Evening Report (VIP) -- May 30, 2013

May 30, 2013 10:24 AM
 

NWS 6- TO 10-DAY OUTLOOK: CORN BELT STAYS WET... The National Weather Service (NWS) forecast for June 5-9 calls for a large area of above-normal precip over Iowa, Illinois, Missouri, eastern Kansas, eastern Nebraska the southern half of Minnesota, Wisconsin and northwestern Indiana. The far eastern and far western edges of the Corn Belt are expected to see normal precip during the period. The temp outlook is varied, with below normal readings likely across the Dakotas, Nebraska, Kansas, far northwestern Missouri, the western half of Iowa and all but far eastern Minnesota. Normal temps are forecast for eastern Iowa, most of Missouri, Illinois Wisconsin and far western Indiana. Above-normal temps are expected to be seen across the eastern two-thirds of Indiana and Ohio. View the maps.

 

MAJOR DROUGHT REDUCTION FOR UPPER MIDWEST... According to the National Drought Monitor, 43.13% of the contiguous U.S. is now free of drought, up from 39.06% last week. Heavy rain in the Northern Plains and Upper Midwest eased or eradicated drought, but it also led to flooding. "By late May, minor to moderate flooding was underway at nearly 100 river gauges in the western Corn Belt, with major flooding occurring in a few locations," the Drought Monitor details. The heaviest precip (locally 4 inches or more) during this period cut across southeastern South Dakota and northwestern Iowa. As a result, some locations saw a two-category reduction from severe drought to lingering subsoil moisture shortages.

The Upper Midwest is now 89.83% drought-free, compared to 80.68% last week and 28.14% at the start of the year. In Minnesota, 59.82% of the state is now drought-free, compared with just 19.96% last week. Iowa saw a 16.58-percentage-point reduction in drought coverage last week; 81.08% of the state is now drought-free. See the maps.

 

GRADIENT BETWEEN DROUGHT AND NON-DROUGHT AREAS SHARPENS IN THE PLAINS... In the Plains, the divide between improving and worsening drought conditions continues to sharpen, with major improvement being seen across the northern half of the region. "In South Dakota, the portion of rangeland and pastures rated 'good' to 'excellent' rose to 30% on May 26, up 16 percentage point from week-ago. Similarly, South Dakota’s rangeland and pastures rated 'very poor' fell from 51% to 29% during the week ending May 26," the Monitor notes, explaining that the amount of change was the highest for the nation.

Farther south, little to no rain fell in the central and southern High Plains; thus, exceptional drought persisted for these regions. "Rain came too late for winter wheat in South Dakota (64% very poor to poor on May 26) and Nebraska (52%), and the maturing crop continued to suffer in parts of Texas (76%), Oklahoma (54%), Colorado (49%) and Kansas (45%)," the Monitor details. "From late March to early May, several freezes further damaged an already drought-stressed wheat crop on the southern High Plains," the Monitor continues. But as the drought-monitoring period progressed, local downpours did develop in Texas. Learn more.

 

WEEKLY ETHANOL PRODUCTION DECLINES... Ethanol production last week declined 12,000 barrels per day (bpd) to the 863,000 bpd, but that was still 3,000 bpd above the five-week average, according to data from the U.S. Energy Information Administration. Weekly ethanol stocks also declined by 135,000 barrels to 16.05 million barrels -- the fifth week in a row of declining stocks. Idled ethanol plants have resumed operations and margins have improved in recent weeks. Thus, today's pullback from the highest weekly output since June 2012 in last week's report, is not concerning.

 

2012 CROP INSURANCE PAYOUTS EDGE CLOSER TO $17.3 BILLION... U.S. crop insurance indemnities stand at $17.295 billion as of May 27, adding to the record level of payouts under the program, according to Risk Management Agency (RMA) data. Payouts on corn, at $11.770 billion, are now nearly $1 billion above the prior record payout year for the entire program of $10.8 billion for 2011 crops.

The loss ratio for 2012 crops is at 1.56 -- for each $1 in premiums paid in, $1.56 in indemnities has been paid out. However, this marked the first year that the loss ratio for the program has been above 1.0 since the 2002 crop year.

For 2013 crops, USDA reports that there are 89.616 million net insured acres so far compared to 88.790 million acres at this point last year. Net acres insured for 2012 crops stand at a record level of 282.462 million. Get more details.

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