Evening Report (VIP) -- July 30, 2012

July 30, 2012 09:56 AM
 

PACE OF CORN CONDITION DETERIORATION SLOWS... USDA reports the condition of the crop continues to decline, but at a slower pace. USDA reports 24% of the crop in "good" to "excellent" shape, which is down two percentage points from last week -- not quite as much deterioration as traders expected. USDA now rates 48% of the crop in "poor" to "very poor" shape compared to just 14% last year at this time.

Corn

very poor

poor

fair

good

excellent

This week

23

25

28

21

3

Last week

21

24

29

23

3

Year-ago

5

9

24

46

16

 

USDA reports 37% of the crop is in dough stage compared to 22% last week and 17% on average. Illinois is at 58% (32% on average); Indiana is at 41% (14% on average); and Iowa is at 36% (4% on average). USDA reports 13% of the crop is dented compared to 6% last week and 3% on average.

 

 

SOYBEAN CONDITION DECLINES AS EXPECTED... USDA reports both the "good" and "excellent" categories declined by one percentage point with only 29% of the crop now rated in the top two categories, which was as traders expected. USDA now rates 37% of the crop in "poor" to "very poor" shape, which is down a like amount, but compares to just 12% last year at this time.

Soybeans

very poor

poor

fair

good

excellent

This week

15

22

34

26

3

Last week

13

22

34

27

4

Year-ago

3

9

28

46

14

 

USDA reports 55% of the soybean crop is setting pods compared to 36% last week and 35% on average -- signaling the crop is about a week more advanced than normal. Illinois is at 61% (36% on average); Indiana is at 51% (26% on average); and Iowa is at 57% (47% on average). Timely rains would still help soybeans fill pods, but very little meaningful precip is in the forecast for the first half of August.

 

 

SPRING WHEAT HARVEST PASSES ONE-QUARTER MARK... USDA reports as of Sunday that 28% of the nation's spring wheat harvest was complete compared to 12% last week and 3% on average. Leading the way is South Dakota with 82% harvested (15% on average), followed by Minnesota at 52% (4% on average).

Meanwhile, the condition of the crop improved, with 63% now rated "good" to "excellent," an increase of three percentage points from last week.

Spring Wheat

very poor

poor

fair

good

excellent

This week

2

9

26

51

12

Last week

2

9

29

51

9

Year-ago

2

5

23

56

14

 

 

COTTON CONDITION DECLINES... USDA reports the condition of the cotton crop declined, with 44% rated "good" to "excellent," which is three percentage points lower than last week. But condition ratings continue to trend above year-ago, when just 30% of the crop was rated in the top two categories.

Cotton

very poor

poor

fair

good

excellent

This week

6

16

34

35

9

Last week

5

13

35

37

10

Year-ago

22

18

30

25

5

 

USDA reports 59% of the crop is setting bolls compared to 47% last week and 56% on average. The most advanced crop is in Louisiana, where 96% is setting bolls (91% on average), followed by Arkansas at 95% (92% on average).

 

 

NWS 6-10 DAY FORECAST: CHANCE FOR EASTERN CORN BELT RAIN... The National Weather Service (NWS) forecast for August 5-9 calls for above-normal temps across the Corn Belt, along with above-normal precip for northern Illinois, most of Indiana and all of Ohio. Below-normal precip is expected in Nebraska, while normal precip is likely in Iowa. The forecast for above-normal temps is most worrisome, as it increases moisture requirements at a time when soybeans are trying to fill pods. Click here to view related maps.

 

 

LIVESTOCK COALITION PETITIONS EPA FOR ONE-YEAR RFS WAIVER... A coalition of meat and poultry groups today asked the U.S. Environment Protection Agency (EPA) to waive the federal manage for the production of corn-based ethanol. In the petition delivered to EPA Administrator Lisa Jackson, the coalition asked for a waiver "in whole or in substantial part"; of the amount of renewable fuel that must be produced under the Renewable Fuels Standard (RFS) for the remainder of this year and for the portion of 2013 that is one year from the time the waiver becomes effective.

Members of the coalition that signed the petition include: American Feed Industry Association, American Meat Institute, American Sheep Industries Association, California Dairy Campaign, Dairy Producers of New Mexico, Dairy Producers of Utah, Idaho Dairymen's Association, Milk Producers Council, National Cattlemen's Beef Association, National Chicken Council, National Pork Producers Council, National Turkey Federation, Nevada State Dairy Commission, North American Meat Association, Northwest Dairy Association, Oregon Dairy Farmers Association, Southeast Milk Inc., United Dairymen of Arizona and the Washington State Dairy Federation.

Reacting to the news, the National Corn Growers Association (NCGA) says it's premature for such a move, adding that the ethanol industry now has a significant surplus of ethanol and RFS credits (RINs) that can greatly offset ethanol's impact on the corn supply. "However, we recognize the severe impact of the drought on our farmers and our customers, here and abroad, with livestock, poultry, ethanol and other processing facilities, and we believe the flexibility of the RFS does work, and will work. NCGA also supports the waiver process that is embodied in the current RFS, and respects the right of those that may file a waiver petition to do so," states the group in a press release.

PF perspective: EPA will definitely wait until after USDA's first survey-based estimate of the corn crop on Aug. 10 before ruling on the waiver and most contacts don't expect any decision prior to the Nov. 6 presidential election. We'll continue to check with our sources at EPA, USDA and the Department of Energy to see if the tenor based on prices and the supply outlook changes this fall, but a quick decision is unlikely and this appears to be more of a 2013 issue at this time. Click here for more, including a link to the petition for waiver.

 

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