Evening Report (VIP) -- October 30, 2012

October 30, 2012 10:05 AM

STOCK MARKET TO REOPEN TOMORROW... Major U.S. stock market exchanges will reopen Wednesday following two days of closure due to Superstorm Sandy. The New York Stock Exchange (NYSE) and Nasdaq will test their trading systems tonight and if everything passes, trading will commence at 8:30 a.m. CT Wednesday under normal opening procedures. If there are problems, the exchanges will switch to fully electronic trading.

Duncan Niederauer, CEO, NYSE Euronext says the stock exchange building and systems were not damaged and exchange personnel have been working diligently to ensure there is a smooth opening tomorrow.

The U.S. bond market is also expected to resume trade Wednesday.



CONSULTANT TRIMS BRAZILIAN SOYBEAN CROP ESTIMATE... South American crop consultant Dr. Michael Cordonnier says at the start of the growing season, hopes that El Nino would improve the weather situation led to him estimating the crop between 81 MMT and 83 MMT. With El Nino failing to materialize and weather conditions varied across Brazil, he has lowered his estimate to a still-record 80 MMT.

"The main reason why I am more cautious now is due to how the rainy season has started," says Dr. Cordonnier. "The rains have been unevenly distributed especially as you move eastward in Brazil. With the calendar soon turning to November, it's time to get the crops in central Brazil planted as soon as possible. Any further planting delays could start to jeopardize not only the yield potential, but also the planting of a second crop of corn."

Dr. Cordonnier says Brazilian bean planting progress continues to be uneven, with 30% to 32% of the crop planted nationwide, which is down around 10 percentage points from last year, but still above the five-year average. About half of the Mato Grosso crop has been planted, with 48% planted in Parana and 6% complete in Rio Grande do Sul.



CONSULTANT FINE-TUNES BRAZILIAN CORN CROP ESTIMATE... Dr. Cordonnier has fine-tuned his Brazilian corn estimate to peg the crop at the bottom of his previous range at 72 MMT. He says the crop hasn't seen an ideal start, as planting in southern Brazil has been slowed by wet conditions and it's still too try in central and northeast Brazil. If planting delays persist past the middle of November, he says producers may opt to switch unseeded acres to soybeans.

"The biggest concern is the potential yield of the safrinha (second season) corn crop," says Dr. Cordonnier, which is planted after soybean harvest. "A second crop of corn can be very good or it can be very bad. The last growing season was excellent for the safrinha corn and yield records were broken. If it gets planted later than normal this growing season and if the rainy season ends earlier than normal, then corn yields could end up being half of last year's yield."



WET CONDITIONS DELAY ARGENTINE PLANTING... Dr. Cordonnier says excessively wet conditions continue to delay planting in Argentina. Just 37% to 38% of expected corn acres have been planted, which is around 18 percentage points slower than last year. In the areas of heaviest rainfall, some of the corn will need to be replanted once it dries out and there is a growing possibility some acres will eventually be switched to soybeans. He estimates the Argentine corn crop at 26 MMT, which is at the bottom of his previous range of 26 MMT to 27 MMT.

Dr. Cordonnier says just 2% of the nation's soybean crop has been planted, which compares to 6% last year at this time. He estimates the Argentine soybean crop at 56 MMT compared to a previous range of 55 MMT to 57 MMT.

Private crop forecasters in Argentina are also signaling corn and soybean production could be reduced by the excessive wetness. The most extreme estimates are that the corn crop could be cut by 20% and the soybean crop by 10% if the adverse weather conditions continues.



CANTOR COMMENT DOESN'T MEAN VOTE ON NEW FARM BILL POST-ELECTION... While campaigning in Idaho last week, House Majority Leader Eric Cantor (R-Va.) said he was "committed to bring the issue to the floor and then to see a way forward so that we can get the votes to pass (a bill)." Many, including Senate Ag Committee Chairwoman Debbie Stabenow, took this as a commitment to bring the bill approved by the House Ag Committee to the floor for a vote during the lame duck session. Cantor's office has now confirmed this was not the case and Megan Whittemore, a spokeswoman for the office, said, "All he said was we'd address the issue. [He] never committed to a specific vote."


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