Evening Report (VIP) -- March 10, 2014

March 10, 2014 10:00 AM

USDA reports spur stepped-up selling in grain markets.. While there were no major surprises released by USDA in its March Supply & Demand Report, grain and oilseed traders used the data to extend early losses. Below are additional details on global crop production based on information released today by USDA's Foreign Ag Service (FAS). Click here for Pro Farmer's full report reaction.


USDA revises Weekly Export Inspections Report... Around midday USDA corrected its Weekly Export Inspections Report, which was released at 10:00 a.m. CT. It incorrectly stated weekly soybean export inspections totaled 1,505,206 MT. USDA later lowered the tally to 1,079,967 MT, which was still above traders' expectations. Click here for the corrected inspections report.


USDA trims Paraguay bean crop... USDA lowered its estimate of the Paraguay soybean crop by 1.2 MMT from last month to 8.1 MMT due to lower harvested area and because of a 7.3% reduction in yield from last month. It notes "above-average yields" were reported at the beginning of harvest, but yields dropped as damage from the extreme heat was revealed.

Also this morning, USDA trimmed its Brazilian soybean crop estimate by 1.5 MMT to 88.5 MMT due to a 1.7% drop in yield from last month due to "hot and dry conditions in southern Brazil." Additionally, USDA's Foreign Agriculture Service (FAS) notes, "Nationally, yields are estimated at 3.02 tons per hectare, down from 3.05 tons per hectare estimated from last month, but up from 2.96 tons per hectare estimated for last year. Despite concerns about Asiatic soybean rust and old world bollworm, farmers have been well-equipped to handle these pests, albeit at higher costs."


USDA raises 2013 Chinese corn crop... USDA raised its 2013 Chinese corn crop estimate by 730,000 MT from last month to a record 217.7 MMT. FAS says the revision is based on official government data released by the National Bureau of Statistics. "China’s corn area has increased significantly (up almost 5 million hectares since 2009-10) in response to its rising demand for feed grains and government policies that supported grain production," says FAS.

"Profits for corn were higher than for competing crops such as soybeans and cotton, which lost area as farmers shifted to corn," adds FAS. "The weather was generally favorable on the North China Plain and the main production areas of Northeast China during the 2013-14 growing season. High yields in these areas offset yield losses caused by severe flooding in Heilongjiang and summer drought in central and southern China."


USDA raises cash steer and hog price projections... In this morning's Supply & Demand Report, USDA raised its 2014 cash steer and hog price projections from last month, citing tight supplies and strong demand for cash supplies as reasons for the increase. USDA raised its average cash steer price by $6 from last month to an average of $142, which compares to nearly $126 in 2013. USDA raised its average cash hog price by $4 from last month to an average of $67, up nearly $3 from 2013.

USDA trimmed its 2014 pork production forecast slightly from last month to stand just marginally above 2013. USDA doesn't specifically make note of the porcine epidemic diarrhea virus (PEDV), but instead says, "Pork production is reduced from last month as higher carcass weights are insufficient to offset tighter supplies of hogs. USDA will release the Quarterly Hogs and Pigs report on March 28."

Meanwhile, USDA raised its 2014 beef production forecast slightly from last month; it now stands 4.6% below 2013 levels. It notes "continued relatively large cattle placements in the first quarter are expected to result in higher slaughter in 2014. Coupled with heavier carcass weights and higher expected first-quarter cow slaughter, the beef production forecast is raised."

USDA raised its 2014 beef export forecast by 100 million lbs. from last month due to strong Asian sales, but it lowered its 2014 pork export forecast slightly as it says high prices are expected to constrain sales. But USDA still sees growth in pork exports compared to 2013.


More rains headed to Argentina... Meteorologist Gail Martell of MartellCropProjections.com says the forecast calls for another wave of heavy rains later this week across Argentina's grain belt. She says cooler-than-normal temps are also expected to prevail across Argentina and interior Brazil.

"Showers would spread up into south Brazil, improving pod filling in Rio Grande do Sul for soybeans," says Martell. "Parana soybean farms affected by intense summer drought are expected to receive very heavy rainfall 2.5 to 4 inches."

Meanwhile, Martell says a drier forecast for Mato Grosso will allow for soybean harvest and promote second-crop corn planting. Click here for related maps.


USDA: Warmth ushers some European crops out of dormancy early... USDA's Joint Ag Weather Facility says unseasonable warmth in February ushered winter crops out of dormancy up to a month earlier than usual from Germany and western Poland southeastward into the Balkans. Meanwhile, it says warmth encouraged rapid early-season growth of wheat in France, with localized flooding reported in the United Kingdom.

USDA also notes that warm and dry weather encouraged early spring grain planting and winter crop greening in the southernmost regions of the FSU-Western area. "By month's end, the region's typically deep snowpack had melted up to a month ahead of normal in central and western crop districts." Read additional global weather highlights.


USDA announces efforts to support small and mid-sized farmers and ranchers... In remarks at the National Farmers Union National Convention today, USDA Secretary Tom Vilsack detailed new and expanded efforts to connect small- and mid-sized farmers and ranchers with USDA resources that can help them build stronger businesses, expand to reach new and larger markets, and grow their operations. The press release notes, "Efforts include improved access to USDA resources, revised risk-management tools that better fit the needs of smaller producers, additional support for hoop houses and expanded collection of valuable market news information. USDA is also introducing a series of education tools focusing on opportunities for farmers engaged in local and regional food systems. In addition, USDA field staff will be boosting their outreach efforts to small and mid-sized farmers and ranchers." For more specifics on this, click here.

USDA says it will release more information on the tools and resources available to small and mid-sized farmers in the months ahead, including information about access to capital, risk management, food safety and locating market opportunities on USDA's Small and Mid-Sized Farmer Resources webpage.

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