MARTELL: EL NINO SIGNAL EMERGING... Meteorologist Gail Martell of MartellCropProjections.com says the "suddenly stormy" weather pattern that has brought ample snowfall to the Plains and Midwest is consistent with an emerging El Nino signal. "With an El Nino effect, the February/April weather is wet and cool in the southern U.S., but warm in the northern U.S. and western Canada. The central U.S. is wet in wheat and corn states, but the eastern Corn Belt and Great Lakes are dry," she says.
Martell says a strengthening jet stream is expected to bring a second wave of heavy precip to the central U.S., including areas of the Southern Plains. This is helping to alleviate drought in the western Corn Belt and HRW Wheat Belt.
But cold temps have accompanied the snow, making spring planting feel a long ways off. Martell notes the frost-freeze line has sunk southward, extending across southern Kansas through central Missouri and then bending north across central Illinois into northern Indiana and Ohio. Click here for forecast specifics, including maps.
2012-CROP INSURANCE INDEMNITIES REACH $15.4 BILLION... U.S. crop insurance indemnities for 2012 crops hit $15.435 billion as of March 4, pushing the loss ratio for the program to a record 1.39, according to Risk Management Agency (RMA) data.
Payouts for corn now exceed $10.2 billion, just $600 million below the total payouts for the program on 2011 crops. The loss ratio for corn also rose, now at 2.36. Soybean payouts are closing in on $2 billion for 2012 crops, reaching $1.976 billion but the loss ratio only rose to .84. Click here for a complete table.
BRAZIL'S PLAN TO INCREASE BARGING STILL IN INITIAL STAGES... The National Agency for Water Transport in Brazil is in its initial planning stages for increasing barge traffic by 11% by the year 2020 in the six principle river systems in Brazil. South American crop consultant Dr. Michael Cordonnier says barging grain north to the Amazon River would be particularly beneficial for farmers in northern Mato Grosso where fields are as far as 1,500 miles from the main Brazilian ports in southeastern Brazil.
"Barging the soybeans to the Amazon River would reduce those costs significantly and allow profitable soybean production at lower prices. Many farmers in Mato Grosso have stated that they have been lucky the last few years to have very strong soybean prices at the same time that transportation costs have soared," says Dr. Cordonnier. "They are worried that soybean production could become unprofitable if prices fall but transportation costs remain high."
ECONOMIST: PORK PRODUCERS' OPTIMISM FOR PROFITABILITY 'ON HOLD'... Purdue University Ag Economist Chris Hurt says pork producers' optimism for a return to profitability this spring is "on hold" until feed prices can moderate later in the summer. Hurt has lowered his second-quarter cash hog price forecast to an average of $66 to reflect a loss of around $4 per hundredweight. He expects near-steady prices in the third quarter, but says if corn and soybean meal prices continue to soften, producers could break even by late-July or August.
Noting recent demand concerns, Hurt says, "Recent bearishness points out at least two important features of the current hog outlook. The first is that having exports at 23% of (total production).... is wonderful when everything goes well. The downside is that such a high percentage makes prices vulnerable when trade issues can have large impacts on prices and trade issues are often out of the industry's control. The second ongoing lesson is that much of the pork outlook is still to be determined by weather this spring and summer. Thus, pork producers' multi-year plans should probably stay on-hold for another four or five months."