Evening Report (VIP) -- October 19, 2012

02:36PM Oct 19, 2012
( )

CATTLE ON FEED: VERY LIGHT PLACEMENTS IN SEPTEMBER... Traders were anticipating a sharp drop in the number of calves placed into feedlots in September, but the figure came in even lighter than expected at just 81% of year-ago. That pulled the On Feed number 3% below year-ago despite Marketings coming in lower than anticipated. In all, this data should trigger bear spreading with deferred futures gaining faster than nearby contracts.

COF Report




% of year-ago levels

On Feed













The weight breakdown of September Placements shows: Lightweights down 24.8%; 6-weights down 14.5%; 7-weights down 11.9%; and heavyweights down 20.2%. This data reflects overall tightening calf numbers and the fact many cow-calf operators have already aggressively moved calves due to poor pasture conditions. In particular, the sharp drop in heavyweight calf placements reflects tighter supplies as heavy animals should be the first choice among feedlot operators given high feed prices.



INFORMA RAISES 2013 SOYBEAN ACREAGE FORECAST... Sources familiar with Informa Economics say the firm has updated its 2013 U.S. acreage estimates. Informa reportedly raised its soybean acreage forecast from its earlier peg, while corn held virtually unchanged. Following are details:

  • Corn: Informa estimates corn acreage at 97.5 million, virtually unchanged from its own September estimate, but 590,000 higher than 2012.
  • Soybeans: Informa estimates soybean acreage at 80 million, up 115,000 from its own September estimate and 2.8 million above 2012.
  • All wheat: Informa estimates all wheat acreage at 56.8 million, down 315,000 from its own September estimate, but 1.1 million above 2012.
  • All cotton: Informa estimates all cotton acreage at 10 million, virtually unchanged from its own September estimate, but 2.3 million below 2012.



ARGENTINE AG SECRETARY SEES POTENTIAL FOR RECORD BEAN CROP... Given favorable weather, Argentina's 2012-13 soybean crop could be record large, according to Ag Secretary Lorenzo Basso. He says the crop could reach 55 MMT to 58 MMT, with a floor of 50 MMT. USDA currently projects the crop at 55 MMT, up from 41 MMT in 2011-12. But Basso warns that high humidity as a result of excessive rains could cause disease and fungus problems.



MUCH-NEEDED RAINS EXPECTED IN AREAS OF BRAZIL, BUT WOULD PROMOTE FLOODING IN ARGENTINA... Meteorologist Gail Martell of MartellCropProjections.com provides the following weather highlights for South America, which feature the potential for much-needed rains in areas of Brazil, but more flooding in Buenos Aires, Argentina:

  • Heavy rainfall is predicted in southern Brazil and southern Argentina.
  • Rain is needed in Parana, Brazil, where conditions are very dry. Buenos Aires, Argentina is already very wet and getting more unwanted rain.
  • Strong thunderstorms erupted overnight in Buenos Aires. Wet field conditions will worsen, delaying corn planting.
  • The forecast is wet in Parana calling for three to five inches of rain that would relieve severe drought. Two to three inches of rain in the Buenos Aires forecast may cause flooding.
  • Persistent coolness in southern Argentina has slowed corn planting and germination.
  • Parana has been hot with frequent highs in the 90s F. Temperatures have been 4-5 degrees above normal in recent days.
  • Mato Grosso, Brazil is forecast to get near-normal rainfall in the upcoming week in the form of scattered showers, which would promote soybean planting.