Evening Report (VIP) -- November 20, 2012

November 20, 2012 08:51 AM
 

SOYBEAN HARVEST IN MATO GROSSO TO BEGIN THE FIRST HALF OF JANUARY... South American crop consultant Dr. Michael Cordonnier says now that soybean planting is nearly complete in Mato Grosso, it's likely soybean harvest in the state will begin the first half of January. "There might be a few fields of soybeans in Mato Grosso harvested by New Year's Day, but the volume of harvested soybeans will be small until about the middle of January," he says. As long as producers are able to get new-crop supplies into exportable position and the ports are fully operational, we expect Brazilian soybean exports to start trickling onto the world market in late January.

 

 

BRAZIL CROP ESTIMATES UNCHANGED, BUT THERE ARE CONCERNS... Dr. Cordonnier left his Brazilian corn and soybean crop estimates unchanged from last week at 72 MMT and 80 MMT, respectively, but says diminished rainfall across southern Brazil raises concern about an emerging drought for the area. Light rains fell across Rio Grande do Sul this past weekend, but they weren't strong enough to recharge parched soils. This, combined with early detection of soybean rust in Mato Grosso and Santa Catarina, raises his level of concern for the soybean crop.

Dr. Cordonnier says full-season corn in Brazil was generally planted later than what is considered ideal, which increases the risk of yield reductions unless the rainy season is extended. Additionally, he says the safrinha corn crop, which is planted after soybean harvest, will likely be planted a little later than normal due to soybean planting delays. Click here for Dr. Cordonnier's crop estimates.

 

 

ARGENTINE PLANTING REMAINS DELAYED... Dr. Cordonnier says Argentina's corn crop continues to have problems. While farmers now have a small window of improved planting conditions, they are focusing their efforts on planting soybeans. He says if producers return their focus to planting corn, the risk to yield also increases. Nationwide, corn planting is around 45% complete, which is 17 percentage points behind last year's pace.

Meanwhile, he says Argentine soybean planting is about 23% complete, which is still around 15 percentage points behind last year's pace. "Soybean acreage may end up being higher than originally anticipated due to switching some of the corn acreage to soybeans," he says, although that won't fully be known for several more weeks.

 

 

NEUTRAL ENSO CONDITIONS TO LINGER INTO 2013... The Australian Bureau of Meteorology says ENSO indicators in the tropical Pacific remain at neutral levels and are likely to stay that way into the first quarter of 2013. "Although being below El Niño levels, tropical Pacific Ocean temperatures remain warmer than average. Atmospheric indicators, such as the Southern Oscillation Index, trade winds and tropical cloud patterns, have all remained at neutral levels through the (southern hemisphere) winter and spring," accordnig to the Aussie scientists. Click here for more.

Lingering ENSO-neutral conditions don't bode well for moisture prospects in the Southern U.S. Plains, where winter wheat ratings are the lowest on record for this date.

 

 

COMPREHENSIVE IMMIGRATION REFORM IS COMING... The Republican Party decisively lost the Hispanic vote in the recent elections -- President Obama garnered 69% of a growing Hispanic vote, which was key in several swing states. The Hispanic vote also proved decisive in several Senate races. The Hispanic voting bloc is growing with each election and becoming even more critical in states with a fast-growing Latino population. The GOP has seemed to go out of its way the past few years to upset Hispanic voters. Party leaders know that must change to prevent the GOP from being a permanent minority party in the years ahead.

Republicans have had success among Hispanic voters in the past -- President George W. Bush received 42% of the Hispanic vote, but that tailed off considerably in the 2008 election with GOP candidate John McCain and even more so with GOP candidate Mitt Romney.

Hispanic voters have a lot of "core values" of the Republican party, which recalls former President Ronald Reagan's line, "Hispanics are Republicans... they just don't know it." Hispanic voters are not single-issue voters, but they do want comprehensive immigration reform.

There now appears to be a consensus in Washington that this issue will cross the sensitive end zone, with some saying the matter will be dealt with in an 18-month timeline. When comprehensive immigration reform comes, it will likely include the following key features:

  1. Border protection. This must and will come first and will likely include several phased-in programs.
  2. Enforcement. Programs like e-verify and other enforcement mechanisms must be in place to help businesses and others verify citizenship or some other status.
  3. Seasonal workers. More flexibility in this area will help the U.S. agricultural sector, which has seen a shortage of labor at critical times in the food business.
  4. More permanent accommodation for the children of illegal immigrants.
  5. And the most important item: a pathway toward citizenship for the 11 to 12 million illegal immigrants currently in the U.S. This will not be outright amnesty. The likely scenario is this group will have to pay a fine for their prior illegal activity. They will be given an identification status, after which they must pay U.S. taxes but will be unable to garner many U.S. citizen benefits until after they apply for citizenship and receive citizenship -- a process that could take 8 to 10 years.
     
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