Evening Report (VIP) -- October 22, 2012

October 22, 2012 09:41 AM
 

CORN HARVEST WINDING DOWN... USDA reports 87% of the nation's corn crop has been harvested as of Sunday compared to 79% last week and 49% on average. Illinois has 92% harvested (62% on average), Indiana is at 72% (53% on average), Iowa is at 93% (42% on average), Minnesota is at 96% (43% on average), Nebraska is at 89% (37% on average) and Ohio is 50% harvested (36% on average).

 

 

SOYBEAN HARVEST 80% COMPLETE... USDA reports 80% of the nation's soybean crop has been harvested as of Sunday compared to 71% last week and 69% on average. Illinois has 80% harvested (71% on average), Indiana is at 69% (71% on average), Iowa is 96% complete (71% on average), Minnesota is at 100% (81% on average), Nebraska is at 95% (75% on average) and Ohio is 63% done (68% on average). Soybean basis has already begun to improve, which is offsetting talk of "better-than-expected" yields. Focus in the soybean market has returned to demand.

 

 

NEARLY HALF OF WINTER WHEAT CROP HAS EMERGED... USDA reports 49% of the winter wheat crop has emerged compared to 36% last week and 56% on average. Traders have noted the slower-than-normal emergence of the crop, which signals it could be struggling as planting is running on pace with average at 81% complete. Kansas reports 62% of the crop has emerged (61% on average); Oklahoma is at 59% (57%); and Texas is at 51% (46%). This should alleviate concerns about the hard red winter wheat crop lagging, although Colorado is at 66% compared to 82% on average.

 

 

COTTON HARVEST 38% COMPLETE... USDA reports cotton harvest progressed by ten percentage points last week to 38%, which is just one percentage point behind the average pace. Leading the way is Louisiana at 91% complete (75% on average), followed by Arkansas at 79% (62% on average) and Missouri at 62% (63% on average). Texas has 31% harvested compared to 24% last week and 27% on average.

 

 

COLD STORAGE: RECORD PORK STOCKS... This afternoon's Cold Storage Report showed frozen pork stocks at the end of September record large for the month at 630.657 million lbs., which is around 10 million lbs. above the average pre-report guess. This represents an 8% increase from last month and is 28% higher than last year at this time. Belly stocks at 16.688 million lbs. are up 79% from year-ago and 17% above last month.

Frozen beef stocks at the end of September of 425.621 million lbs. came in about 2 million lbs. above the average pre-report guess and are down 2% from last month and 0.5% below year-ago. Boneless cuts are down 3% from year-ago, while beef cuts are up 16% from year-ago.

Total frozen poultry supplies are down 3% from last month and 1% smaller than last year at 1.176 billion pounds.

The report is neutral for the cattle market, especially since supplies will continue to tighten into 2013. But the report is bearish for lean hog futures as it signals demand is not keeping up with supplies, which are on a seasonal upswing.

 

 

MARTELL: ARGENTINA TOO WET, BRAZIL TOO DRY... The pattern of too much rain in Argentina and not enough precip in eastern Brazil continues, says meteorologist Gail Martell of MartellCropProjections.com. Rains continue to delay corn planting in Argentina, that ironically were delayed by drought last year at this time. Martell says the Argentine grain belt has seen over 6 inches of rain so far this month -- two to four times the normal.

Martell says while waves of showers spread northward out of Argentina into Paraguay and Brazil, tallies there were disappointing. Additionally, she says persistent hot temps have added to moisture stress in areas of Brazil. Click here for more, including maps.

 

 

VILSACK SAYS MAP EXPIRY MAY HINDER FARM EXPORTS... In his push for a new farm bill, USDA Secretary Tom Vilsack has recently said in press releases and interviews that strong U.S. farm exports could falter if USDA's Market Access Program (MAP), which expired Oct. 1 along with the 2008 Farm Bill, is not reinstated. MAP is a $200 million a year cost-share program for marketing and promoting U.S. products overseas. The latest export forecast shows U.S. farm exports are on track to reach the second highest level ever in 2012, while 2013 exports are forecast at a record $143.5 billion.

While MAP proponents say the program is necessary for helping small- and medium-sized businesses promote their products overseas, critics say it's wrong to ask taxpayers to pay for marketing for successful private companies. Senator Tom Coburn (R-Okla.) in June this year released a report titled "The Market Access Program's Bounty of Waste Loot and Spoils Plundered from Taxpayers" that takes aim at MAP. He says the program has spent more than $2 billion to subsidize profitable ag companies and trade associations doing business overseas. He points out the list of recipients includes companies such as "Sunkist, Welch's, Blue Diamond, Tyson Foods, Purina, Hershey’s, Georgia-Pacific and Jack Daniels."

 

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