trading environment, it's probably going to be 11 MMT in 2013-14 -- not because there isn't a desire to sell, but because our rail and port logistics are simply overwhelmed by the size of this year's crop. Wheat, canola, barley, oats -- you name it. West Coast shipping is now booked out solid to May.

"37.5 MMT of Canadian wheat is getting transport priority, along with canola at this time, but we will be unable to move it all this marketing year, which has resulted in plugged interior commercial storage, unbelievably wide cash basis and in some areas grain companies have gone to "no bid" on wheat. That's unheard of.

"So we have a bit of a uniquely Canadian situation here as we are still coming to terms with just how big the 2013 crop really is. Prices from a futures perspective generally follow international market trends, but cash price at the ground level here are being hit with additional penalty resulting from a thoroughly congested system. Call it a $1-per-bushel additional basis penalty being the difference between Canadian and U.S. elevator prices on spring wheat five miles either side of the border.

"I don't think USDA is capturing it yet, but Canadian farmers are seeing the difference -- not just in price, but in just the opportunity to deliver and hauling wheat across the border. This might not be happening yet in droves, but it's coming as frustration levels here escalate. I don't want to call it a tsunami of wheat from the north, but it's going to be more than normal as Canadian farmers are now looking for any and all outlets to move wheat. I have never seen anything quite like it."

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