Evening Report (VIP) -- July 11, 2013

July 11, 2013 10:02 AM
 

NO MAJOR SURPRISES FROM USDA'S REPORTS... There were no major surprises in USDA's Crop Production and Supply & Demand Reports this morning. Though immediate price action after the data was released was volatile, trade quieted this afternoon. The biggest surprise came on wheat. While USDA raised the size of the wheat crop more than traders expected, they trimmed 2013-14 U.S. carryover from last month and also cut 2013-14 global wheat ending stocks, which are now seen down year-over-year. That's key as the wheat market tries to post a price recovery. Click here for full report details.

 

HOUSE PASSES FARM POLICY-ONLY FARM BILL... After hours of testy debate, the House passed the farm policy-only version of its farm bill by a vote of 216-208. No Democrats voted in favor the bill while 12 Republicans voted against the measure. The bill did not include a nutrition title and it repeals the 1938 and 1949 Act as permanent legislation, replacing it with the new proposed Title 1 language.

Of note, the Administration has signaled it would veto the House bill (HR 2642) should it come across the president's desk. But this has been a typical approach of this administration -- issuing such a threat after it prods the GOP-led House to take action on bills. If a farm bill conference report ever is agreed to, sources say President Obama will sign it into law. Check "Inside Washington Today" for more farm bill updates.

 

DROUGHT SPREADS ACROSS SOUTH... According to the National Drought Monitor, 52.38% of the contiguous U.S. is covered by some form of drought, which reflects a two-percentage-point increase from last week. Drought increased by around eight percentage points from last week across the South to cover 68.88% of the region. Drought was expanded to cover much of Arkansas and northwestern Louisiana and also intensified across Oklahoma and Texas. Some drought expansion was also seen across Kansas. Click here for related maps.

 

USDA LOWERS 2013 CASH STEER PRICES, RAISES CASH HOG PRICE... USDA's outlook for the cash cattle market isn't as bullish as it was last month, as the 2013 cash steer price projection was trimmed by $2 to $125.50. Meanwhile, USDA raised its 2013 cash hog price by $2 to $62. Due to tightening cattle supplies, USDA's outlook is more bullish for 2014, as it projects the average cash steer price at $131.50, although this is down $1.50 from last month's projection. Larger hog supplies in 2014 are expected to lead to an average cash hog price of $60 in 2014, up $2 from last month.

 

CROP SCOUT TRAVELS ACROSS EASTERN CORN BELT... Seasoned Pro Farmer Midwest Crop Tour scout, Byron Jones of McLean County, Illinois, just returned home from a trip across a broad areas of the eastern Corn Belt. Following is his trip report:

"Just home from a trip to New York. North route had great corn all the way east, where as the soybeans had many yellow spots and were late in maturity. The south route also had good corn with no breaks until Champaign, IL. and then water damage. The soybeans showed late maturity and some water damage. At home the corn is just showing the tassel leaves on the first 20% and then the rest will pollinate the last week of July. The present rating is 9 (scale of 1 to 10) as we received a nice rain today of 1.3 - 2.7 inches. The soybeans have been average but they don`t like wet feet. Many blights will be coming since the tomatoes are now demanding spraying for blights. The soy rating is still 8 with varying development locally."

Click here to send a report on your crop conditions. Names will not be used, but please include your county and state.

 

NCGA GRUDGINGLY URGES HOUSE PASSAGE OF FARM BILL... While noting "disappointment" with House lawmakers' decision to sever the link between farm programs and nutrition programs as well as with the bills' commodity title and its repeal of the 1949 permanent law, National Corn Growers Association (NCGA) President Pam Johnson says "we see no other way to move the farm bill to conference with the Senate unless the House approves the bill before it today." Therefore, the NCGA urges members of the House to approve the bill. But NCGA reiterated this by no means reflects its approval of the the content or the manner in which the bill came to the floor. Therefore, NCGA says, "Unless significant change is made to the bill in the conference committee, we will strongly urge its rejection by the Senate and the House." Read the full statement.

 

CBO: FARM-ONLY BILL SAVES $12.9 BILLION OVER 10 YEARS... The updated score for the House's split farm bill showed the farm-only bill would cut $12.9 billion from the deficit over 10 years as compared to continuing current law, according to the Congressional Budget Office. This includes cuts of $18.7 billion to the commodity title and $4.8 billion from the conservation title. But $8.9 billion of the savings would be spent on crop insurance.

This bill is now separate from the nutrition title; thus CBO's score does not include its previously estimated $20.5 billion in savings, largely from the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps). This compares to estimated savings of $17.9 billion for the Senate-passed farm bill over a 10-year span based on CBO's May baseline. The Senate's bill cuts $3.9 billion from SNAP and $17.4 billion from the commodity title and $3.5 billion from the conservation title.

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