ARGENTINA ENACTS SUPPLY LAW, ENABLING GOV'T WHEAT SEIZURE... In "First Thing Today" we alerted you that Argentina may confiscate wheat supplies amid surging domestic bread and flour prices. This morning, Argentina's government invoked what is known as Supply Law, a government resolution that requires wheat and flour producers to "take the necessary commercial actions to adequately supply the domestic market," according to a story by Reuters. The resolution goes into effect today. Failure to comply with the measure entails government penalties such as seizure of grain, closure of plants, fines or even imprisonment.
CPC: ENSO-NEUTRAL FAVORED INTO FALL... The National Weather Service's Climate Prediction Center (CPC) gives 60% or greater odds that ENSO-neutral conditions will continue into the fall. It says during June, below-average sea surface temperatures (SST) prevailed in the eastern Pacific, while near-average SSTs persisted across the rest of the equatorial Pacific.
Collectively, it says atmospheric and oceanic conditions were consistent with ENSO-neutral conditions. "Most model forecasts continue to indicate ENSO-neutral condition into the Northern Hemisphere winter 2013-14. The statistical model forecasts remain cooler in the Nino-3.4 region relative to the dynamical models forecasts. The forecast consensus favors ENSO-neutral (near 60% [odds] or greater) into the Northern Hemisphere fall 2013," it adds.
HIRING PICKS UP IN JUNE... This morning's employment report from the Department of Labor showed hiring picked up in June, with 195,000 non-farm payrolls added. This was above expectations of 165,000 jobs being added. The unemployment rate was unchanged at 7.6%, largely because the participation rate increased, which is a sign confidence in the jobs market is building.
Employment rose in leisure and hospitality, professional and business services, retail trade, health care and financial activities. In June, the number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 4.3 million. These individuals accounted for 36.7% of the unemployed. Over the past 12 months, the number of long-term unemployed has declined by 1.0 million.
The U.S. dollar index extended what were already sharp gains on the jobs data.
DROUGHT WORSENS ACROSS SOUTH... According to the National Drought Monitor, 50.89% of the contiguous U.S. is covered by some form of drought, which is around a one-percentage-point improvement from last week. Still, slight drought expansion was noted across the South, while very minor improvement was noted across the West and High Plains.
In its outlook through the weekend, the monitor notes the forecast favors wet weather across most of the eastern half of the nation, with heavy rains forecast from the Gulf Coast to the Central Appalachians and portions of the Northeast. "Some rains associated with the southwest monsoon are also likely during the next five days. Generally, less than 1.0 inches of rain is forecast across the Great Plains and Pacific Northwest," notes the monitor. Click here for related maps.
LIVESTOCK DRIVERS GRANTED WAIVER FOR NEW 'HOURS OF SERVICE' RULE... The Department of Transportation's Federal Motor Carrier Safety Administration (FMCSA) said it will grant a 90-day waiver from a new hours-of-service rule for drivers transporting livestock and poultry. The waiver is expected to be published in the Federal Register next week and the FMCSA has indicated it will develop a permanent exemption from the rule for livestock transporters.
Effective July 1, the rule requires truck drivers to take a 30-minute rest break for every eight consecutive hours of service. For drivers hauling livestock, the hours of service would include time loading and unloading animals. Livestock groups petitioned the FMCSA for a 90-day waiver, saying it would "cause livestock producers and their drivers irreparable harm, will place the health and welfare of the livestock in their care at risk and will provide no apparent increased benefit to public safety (and will likely decrease public safety) while forcing the livestock industry and [its] drivers to choose between the humane handling of animals or complying with a FMCSA regulation requiring a 30-minute rest break."
National Pork Producers Association President Randy Spronk said, "This decision will help ensure the continued humane treatment and welfare of livestock while traveling on the nation's highways. By granting the 90-day waiver, the FMCSA will ensure that during hot summer months livestock won't be sitting in the sun for extended periods, with drivers unable to care for them because they're required to take a 30-minute break."
FARMLAND MARKET IN TRANSITION... The farmland market appears to be in transition, moving from the hot demand-fueled market of late 2012 into a more stable market. Recent surveys conducted by the Federal Reserve Banks of Chicago, Kansas City and Minneapolis tend to confirm this trend. These banker surveys reflect continuing gains in the value of farmland during the first quarter of 2013, but the rate of increase is at a slower pace compared to the last quarter of 2012. Click here for more from LandOwner Editor Mike Walsten.
U.S. AG TRADE SURPLUS FALLS UNDER $1 BILLION... The value of U.S. ag exports in May was at $10.353 billion against imports of $9.430 billion to result in the smallest monthly trade surplus since July 2007 when it was at $766 million, according to USDA data. The value of monthly exports was the smallest since July 2012 and marked the second consecutive monthly of exports valued under $11 billion, a mark they have bested so far in FY 2013. While slipping below the $1 billion mark on a monthly basis, the accumulated trade surplus for FY 2013 is at $29.432 billion, ahead of the $23.448 billion pace seen at this point in FY 2012. The trade surplus for FY 2012 finished at a record level of $42.873 billion.
The value of U.S. ag imports has been above $9 billion for the past three months (March-May), the first time that has happened, according to USDA data. To view associated charts, click here.
While U.S. agriculture maintains a trade surplus and will finish FY 2013 with a surplus, the rise in the value of imports reflects a steadily improving U.S. economy and a slow rise in the value of the U.S. dollar, making imports more cost effective and potentially limiting U.S. exports.