Evening Report (VIP) -- January 14, 2014

January 14, 2014 09:02 AM
 

Consultant trims Argentine crop pegs... Crop consultant Dr. Michael Cordonnier has lowered his estimates of the Argentine corn and soybean crops due to unfavorable weather. He trimmed his soybean crop forecast by 1.5 MMT to 54.5 MMT and lowered the size of the corn crop by 500,000 MT to 22.5 MMT.

"The Argentine weather has been less than desirable for about the last month," says Dr. Cordonnier. "During the second half of December, temps hit historic highs for much of the country. The temps eased back during the first week of January, but it looks like they will be moving back up this week... Very little rainfall is forecast for this week and some scattered showers are forecast for next week. This is not a good forecast for soybeans, and it is especially worrisome for the Argentine corn crop."

Soybean planting is 92% complete in Argentina, with remaining unplanted acreage mostly being double-crop soybeans. Dr. Cordonnier says this crop, if planted, could have germination problems. Meanwhile, 84% of intended corn acres have been planted. About a third of the crop is pollinated and another third will pollinate this month. Dr. Cordonnier says with lingering crop issues due to the hot and dry forecast, he has a neutral to negative bias toward the corn and soybean crops.

Dr. Cordonnier also lowered the Paraguay soybean crop estimate by 500,000 MT to 9.5 MMT, saying a lack of rainfall during December and early January has lowered yield prospects.

 

Consultant leaves Brazil crop estimates unchanged... Dr. Cordonnier says while early soybean yield reports are very strong, pockets of dryness in central Brazil have developed since early December, keeping him cautious about altering his crop pegs. He left his Brazilian soybean crop estimate unchanged this week at 90 MMT, and says he has a neutral to lower bias toward the crop.

Dr. Cordonnier also left his Brazilian corn crop estimate unchanged at 68.5 MMT and says he has a neutral bias going forward. He reminds that safrinha corn acreage remains the unknown.

Dr. Cordonnier 2013-14 Soybean Estimates

Est.
Maximum
Minimum
2012-13

in million metric tons

Brazil
90.0
92.0
85.0
82.0
Argentina
54.5
57.0
50.0
49.5
Paraguay
9.5
10.0
9.0
9.3
Bolivia
2.5
2.7
2.2
2.6
Uruguay
3.2
3.5
2.8
3.0
Total
159.7
165.2
149.0
146.4

Dr. Cordonnier 2013-14
Corn Estimates

Est.
Maximum
Minimum
2012-13

in million metric tons

Brazil
68.5
73.0
66.0
81.0
Argentina
22.5
25.0
20.0
26.5
Paraguay
2.5
2.8
2.1
3.0
Bolivia
0.7
0.8
0.6
0.7
Uruguay
0.4
0.5
0.3
0.4
Total
94.6
102.1
89.0
111.6

 

Mild funding increase for USDA... The $1.012 trillion, 1,582-page omnibus spending package for Fiscal Year (FY) 2014 released Monday includes all 12 appropriations bills for funding the entire federal government for the remainder of Fiscal 2014. Release of the measure's details sets it up for a vote in the House on Wednesday and another later in the week in the Senate.

The bill would provide $20.9 billion in discretionary spending for USDA and the Food and Drug Administration for the fiscal year that ends Sept. 30, up from $20.7 billion in fiscal 2013. The bill would provide $6.7 billion for Women, Infants and Children (WIC). The bill would increase the Commodity Futures Trading Commission's funding by $10 million from 2013, to $215 million. In the Energy-Water spending section, Army Corps of Engineers funding would jump by $487 million — or 10%— to $5.5 billion and Environmental Protection Agency (EPA) funding would be cut by $143 million to $8.2 billion, according to the House Appropriations Committee summary. Get more details.

 

Ag policy riders of omnibus spending bill... Some other policy-related riders to the massive spending package that are of note to agriculture include the following:

  • Encourage OSHA to consult with USDA before enforcing worker-safety regulations for on-farm grain storage. OSHA contends grain bins are not covered by a small-farm exemption that the bill would continue.
  • Direct the General Accountability Office (GAO) to analyze EPA's policies for responding to requests for personal information of private businesses and steps EPA is taking to better manage private information. The provision follows negative reaction from farm groups over the release of information about livestock operations.
  • Provide $1 million to study the extent of domestic hunger and food insecurity and establish a 10-member National Commission on Hunger to make policy recommendations to Congress.
  • Maintain a prohibition on mandatory reporting of greenhouse gas emissions from manure management systems.
  • Provide USDA $20 million in funding to fight citrus greening disease.

 

Language to prevent GIPSA from issuing some new rules... The omnibus bill includes language to prevent the Grain Inspection, Stockyards and Packers Administration (GIPSA) from issuing new rules for farmers who raise poultry and livestock under contract that was intended to give them additional legal protections in their dealings with processors. The language is different from a provision in the House farm bill (HR 2642) that would repeal contract rules that major livestock groups and packing houses say go too far. House and Senate farm bill negotiators are continuing to work on a final farm bill.

 

House clears stopgap CR... The House easily passed a three-day continuing resolution (CR) to fund the government through Jan. 18 today, allowing lawmakers a bit more time to consider and clear the massive omnibus spending agreement for FY 2014 that was released last night. The current CR for FY 2014 expires tomorrow. The Senate is expected to easily clear the clean, short-term CR tonight.

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