Evening Report (VIP) -- June 11, 2013

June 11, 2013 09:53 AM

CONSULTANT LOWERS PLANTED CORN ACREAGE PEG... Crop consultant Dr. Michael Cordonnier left his corn yield projection at 153 bu. per acre this week, but lowered his planted acreage estimate another 1.5 million acres. He now expects 3 million intended corn acres to either be switched to another crop or left unplanted due to ongoing planting delays. He now sees planted corn acreage at 94.28 million, harvested acres at 86.7 million and a crop of 13.26 billion bushels.

"Some of the corn also needs to be replanted due to being killed by standing water, so the unplanted corn acreage could end up being as high as 4 million acres," warns Dr. Cordonnier. He maintains a negative bias toward the crop, but says the crop could still do fairly well if the weather improves. He says there is only a 10% to 15% chance yields could be as high as 160 bu. per acre. He currently puts a 25% to 30% chance of yields slipping to 146 bu. per acre.

Dr. Cordonnier toured parts of Iowa and Illinois this past weekend. He says the corn crop was much more delayed than he expected -- about three weeks behind normal. The corn was generally yellowish green and stands were uneven.



CONSULTANT LOWERS SOYBEAN YIELD PROJECTION... With around 22 million intended soybean acres unplanted as of Sunday, Dr. Cordonnier says yield risk to the crop has increased. As a result he has lowered his soybean yield projection by 1 bu. per acre from last week to 42.5 bu. per acre.

Previously Dr. Cordonnier said he expected around half of the intended and unplanted corn acres to be switched to soybeans, but he left his planted soybean acreage estimate unchanged this week at 77.87 million, saying he is less confident soybeans will pick up additional corn acres due to the lateness of the planting season. He projects harvested acreage at 76.94 million for a crop of 3.26 billion bushels.



OIL WORLD SEES SHARP RECOVERY IN GLOBAL SOYBEAN CROP... Germany-based Oil World expects global soybean production to rebound by 18% in 2013-14 from the previous year to 284 MMT due to larger U.S. and South American crops if the weather cooperates. The group expects the U.S. to regain its place as the world's largest supplier with a crop of 92 MMT (3.38 billion bu.) this year, up from 82 MMT in 2012-13. Oil World expects Brazil to produce a crop of 84 MMT, up from 81.4 MMT last season.

Meanwhile, Oil World forecasts China's 2013-14 soybean crop to decline to 11.9 MMT from 12.6 MMT this year due to further reductions in acreage. As a result, the group expects Chinese soybean imports to rise by around 17% from the current year to as much as 68 MMT in 2013-14 (beginning August 2013).



USDA REPORTS TOMORROW... Traders will be focused on final position adjustments tomorrow morning ahead of USDA's Supply & Demand and Crop Production Reports, which are scheduled to be released at 11:00 a.m. CT. Full report details will be available on profarmer.com shortly after data is released. Click here for pre-report expectations.



MINNESOTA 2013 PREVENTED PLANT REPORTING TO FSA EXTENDED TO JULY 15... Unseasonably cool and wet weather has significantly delayed or prevented planting in many areas of Minnesota. USDA policy requires farmers who request prevented planting credit to report the applicable acreage to FSA on form FSA-578 (Report of Acreage) and file form CCC-576 (Notice of Loss) within 15 calendar days after the final planting date for the crop. Final planting dates vary by crop but are all typically well before the final acreage reporting date of July 15. For 2013, however, FSA has simplified the process by extending the various prevented planting acreage reporting deadlines for Minnesota to coincide with the final crop acreage reporting date of July 15, 2013. Prevented planting acreage reported after this date may be subject to late filing fees. NOTE: The extension of the signup for prevented planting applies ONLY to FSA paperwork and NOT to your crop insurance claim. The last dates for reporting to your crop insurance agent remain as always, within 72 hours of the last day of the late planting period.

Direct and Counter Cyclical Program (DCP) participants that claim prevented planting and don't plant a subsequent crop on that acreage are required to have an acceptable cover crop on all crop base acreage to protect the land from erosion. The cover crop cannot be hayed, grazed or otherwise harvested before Nov. 1, 2013. Get more details.



SNAP CUTS MEAN HOUSE FARM BILL PASSAGE QUESTIONABLE... It was always easy to predict the nearly $1 trillion farm bill would sail through the Senate. That chamber likes to spend money. Passage in the House is much less certain due to food stamp/SNAP funding cuts differences. The Senate came up with only $4 billion in cuts for a program that spends around 80% of all USDA funding. The pending House bill would cut $20.5 billion, a figure that will likely go higher via floor amendments. The food stamp difference is magnified when one considers that Democratic senators were not enthused about cutting $4 billion. Most of their House counterparts will not likely vote for a bill with at least five times the cuts. The reverse is true for Republicans – they think $20.5 billion is too low.

At one juncture, some House Democrats signaled around 70 Democratic House members will vote for the farm bill. Others put the tally at 30 to 35. Reuters reports that 134 out of 201 House Democrats have signed a resolution against any cuts to nutrition programs. Assuming those Democrats vote against the House farm bill, that leaves 67 Democratic votes. Either way, there will have to be an overwhelming number of Republicans votes in favor of the bill for it to pass the House chamber – lets say from 148 to 188. Impossible? No. But still hard to get.

Importantly, House Republican leaders want the farm bill to pass. Frankly, they have farm bill fatigue and want it out of the way well before 2014 elections. House Majority Whip Kevin McCarthy (R-Calif.) is expected to be surveying House Republicans this week to gauge support for the farm bill. And he's going to be helped by farm-state lawmakers and farm industry lobbyists. On the Democratic side, sources say Minority Leader Nancy Pelosi (D-Calif.) will not actively oppose the legislation – even though most think she will not vote for the measure due to the food stamp cuts. That may save a few Democratic votes. If the votes are not garnered to pass the bill in the House, GOP leaders will yank it from the floor. Learn more.



HYPOTHETICAL CONFERENCE FARM BILL MAY NOT BE A SOLO EVENT... Assuming the House approves the farm bill, there is also a lot of uncertainty about how a conference report can be worked out, especially regarding food stamp cuts, that will not upset Democratic and Republican lawmakers. Some veteran contacts say a farm bill conference report may not be a solo event. That is, it could be linked with a must-pass measure that could give lawmakers cover enough to get the report passed by both chambers.


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