WEATHER MODELS IMPROVE WEEKEND RAINFALL CHANCES... Meteorologists say midday weather models reflected improved rainfall chances for the weekend across the Corn Belt. While models are not in total agreement about how much rain will be seen, they are in agreement that nearly all the Corn Belt will benefit from at least light showers, with heavier rains expected in the eastern Corn Belt. The difference in the forecast is the speed at which the storm moves across the region.
Meteorologist Gail Martell of MartellCropProjections.com favors the GFS model, which is one of the wetter models. "Even though the cool front would sink rapidly south through the Midwest, it is still capable of triggering strong thunderstorms. The atmosphere is very humid and unstable and is ripe for showers. It would not take too much lifting of humid, unstable air in a thunderstorm to promote heavy rainfall," she says.
U.S./JAPANESE OFFICIALS MEET ON GMO WHEAT SITUATION... A Japanese delegation and USDA officials are expected to wrap up meetings today regarding technical discussions surrounding the discovery of GMO wheat plants in Oregon. As a result of the isolated finding in late May, Japan halted imports of U.S. western white wheat, which they use for confectionery flour and tempura batter.
A USDA spokesman told reporters today the meetings are focused on answering Japanese officials' questions with a goal of restarting trade of U.S. western white wheat. Previously Japan has said it hoped to restart imports sometime in August.
WEEKLY ETHANOL PRODUCTION DECLINES... According to data from the Energy Information Administration, ethanol production the week ended July 12 of 876,000 barrels per day (bpd) was down 5,000 bpd from the previous week. Stocks of ethanol of 16.58 million barrels increased by 859,000 barrels from the previous week as gasoline use declined to 366.6 million gallons per day.
ARGENTINE AG MINISTRY SEES STRONG RECOVERY IN WHEAT PRODUCTION... The Argentine ag ministry today said it expects the 2013-14 wheat crop to increase by about 33% from last year's crop to 12 MMT. The ministry expected wheat acreage of 4 million hectares, which would be unchanged with its previous estimate in June. Planting efforts are currently underway.
Meanwhile, the ministry lowered its estimate of the 2012-13 Argentine soybean crop to 49 MMT, down from 50.2 MMT previously.
KEYSTONE XL PIPELINE MAY RAISE MIDWEST GAS PRICES... Advocates for the Keystone XL Pipeline have suggested completion of the project would lower Midwest gasoline pricing based on readily available Canadian tar-sands crude. But consumer groups now fear the pipeline will raise gasoline prices as Canadian exporters look to take advantage of Gulf ports and global pricing, bypassing the Midwest altogether. Pro Farmer Inputs Monitor reporter Davis Michaelsen has more available on this story at this link.
PF MIDWEEK MARKETING GAME PLAN UPDATE...
CORN: Hedgers and cash-only marketers are 100% sold in the cash market for 2012-crop. For 2013-crop, hedgers and cash-only marketers have 25% of expected 2013-crop production sold via cash forward contracts for harvest delivery. December corn futures are finding solid support around the $5.00 level, but are struggling to move much higher than that. We still feel price strength must be sold, especially if futures get back to the $5.75 area, but don't panic and make sales on price pressure.
BEANS: Hedgers and cash-only marketers are 100% sold in the cash market for 2012-crop. For 2013-crop, hedgers and cash-only marketers have 20% of expected 2013-crop production sold via cash forward contract for harvest delivery. Be prepared to advance new-crop sales on a challenge of the June high in November soybean futures. With traders starting to show a little more concerned with poor crop development in Iowa and southern Minnesota, don't panic and make sales on price pressure.
WHEAT: The demand side of the wheat market is perking up, but we don't feel the market has enough support to lead a price rally. Be prepared to advance new-crop sales on an extended price recovery rally. We need confirmation of a low before we look to reown a portion of new-crop sales for hedgers.
COTTON: Hedgers are 100% sold on 2012-crop in the cash market, with cash-only marketers 85% sold on old-crop. Cash-only marketers should be prepared to finish old-crop sales soon as the 2012-13 marketing year is coming to an end. For 2013-crop, hedgers and cash-only marketers have 50% of expected production sold via cash forward contract for harvest delivery. Hedgers also have 50% of expected production hedged in December cotton at 83.87 cents. We'll maintain this hedge coverage unless there's a shift in market fundamentals that dramatically changes the price outlook.
CATTLE: Until the boxed beef and cash cattle markets put in short-term lows, buying interest will be limited for live cattle futures. But fed cattle producers should continue to carry all risk in the cash market as seasonals point toward price strength and attitudes are improving. Feeder cattle buyers should be prepared to add long coverage as the market is signaling a low is in place and tight calf supplies point to higher prices. Our primary concern is the big premium futures already hold to the cash index.
HOGS: Hog producers have 50% of expected 3rd-qtr. production is hedged in Aug. lean hog futures at an average price of $97.67 1/2 and 25% of expected 4th-qtr. Production is hedged in Dec. lean hog futures at an average price of $82.12 1/2. If recent pressure on the cash market eases, be prepared to lift the 3rd-qtr. coverage. Also be prepared to heavy up the 4th-qtr. coverage on an upside push or signs a major top is in place.
FEED: Continue to carry corn-for-feed risk in the cash market for now. We don't want to chase the soybean meal market higher, but recent price action signals traders are showing greater concern about supply prospects.