Evening Report (VIP) -- January 28, 2014

January 28, 2014 08:54 AM

Consultant trims Argentine soybean crop... Dr. Michael Cordonnier has trimmed his estimate of the Argentine soybean crop by 1 MMT to 53.5 MMT due a decline in planted acreage. He expected some of the late-planted corn to be switched to soybeans, but says planting delays caused by the dry weather gave producers time to plant all of their intended corn. As a result, he trimmed his soybean acreage figured by 200,000 hectares to 20.4 million hectares.

"The development of the soybean crop varies considerably, with the latest planted soybeans in Argentina still in vegetative development and the earliest soybeans starting to fill pods," he says, also noting the condition of the crop varies due to variable rainfall. "In central and north-central areas the crop is generally rated in very good condition. Moisture deficits remain in northwest Buenos Aires, northern La Pampa and central and southeastern Cordoba, where the soybeans are rated average at best."

Dr. Cordonnier left his Argentine corn estimate unchanged at 22.5 MMT, with planting on its final leg at 91% complete. "This late surge of moisture will now probably allow farmers to plant all their intended corn acreage," he adds, noting the crop is in variable shape depending on when it pollinated. "As a result, yields will be quite variable."


Consultant leaves Brazilian crop estimates unchanged... Dr. Cordonnier says soybean harvest in Mato Grosso has been slowed by rains, with less than 5% of the entire Brazilian crop harvested. "Early yield reports in Mato Grosso continue to point to an excellent crop with yields in the upper 40-bu-per-acre range, which is very good for early maturing soybeans," he says.

Dr. Cordonnier left his Brazilian soybean crop estimate unchanged at 90 MMT, but says he has a neutral to slightly lower bias going forward.

The safrinha corn crop in Brazil is off to a somewhat slow start due to wet conditions that are delaying early soybean harvest, says Dr. Cordonnier. He reminds the planting window for the crop extends until the end of February. He left the Brazilian corn crop estimate unchanged at 68.5 MMT and has a neutral bias going forward.

"The Brazilian corn crop will depend heavily on when the rains end. If the rainy season is extended like it was for the last two years, then my estimate is too low. If the rainy season ends prematurely in March or early April as some are predicting, then my estimate might still be too high," he says.


Argentine Member says rains provide some relief... Pro Farmer Member and Argentine farmer/trader Eduardo Reynolds says recent rains are providing some relief to his soybean crop, although damage from the drought is still revealed by flower abortion. But he acknowledges the crop has "all of February to catch up and the roots that kept them alive will help them catch all the humidity."

Benefit to the corn crop is more variable, reports Reynolds, as he says the early crop that was able to tap into the water table is faring better than the crop that didn't have early moisture reserves. The second-sown corn is benefiting from the rain, as the moisture is aiding in germination.

Bottom line, Reynolds says, is "now that it has rained... will have a good to very good soy harvest and a poor to very poor corn harvest, with a normal rainy summer."


Public comment period for 2014 RFS proposal closes today... Today is the final day the Environmental Protection Agency (EPA) will accept public comment on its 2014 Renewable Fuel Standard (RFS) volume requirements proposal for a biofuel program that requires fuel refiners to mix some ethanol and other renewable fuels in with conventional gasoline. The agency lowered the corn-based ethanol mandate in the draft rule to 13 billion gallons, from the 14.4-billion-gallon level spelled out in law and the 13.8-billion-gallon level for 2013. You can submit or read comments here until 10:59 p.m. CT today.


Texas crop condition declines, again... State statisticians in Texas report the condition of the wheat crop declined last week, with the amount of the crop rated "poor" to "very poor" increasing by two percentage points to 37%. The amount of the crop rated "fair" declined by two percentage points to 40%, while the amount rated "good" to "excellent" was unchanged at 23%. The report notes producers in the northern High Plains continued to irrigate winter wheat and producers in the northern Low Plains are concerned about the condition of the crop.


More key provisions in farm bill conference report... In "First Thing Today" we reported that a conference report on the farm bill was released yesterday, moving the new farm bill one step closer to completion. Some highlights outside of those reported in this morning's report include:

  • Direct payments are eliminated.
  • A transition payment would be made to cotton producers participating in the Stacked Income Protection Program (STAX) for 2014 and one would be made in 2015 in counties where STAX is not available.
  • Base acres: A reallocation of base acres is allowed but not required based on the four-year average acreage planted for harvest or use (or prevented from planting due to drought, flood, natural disasters, or other condition beyond the control of producers) during the 2009-2012 crop years. If acreage prevented from planting was planted to another covered commodity in the same year (except established double-cropping), the producer can elect to use that crop in determining the four-year average but cannot include both the initial and subsequent crop. The reallocated base acres cannot total more than the base acres in effect on the farm as of Sept. 30, 2013.
  • Generic base: New name for cotton base acres. Cotton producers would given the chance to plant other crops on their generic/cotton base acres, but they would receive a reduction for that year in their generic/cotton base.
  • Ag Risk Coverage (ARC): Available on an individual (farm) or county basis. If in the farm ARC, all crops on that farm number are in the individual ARC.
  • If in Price Loss Coverage (PLC) or County ARC: Producers can mix and match their choices -- they can go PLC on one crop on that farm number and go the Country ARC on another crop on that farm number. There is a one-time election by the producer for ARC and PLC.
  • Actively engaged: No change to the definition of what is considered actively engaged for farm program payment eligibility. USDA is directed to come up with a regulation if they determine a change should be made.
  • Payment limit: $125,000 per person ($250,000 for a couple) for PLC, ARC or marketing loan gains/LDPs.
  • Disaster programs: Livestock disaster programs are restarted but the Supplemental Revenue Payment (SURE) program is not. Livestock programs are retroactively activated back to 2012.
  • Conservation compliance: Linkage is included for crop insurance but only for years after which there is a final determination of a violation and it does not apply in the year in which the determination was made nor any prior years.


For more detailed analysis of the report, click here.


Propane price update... Pro Farmer Inputs Monitor Editor Davis Michaelsen has compiled pricing data that reflects the historic rise in propane prices. Click here for the updated table.


Correction to ERS cereals and bakery products outlook... In yesterday's "Evening Report" we incorrectly said ERS expects cereals and bakery products to decline 1.5% to 2.5% in 2014. It should have read ERS lowered its inflation forecast for cereals and bakery products to a 1.5% to 2.5% increase in 2014. Previously ERS expected a 2% to 3% rise for the category.

Back to news


Spell Check

No comments have been posted to this News Article

Corn College TV Education Series


Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!


Market Data provided by QTInfo.com
Brought to you by Beyer