Evening Report (VIP) -- January 15, 2013

January 15, 2013 09:02 AM

CONSULTANT RAISES BRAZILIAN SOYBEAN ESTIMATE... South American crop consultant Dr. Michael Cordonnier raised his Brazilian soybean crop estimate 1 MMT to 81 MMT as rainfall over the past week in central Brazil was the heaviest of the season so far. But Dr. Cordonnier says the increase in his production forecast may be short-lived if there is a prolonged dry period in southern Brazil, where conditions have turned drier. While these drier conditions are not a concern at this time, they could become an issue if they persist.

Dr. Cordonnier reports about 1% of Mato Grosso's (Brazil's top soybean production state) soybean crop has been harvested with early yields mostly around 50 sacks per hectare (43.5 bu. per acre). He indicates most farmers are expecting yields to improve with medium and later-maturing varieties.

Dr. Cordonnier left his Brazilian crop crop estimate at 70 MMT. He remains cautious with his estimate since more than half of Brazil's crop will be safrinha (second season) corn, which is very dependent on late-season rains.



ARGENTINE SOYBEAN ESTIMATE LOWERED... Dr. Cordonnier lopped 1 MMT from his Argentine soybean estimate, lowering it to 53 MMT. He's concerned with the late planting of the crop (approximately 4.2 million acres are left to plant) and the drier weather pattern that has recently developed. He says if there is a prolonged period of dry weather in Argentina, there is a significant risk the Argentine soybean estimate could move much lower.

Dr. Cordonnier left his Argentine corn crop estimate at 22.5 MMT, which is well below USDA (28 MMT) and the Argentine government (28 MMT to 30 MMT). He's content to remain very conservative with his estimate for now even though the condition of earlier planted corn on high ground is very good because approximately 865,000 acres are left to be planted and the forecast is drier than normal.



MISSISSIPPI RIVER NOW THOUGHT TO REMAIN OPEN... Just a few weeks ago, most believed the Mississippi River would close to barge traffic the first week of January. These fears have been alleviated thanks to efforts by the U.S. Army Corps of Engineers as well as a wetter weather pattern. Historically, river levels typically hit their lowest point in January and then rise going forward. If this holds true this year, most expect a closure of the Mississippi River to barge traffic to be averted.

Several inches of rain fell in the Mississippi River Valley over the weekend and the Army Corps has been releasing water from Carlyle Lake in southern Illinois. This has helped water levels near Thebes, Illinois, to rise 9 feet since Friday. Also helping to keep the river open to barge traffic is the early completion of the first stage of the rock demolition project in this area to deepen the shipping lane. In response to improved water levels, the U.S. Coast Guard has relaxed its recent draft restrictions.



USDA FINALIZES NEW MICROLOAN PROGRAM... Ag Secretary Tom Vilsack today announced a new microloan program from USDA that is designed to help small and family operations, beginning and socially disadvantaged farmers secure loans up to a maximum of $35,000. The new microloan program is aimed at bolstering the progress of producers through their startup years by providing needed resources and helping to increase equity so that farmers may eventually graduate to commercial credit and expand their operations. The program will be administered through USDA's Farm Service Agency (FSA) Operating Loan Program and it features a simplified and more flexible loan application process. Learn more.


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