Evening Report (VIP) -- March 21, 2013

March 21, 2013 09:50 AM
 

CATTLE ON FEED TO REFLECT (MUCH) TIGHTER SUPPLIES... Friday afternoon's Cattle on Feed Report is expected to reflect a tightening supply situation, with On Feed expected at 93.5%, Placements at 91% and Marketings at 92.7% of year-ago levels.

Report expectations

Avg. Trade Guess

Range

% of year-ago levels

On Feed

93.5

92.9-94.6

Placements

91.0

86.3-96.3

Marketings

92.7

91.2-96.0

The selloff in live cattle futures reduced producers' interest in placing cattle in February -- a trend that has continued in March. Plus, the availability of calf supplies for feedlot placement continues to tighten. If traders' average guess of On Feed numbers is in the ballpark, it would put inventories at 10.918 million head -- 738,000 fewer animals than just one year ago.

 

EXTENDED WEATHER OUTLOOK SIGNALS PLANTING DELAYS AHEAD... The National Weather Service's Climate Prediction Center (CPC) in its outlook for April calls for above-normal temps across the Dakotas, Minnesota, most of Iowa and the eastern Corn Belt, while chances are equal for normal, above- and below-normal precip across the bulk of the Central and Southern Plains. While the forecast signals more drought relief is ahead for those states, it doesn't paint a picture for an early start to the planting season.

The CPC's outlook for April through June calls for above-normal temps across most areas east of the Rockies, but the area of above-normal precip is expected to shift eastward to include most of Iowa, Missouri and the eastern Corn Belt. That leaves precip in question for Minnesota as well as the area from the Dakotas southward. Click here for related maps.

 

SEASONAL DROUGHT OUTLOOK SUGGESTS TIMELY WESTERN CORN BELT RAINS WILL BE NEEDED THIS GROWING SEASON... The CPC signals in its Seasonal Drought Outlook that further drought improvement is expected across the Dakotas, Minnesota and Iowa, while drought is expected to remain in effect with some improvement across Nebraska, Kansas and the eastern half of Oklahoma. Meanwhile, drought is expected to persist across Texas and the Southwest.

The outlook suggests the drought footprint across the Corn Belt will continue to shrink but that drought will linger in Nebraska and the Central and Southern Plains. As forecasters have signaled recently, there will be enough moisture to get the crop started this spring, but areas of the western Corn Belt will need timely rains to sustain crops as deep soil moisture reserves have not been replenished. The forecast does not paint a rosy picture for the HRW wheat crop, either. Click here to view the map.

 

IGC MAKES MINOR CHANGES TO GLOBAL STOCKS PEGS... The International Grain Council (IGC) made only minor revisions to its global grain and soybean carryover projections from last month. It projects 2012-13 total grain carryover down 1 MMT from last month at 325 MMT (366 MMT last season), with wheat carryover up 1 MMT to 177 MMT (197 MMT last season) and corn carryover steady at 114 MMT (131 MMT last season). It projects global soybean carryover down 2 MMT from last month to 26 MMT (23 MMT last season). For 2013-14, IGC expects around a 5 MMT increase in global wheat stocks from this season, while global corn stocks are projected to rebound sharply.

 

HOUSE CLEARS FY 2013 FUNDING BILL, ENDING MEAT INSPECTOR FURLOUGH DRAMA... As expected, the House cleared the Senate version of FY 2013 spending bill that included money to avoid meat inspector furloughs today. The $984 bill to keep the government running through the end of fiscal year 2013 passed by a vote of 318 to 109. The bill is now headed to the president's desk for his signature.

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