Evening Report (VIP) -- June 4, 2013

June 4, 2013 10:08 AM

CONSULTANT LOWERS CORN YIELD, CROP PROJECTIONS... Crop consultant Dr. Michael Cordonnier lowered his national corn yield projection by 2 bu. per acre to 153 bu. per acre due to a "significant amount of corn" that will now need to be replanted. Dr. Cordonnier is also now estimating that 1.5 million intended corn acres will not get planted. As a result, it corn crop estimate was lowered to 13.47 billion bushels. "If this week ends up wetter than forecast, then the corn planted acreage will probably decline again next week, thus lowering the production estimate," he adds, saying he has a neutral to lower bias for the crop.

"It's already the first week of June and any corn planted from this point forward is going to have a significantly reduced yield capacity. Additionally, there will also be corn that needs to be replanted due to standing water and saturated conditions," says Dr. Cordonnier. "Even if the corn does not need to be replanted, saturated conditions can slow down the crop development, putting it even further behind its normal development. All this can make the crop more vulnerable to adverse weather during pollination and increased risk of not maturing in time to escape damage from an early frost."



CONSULTANT ALSO TRIMS SOYBEAN CROP PROJECTION... Dr. Cordonnier says yesterday's progress data from USDA signals there are still 5.26 million soybean acres in Iowa and 4.79 million acres in Illinois yet to be planted, which raises his level of concern about yields. As a result, he trimmed his national average soybean yield projection by 0.2 bu. per acre to 43.5 bu. per acre.

Previously, Dr. Cordonnier had stated he expected around two-thirds of unplanted corn acres to be switched to soybeans, but he has lowered that to around half of unplanted corn area due to increased talk about prevent-plant claims. "Therefore, if 1.5 million acres of corn does not get planted, I am going to give 750,000 acres to soybeans," he says, noting that would result in U.S. planted soybean acreage of 77.87 million acres for a crop of 3.34 billion bu., (assuming a 98.8% harvested acreage rate).

Dr. Cordonnier says he has a neutral to lower bias for the soybean crop. "Soybeans planted in early June can still achieve a trendline yield if the weather during the remainder of the summer cooperates, but the odds are increasing the later-planted soybeans could have lower yields," he says. "The weather during the next two weeks will be critical for the soybeans. If it would dry off enough to get the remainder of the soybeans planted before June 15, then the yield damage caused by late planting may be limited. In contrast, if we are still planting soybeans past the middle of June, then the yield drag could be much greater."



NWS 6-10 DAY FORECAST: MIX OF PRECIP AND TEMPS FOR CORN BELT... The National Weather Service (NWS) forecast for June 10-14 calls for below-normal precip across the bulk of the western Corn Belt, with above-normal precip expected across Indiana and Ohio. Eastern Iowa, Missouri and Illinois are expected to see normal precip during the period. Above-normal temps are forecast for the western halves of Nebraska, Kansas and the Dakotas, with below-normal temps anticipated across the eastern Corn Belt. The central Belt is expected to see normal temps. Click here for related maps.



AUSSIE SCIENTISTS: LA NINA POSSIBLE BY YEAR-END... The Australian Bureau of Meteorology says all indicators reflect a neutral ENSO situation, but there is a possibility La Nina could develop later this year. "In the tropical Indian Ocean, warmer-than-average ocean temperatures have persisted in the east, while in recent weeks, ocean temperatures in the western Indian Ocean have cooled slightly," notes the bureau. "As a result of this pattern, the Indian Ocean Dipole (IOD) index has been below -0.4 since mid-May. If this index remains at or below -0.4 until late July, 2013 will be classified as a negative IOD year."



CME GROUP TO LAUNCH NEW KCBT WHEAT OPTIONS CONTRACTS... CME Group today announced it will introduce three new options on Kansas City Board of Trade (KCBT) hard red winter wheat futures contracts: KCBT weekly wheat options, KCBT-CBOT wheat spread options and MGEX-KCBT wheat spread options. Pending review by the Commodity Futures Trading Commission, these will be available on July 1. This is the same date that the recently acquired KCBT wheat futures and options contracts will transition to CME Group's Chicago trading floor.


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