Evening Report (VIP) -- January 30, 2014

January 30, 2014 09:05 AM

Cattle Inventory Report to reflect herd rebuilding... Based on pre-report expectations for Friday afternoon's Cattle Inventory Report, traders believe beef heifer retention is going strong. The only thing that makes us hesitant that herd rebuilding is in "full swing" is the ongoing drought in the Southern Plains. Where the bulk of heifer retention took place last year is the key.

Semiannual Cattle Inventory Report Expectations

Avg. trade guess


% of year-ago

All cattle & calves



Annual calf crop



Total Cows/heifers calved



beef cows/heifers calved



milk cows/heifers calved



Heifers 500 lbs. and over



Beef replacement heifers



Milk replacement heifers



Other heifers



Steers 500 pounds and over



Bulls 500 pounds and over



Calves under 500 pounds



Despite indications the cattle industry is in a rebuilding mode, beef supplies will remain very tight this year as all cattle and calves are expected to come in at 98.6% of year-ago and the 2013 calf drop is expected at 97.9% of year-ago.


IGC boosts projected world coarse grain and soybean supplies... The International Grains Council today boosted its projected 2013-14 world coarse grain stocks by 18 MMT to a total of 1.964 billion MT. The increase represents a 10% increase from a year earlier and consists of an 8% rise in world wheat supplies and an 11% increase in world corn supplies. Total world ending stocks are expected to rise by 54 MMT, 16%, as a result of the increase in production.

The London-based analytical firm also revised its projected 2013-14 soybean supplies to a record 288 MMT. Total world trade is seen rising 12% to an all-time high, driven primarily by China. IGC left projected soybean ending stocks unchanged, however, at 29 MMT, which is 3 MMT, 11.5%, higher than the previous year. Click here for more.


Drought monitor reflects spreading drought... According to the National Drought Monitor, drought covers 56.25% of the contiguous U.S., which is up from 53.37% last week. Slight deterioration was noted across the Midwest, with larger increases in the drought area noted across the South and West. The monitor notes during the past seven days, an amplified ridge dominated weather conditions across the western third of the contiguous U.S., while a broad trough prevailed over the central and eastern thirds of the country. Click here for related maps.


Senate farm bill vote next Tuesday... Senate leaders were unable to get unanimous consent to move forward on the farm bill conference report (HR 2642) today. That means the final vote will likely come Tuesday, according to Senate Agriculture Chairwoman Debbie Stabenow (D-Mich.). "Basically we're filing the bill today. We'll have a cloture vote on Monday and then final passage will be sometime Tuesday," Stabenow said. "I expect a strong vote. There are folks who will oppose it, but I expect a very strong vote."


Limited impact from food stamp funding cuts... The soon-to-be-passed farm bill cuts food stamp funding by $8.645 billion but added back $645 million for various worker/pilot programs, for a net $8 billion reduction for the program. The bill provides a $200 million increase in financing to food banks. Most of the food stamp funding savings will come by tweaking federal "heat and eat" benefits that have been exploited in recent years by several states and the District of Columbia to boost how much money some people receive from SNAP/food stamps. The changes will require the states and D.C. to pay more in "heat and eat" money, a move that will reduce, but not eliminate, SNAP payments by about $90 monthly for about 850,000 households.

The farm bill also cuts SNAP funding by prohibiting USDA from spending money on television, radio and billboard ads to promote the program and on programs designed to recruit new beneficiaries. And in response to years of documented evidence of misuse and abuse of the program, USDA will need to ensure that illegal immigrants, lottery winners, college students and the dead cannot receive food stamps and that people cannot collect benefits in multiple states.


Stabenow could lead Senate Budget panel... Following what will soon be a Senate-passed farm bill conference report, Senate Ag Chairwoman Debbie Stabenow (D-Mich.) may become the top Democrat on the Senate Budget Committee next year, if current Chairwoman Patty Murray (D-Wash.) moves to Health, Education, Labor and Pensions, as expected. An expected shuffle among Democratic committee leaders would leave Stabenow in a good position for the Budget post. Get more details.


Vilsack shows no sign of holding off on COOL... While congress via the recent FY 2014 omnibus spending bill indicated it wanted USDA to wait until a coming World Trade Organization (WTO) ruling on country-of-origin labeling (COOL) to implement its May 24, 2013, rule, Vilsack is making no sign of holding off. The WTO is expected in March or so to rule on a COOL challenge by Canada and Mexico. Report language in the omnibus spending package urged USDA to hold off enforcement while the case is pending. "Well at this point and time I will tell you that we continue to remain confident that what we’ve done complies with the WTO instruction. Our view of this is that WTO instructed us to become more specific with the labeling, which we have done, and we’re going to vigorously defend this," Vilsack said. Learn more about the issue.

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