Evening Report (VIP) -- May 7, 2013

May 7, 2013 09:45 AM

NWS 6-10 DAY FORECAST SIGNALS IMPROVED PLANTING CONDITIONS... The National Weather Service (NWS) forecast for May 13-17 calls for above-normal temps across the western Corn Belt, with normal to below-normal temps expected across the eastern Belt. Meanwhile, normal precip is expected across most of the Corn Belt during the period, with the exception being below-normal precip across southern areas of the eastern Belt. The forecast points to improved planting conditions. Click here to view related maps.



CONSULTANT LOWERS HIS 'CORN ACREAGE SHIFT' ASSESSMENT... The previous couple of weeks crop consultant Dr. Michael Cordonnier said between 1 and 3 million acres of corn was at risk of not being planted due to the cool and wet spring conditions. He has lowered his risk assessment of losing corn acres and now says he believes acreage shifts away from corn will be closer to 1 million than 3 million acres.

"The biggest concern had been the northwestern Corn Belt, especially along the border of North Dakota and Minnesota, where the Red River was predicted to crest at 38 feet. It turned out that flooding was not as bad as predicted because the river only crested at 33 feet," he says, noting the river is dropping quickly.

Dr. Cordonnier says he still expects some intended corn acres to switch to soybeans or cotton in the Delta, as an estimated 250,000 corn acres in Arkansas and Mississippi are yet not planted. But he doesn't expect any major acreage shifts in the central Corn Belt. "Corn planting across the central Corn Belt would have to be delayed until late May before any significant amount of corn acreage would be switched to soybeans or claimed as prevent plant," he adds.



CONSULTANT SAYS SLIGHTLY MORE DOWNSIDE RISK THAN UPSIDE POTENTIAL TO CORN YIELD... Even though Dr. Cordonnier doesn't anticipate a dramatic shift in corn acreage, he says due to planting delays he sees a slightly greater downside risk to corn yield. Last week he put a 20% possibility of a yield of 160 bu. per acre or better and a 20% possibility of a 150 bu. per acre yield or lower. Instead of lowering the corn yield estimate due to ongoing planting delays, he now puts a 15% possibility of a 160 bu. per acreage or better yield and a 25% possibility of a 150 bu. per acre or lower yield.



AFBF URGES PASSAGE OF WATER RESOURCES DEVELOPMENT ACT... The American Farm Bureau Federation along with 20 other ag groups expressed their approval of the Water Resources Development Act (WRDA) of 2013 in a letter to the Senate, which is considering the bill today. The legislation would authorize new projects for flood protection, port improvements and upgrades to the nation's locks and dams infrastructure.

The letter notes that 95% of U.S. ag exports and imports are transported through U.S. harbors and that inland waterway transportation is "by far the lowest cost and most environmentally sustainable transportation mode." The letter that 57% of the locks on the upper Mississippi and Illinois River System "were built in the 1930s with a projected 50-year lifespan, and are in desperate need of modernization and expansion." The letter continues, "Of those, 26% are more than 70 years old. The 2013 infrastructure report card issued by the American Society of Civil Engineers gave the inland waterways a D- grade."



SENATE AG COMMITTEE SETS MAY 14 FARM BILL MARKUP... The Senate Agriculture Committee will hold a session Tuesday, May 14 to markup the 2013 farm bill, according to an announcement from Senate Ag Committee Chairwoman Debbie Stabenow (D-Mich.). There had been talk of a markup session yet this week in the Senate Ag panel but that will now not be the case. Senate Majority Leader Harry Reid (D-Nev.) has said he wants the full Senate to take up the farm bill yet this month.

As for the House Ag Committee, the panel is still tentatively set to hold its markup session on Wednesday, May 15, but no official announcement has yet come. House Majority Leader Eric Cantor (R-Va.) last week released the summer schedule for the House and it included action on a new farm bill. If that holds, expectations are the full House could complete its work on the bill by their July 4 recess, something Republican leaders have signaled is their preference.

Now the key will be release of the draft legislation the panels will use as the markup starting point for the bill. House Ag panel Chair Frank Lucas (R-Okla.) has said he expects 100 amendments to the bill in the committee, with still more to come on the House floor. That will be the real litmus test for the bill in both the House and Senate, and floor action will set the details of the bills.



EIA LOWERS AVERAGE DRIVING-SEASON GAS PRICE... The Energy Information Administration (EIA) says it expects regular gasoline prices to average $3.53 per gallon over the summer driving season (April through September), which is down a dime from last month's estimate. The agency says falling crude oil prices contributed to the lower projection. The annual average regular gasoline retail price is projected to decline from $3.63 per gallon in 2012 to $3.50 per gallon this year and to $3.39 per gallon in 2014. But EIA warns, "Energy price forecasts are highly uncertain, and the current values of futures and options contracts suggest that prices could differ significantly from the projected levels." Click here for additional details from Inputs Monitor Reporter Davis Michaelsen.


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