IGC LOWERS 2012-13 TOTAL GRAINS CARRYOVER... The International Grains Council (IGC) lowered its projection of 2012-13 total grains carryover by 4 MMT to 324 MMT (369 MMT in 2011-12). While the group increased its total grains production forecast by 1 MMT, it raised usage to tighten carryover. IGC raised its 2012-13 global wheat carryover forecast by 1 MMT to 173 MMT (196 MMT in 2011-12) amd trimmed its global corn carryover forecast by 1 MMT to 116 MMT (134 MMT in 2011-12). IGC also raised its global soybean carryover forecast by 1 MMT to 28 MMT (24 MMT in 2011-12).
Regarding its outlook for 2013-14, IGC says high prices could spur a 2% increase in global wheat harvested area, though the condition of the U.S. crop is concerning. Click here for more.
U.S. DROUGHT FOOTPRINT EXPANDS SLIGHTLY... The Drought Monitor shows drought expanded slightly across the contiguous U.S. last week, as only 24% of it is drought-free, compared to 26.23% last week. In the Midwest, 76.87% of the area is now affected by some form of drought, up from 74.31% last week. Drought also remains deeply entrenched across the Plains, with nearly 98% of Kansas covered by severe drought.
In its five-day weather outlook, the monitor notes that besides a weak cold front that may bring light showers to the Mississippi Valley late in the period and posible light showers in southern Texas, dry and warm conditions are expected elsewhere across the Plains and Midwest -- offering little hope of near-term drought relief. Click here for related maps.
HIGHLIGHTS OF RMA CROP INSURANCE PREMIUM ADJUSTMENTS... Earlier this week, USDA's Risk Management Agency (RMA) announced adjustments to premium rates for 2013 crops. Following are some of the highlights:
- For corn, grain sorghum, and cotton, increases in premium rates in some areas generally offset the decreases in others for little net change at the national level.
- For rice and soybeans, there is an overall decrease of 8% and 6%, respectively.
- For spring wheat, there is an overall increase of 4%.
RMA also noted that generally speaking, premiums are more likely to decrease in core growing areas and increase elsewhere. The premium rate changes of 2012 and the projected changes for 2013 are largely driven by recommendations from a 2011 rate study, which we reported on yesterday in "Evening Report." To see maps breaking down the increases, click here.
U.S. CROP INSURANCE PAYOUTS FOR 2012 CROPS REACH $6.3 BILLION... U.S. crop insurance indemnities for 2012 crops reached $6.27 billion as of Nov. 26, according to RMA data. The tally for 2012 crops has finally passed where 2011-crop indemnities stood at this point last year and will keep climbing. Payouts for 2011 eventually hit a record $10.834 billion, and expectations are that 2012 payouts will end up setting a new record of around $20 billion. U.S. corn indemnities have reached $3.5 billion, far ahead of other crops with wheat, soybeans and others still under $700 million. The lofty payouts underscore why crop insurance remains a focus in Washington, especially as that program is being eyed even closer as one of the key farm program tools in the future. Get more details.
BOEHNER PESSIMISITC ON FISCAL CLIFF TALKS... House Speaker John Boehner (R-Ohio) today warned that there was a "real danger" of the U.S. economy falling over the fiscal cliff as he noted "no substantive progress" in the past two weeks of talks with the White House. After speaking on the phone with President Barack Obama on Wednesday night and holding a "frank" meeting with Treasury Secretary Timothy Geithner today, Boehner said Democrats "have yet to get serious about spending cuts."