Evening Report (VIP) -- May 31, 2013

May 31, 2013 09:59 AM
 

USDA'S RMA WILL NOT EXTEND PREVENT PLANT DATES... Heavy Midwest rains prompted rumblings that USDA was considering an extension of the final planting dates for corn relative to the federal crop insurance program, but a USDA Risk Management Agency contact says no consideration is being given to pushing back the final planting dates. "Those dates are part of the insurance contract between the insurance company and the producer, and the contract change date for 2013 corn and soybeans was Nov. 30, 2012. The late planting period rules are applicable to any crop planted after the final planting date," the contact says.

Agricultural Economist William Edwards and Farm Management Specialist Steve Johnson with Iowa State University Extension and Outreach offer this update: In Iowa, the crop insurance "late planting period" for corn begins on June 1. Corn can still be planted after this date, but the insurance guarantee on those acres is reduced by 1 percentage point per day until they are planted. Corn acres planted after June 25 will receive insurance coverage equal to 60% of their original guarantee. Producers should keep accurate records of planting dates on all remaining acres. The late planting period for soybeans is from June 16 through July 10 in Iowa.

 

CORN CROP OPTIONS... Next week, many producers with unplanted acres will have to choose between the following three options, with the input of a crop insurance agent:

  1. Plant corn as soon as possible with a reduced guarantee. (The insurance guarantee on those acres will decline 1 percentage point per day until they are planted during the "late-planted period.")
  2. Shift to soybeans with full insurance coverage.
  3. Apply for prevented planting. (Prevented planting acres are insured at 60% of their original guarantee and must have a cover crop established on them.)

Acres that have been planted but need to be replanted may qualify for a special replanting insurance payment. Payments are based on the value of 8 bu. of corn or 3 bu. of soybeans per acre, times their respective projected insurance prices.

Note: To qualify for prevent plant, a crop must be grown on the acreage at least one of the previous four years, according to the Prairie Pothole States Provision, which took effect with the start of the 2012 crop year. This provision includes the states of Iowa, Minnesota, Montana, North Dakota and South Dakota. Get more details.

 

EU RECOMMENDS TESTING U.S. WHEAT SHIPMENTS... The European Commission today recommended that member countries test shipments of U.S. soft white wheat following the discovery of unapproved GMO wheat plants in Oregon. The commission recommends test be conducted on wheat that had arrived or that is now in transit. If there's a positive test, the shipment would be held back from going to market, though EU officials failed to specify what would be done with that wheat. The commission has asked that USDA keep them informed of ongoing investigations into the matter.

 

NWS 6- TO 10-DAY: WET IN THE EASTERN CORN BELT... The National Weather Service's (NWS) outlook for June 6-10 is a bit more favorable for growers in the western Corn Belt. While the forecast for below-normal temps for the western half of Minnesota, Iowa and Missouri as well as the eastern half of the Dakotas and Nebraska is not ideal for drying out saturated soils, normal precip is expected for these states. The eastern Corn Belt, on the other hand, is expected to see normal temps but above-normal precip. This is especially concerning for Illinois, as the state received heavy rains this week. See the maps.

 

IGC RAISES 2013-14 GRAIN PRODUCTION FORECAST... The International Grains Council today raised its 2013-14 total grains production forecast by 10 MMT to 1.916 billion MT, which is a 130-MMT increase from year-ago. IGC explains, "Although there is continued uncertainty about harvest prospects in some major producers, global wheat availabilities are still set to be ample over the year ahead. Delays to planting due to overly wet weather in the U.S. have heavily influenced trade in maize (corn) and soybeans markets, with speculation over potentially lower yields and the possibility of some area switching. However, the prospect for still-bumper U.S. crops remained a mild underlying bearish influence for both markets."

IGC raised its global wheat production estimate by 2 MMT from last month to 682 MMT. Global wheat carryover is expected to total 180 MMT in 2013-14, which is down 1 MMT from month-ago but up 2 MMT from last year. The group projects global 2013-14 corn production at 945 MMT, which is up 6 MMT from its forecast last month. This would be an 89-MMT increase over the 2012-13 marketing year. Global soybean production is forecast at 267 MMT, which is up 2 MMT from its estimate last month and up 28 MMT from 2012-13. Get more details.

 

PF VIDEO: WET WEATHER DRAWS DOWN CORN ACREAGE PROJECTIONS... Pro Farmer Editor Chip Flory and Senior Market Analyst Brian Grete discuss how wet Corn Belt weather will impact planted corn acreage as well as the national average yield in this week's Pro Farmer Profit Briefing clip on AgDay TV. Watch it here.

 

MAJOR REPUBLICAN SUPPORT LIKELY NEEDED FOR HOUSE FARM BILL PASSAGE... Congressional sources signal that at this juncture, only around 30 to 40 Democratic members would likely vote for a farm bill with at least $20.5 billion in food stamp funding cuts. Rep. Collin Peterson (D-Minn.) recently noted concerns regarding whether there will be enough support to get this legislation passed this year. He says one lawmaker recently estimated there's a maximum of 150 Republicans who will vote for it, meaning 70 or more Democrats in the House will have to vote for legislation that will change eligibility requirements for nutrition assistance.

If only around 40 Democratic votes are garnered, that would mean the need for overwhelming Republican support. A major Whip effort will be needed to garner the necessary votes. The strategy, sources signal, will be to tell Republicans that passing the farm bill will be a "down payment" on needed farm policy reforms, including food stamp funding and a likely worker requirement. And, Republicans will also be told that a no vote would mean another extension of the 2008 Farm Bill, which a growing number of Republicans do not want to occur.

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