Evening Report (VIP) -- November 1, 2013

November 1, 2013 09:48 AM
 

INFORMA RAISES U.S. CROP PEGS... Sources familiar with Informa Economics say the firm has updated its 2013 U.S. crop estimates. Informa reportedly raised its corn and soybean crop estimates from last month.

  • Corn: Informa reportedly pegs the crop at 14.223 billion bu. with a yield of 161.2 bu. per acre, up from its estimate of 14.010 billion bu. last month. This compares to USDA's most recent estimate of 13.843 billion bushels.
  • Soybeans: Informa reportedly pegs the crop at 3.298 billion bu. with a yield of 43.3 bu. per acre; up from 3.176 billion bu. last month. This compares to USDA's most recent estimate of 3.149 billion bushels.
  • Cotton: Informa reportedly pegs the all-cotton crop at 13.851 million bales with a yield of 854 lbs. per acre; up from 13.709 million bales last month. This compares to USDA's most recent estimate of 12.9 million bales.

USDA will release its next Crop Production Report on Friday, Nov. 8, at 11:00 a.m. CT. The report is highly anticipated after USDA canceled its October report.

 

ATTACHÉ REVISES CHINESE SOYBEAN IMPORT FORECAST... The U.S. ag attaché in China has left its forecast for 2013-14 soybean production unchanged at 11.8 MMT but sees soybean imports exceeding 67.5 MMT, up from 60 MMT in 2012-13. USDA currently estimates Chinese soybean imports in 2012-13 at 59.5 MMT and 2013-14 imports at 69 MMT. If USDA takes the recommendation from the attaché, it will lower its Chinese soybean import forecast in the November Supply & Demand Report.

The attaché, however, says stronger soybean demand ahead for 2013-14 compared to the previous season will be driven by a recovery in livestock production and expected tighter soybean stocks. It also states "reasonable" international prices behind the likelihood end-users will rebuild stocks for the "huge crush sector."

 

FSA RESUMES CROP COMMODITY LOAN DISBURSALS... USDA's Farm Service Agency (FSA) today announced that it has resumed the processing and disbursement of 2013 crop commodity loans. Loan making for the 2013 crop year was suspended on Oct. 1 to make changes to accommodate for sequester spending cuts. Producers requesting 2013 crop commodity loans on their harvested commodities will have a 5.1% reduction to the loan amount upon its disbursement, due to the sequestration. Commodity loans issued by marketing associations and loan servicing agents are also subject to the sequestration reduction.

 

SENATE'S AMP WOULDN'T PROVIDE MUCH OF A SAFETY NET... The Senate's proposed Adverse Market Program (AMP) would have provided assistance to corn growers in just four of the past 142 years (1920, 1921, 1931 and 1932). Soybean growers would have received assistance from AMP in just two of the past 95 years (1931 and 1932). Wheat growers would have received AMP Assistance four times in the past 100 years, the last being 1932. To beef up the safety net, the Senate added Ag Risk Coverage (ARC).

 

IS 'SHALLOW-LOSS' PROGRAM DEFENSIBLE?... But the ARC program that includes "shallow loss" provisions has also drawn much scrutiny. One analysis of the provision says ARC could potentially double (or even triple) the Direct Payment for corn growers, and soybean growers could receive up to five-times the support provided by direct payments. For other crops, the analysis says maximum support under ARC would be similar to (or less) than provided by Direct Payments. Learn more.

 

COTTON SAFETY NET A BIT DIFFERENT THAN OTHERS'... The U.S. cotton program has always been a tad different, and this version of the farm bill is no exception. Cotton producers' safety net is moved out of Title I and into the crop insurance title, with a key being there are no payment caps for crop insurance payouts. Brazil's successful challenge to the U.S. cotton program in part led to the new proposed cotton program dubbed STAX (Stacked Income Protection Plan). A controversial item is that unlike the Senate farm bill, the House would pay cotton producers two years of "transition (direct) payments" to give USDA time to fully implement the program. That could be altered via any conference report.

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