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Evening Report (VIP) -- July 18, 2013

15:12PM Jul 18, 2013

NWS 6- TO 10-DAY FORECAST: WET IN THE EASTERN BELT... The National Weather Service forecast for July 24-28 calls for above-normal rainfall across the eastern Corn Belt as well as the eastern edge of Iowa and the eastern half of Missouri, while the outlook for the rest of the Corn Belt is for normal precip. The temperature outlook is varied for the Corn Belt. Normal temps are expected for the eastern quarter of the Dakotas, Minnesota, Iowa, the western half of Wisconsin, Illinois, Indiana and southern Ohio. West of these states is expected to to experience above-normal temps, while the Great Lakes region is forecast to see below-normal precip. See the maps.



EXTENDED FORECAST CALLS FOR MOSTLY 'EQUAL CHANCES' ACROSS CORN BELT... The National Weather Service 30- and 90-day weather outlooks for the Corn Belt are about as noncommittal as it gets -- a virtual "punt" on the temperature and precip forecasts. Equal chances of normal-, above-normal and below-normal precip and temps are forecast across the bulk of the region for August through October. On the temperature maps, a large mass of above-normal conditions is expected to the west of the Corn Belt, with the warmer-than-normal readings expected to creep into Nebraska and Kansas. Otherwise, the rest of the Corn Belt has "equal chances" on temps. On the precip maps, "equal chances" encompass the entire Corn Belt, though there's a big bubble of above-normal rainfall forecast to the southeast of the region.



DROUGHT EXPANDS ON THE PLAINS & MIDWEST... According to the National Drought Monitor, 54.39% of the contiguous U.S. is now covered by some form of drought, up from 52.38% last week but down from 79.98% a year ago. The rise in the area covered by drought came as drought conditions expanded in the South with 73.47% of the region now covered by some form of drought. Several inches of rain fell over central Oklahoma to north-central Texas last week, the monitor reports. But unfortunately, much of this rain fell in areas that were already drought-free. Drought or abnormal dryness expanded in other areas of Texas as well as eastern Oklahoma. Drought conditions are also on the rise for the Midwest and the High Plains. The Drought Monitor reports 7.16% of the Midwest is in some form of drought, up from 2.68% last week. For the High Plains, 78.01% of the region is covered in some sort of drought, up 2.15 points from week-ago.

Dry weather and warm temps resulted in the expansion of abnormally dry conditions in Missouri and Iowa as well as in eastern sections of Kansas and Nebraska. Moderate drought expanded in northeast Kansas, while western Nebraska saw more areas succumb to moderate to severe drought. The monitor explains that based on USDA data, "the percent of topsoil short or very short in Arkansas grew from 62% statewide July 7 to 68% July 14, but the percentage increased rapidly in Missouri (from 23% to 53%) and Iowa (12% to 35%). Top soil conditions also worsened in Nebraska, going from 53% to 62%, and Kansas (68% to 74%)." Southwest South Dakota saw a contraction in the amount of land rated in severe drought, but abnormally dry and moderate drought conditions expanded in other areas of the state. Several inches of rain in northern Minnesota helped reduce the drought profile in that area of the state. Click here to view the maps.



COF REPORT EXPECTED TO AGAIN SHOW FEWER PLACEMENTS... The string of Placements topping year-ago was broken in last month's Cattle on Feed Report. Traders are again looking for lighter-than-year-ago Placements in this month's update, as pasture conditions have improved enough in most areas to encourage cattle producers to keep animals on grass longer and out of feedlots as long as possible. While all analysts surveyed by Dow Jones newswire expect Placements to come in under year-ago, the guess range is just over 10 percentage points, suggesting this will still be the key category in the report.

The average pre-report guesses see On Feed down 3%, Placements down 5.1% and Marketings down 5.3% from year-ago.

Report expectations

Avg. Trade Guess


% of year-ago levels

On Feed











KC FED PRESIDENT SEES ONLY SLIM CHANCE OF FARMLAND BUBBLE... Throughout the run-up in farmland values, the Federal Reserve Bank of Kansas City has been a consistent and vocal voice of caution and warnings concerning a potential farmland bubble. Those warnings came initially from former Bank President Thomas Hoenig and continued under current President Ester George. That's why it comes as a bit of surprise that President George now lists as slim the possibilities of a 1980s-stlye debt and farmland bubble. Get more details.