MARTELL: SOIL MOISTURE IMPROVES IN SOUTHERN BRAZIL... Meteorologist Gail Martell of MartellCropProjections.com says locally heavy rains of 3 to 4 inches in Rio Grande do Sul and around 1.5 inches in western Parana have improved soil moisture for planting. These Brazilian states still need more rain, but a low pressure system is expected to deliver more precip this week.
"Southern Parana had accrued an 8.25-inch moisture deficit, and northern Rio Grande do Sul, a 5-inch moisture deficit. Brazilian producers are feeling optimistic about spring planting and crop potential with the wet forecast," says Martell.
NASS-STATS CANADA DISCONTINUES OCTOBER HOG REPORT... We're disappointed to learn that USDA's National Agricultural Statistics Service (NASS) will not publish the U.S. and Canadian Hogs Report scheduled for October 29. Apparently, Statistics Canada will not release its October Hog Statistics Report, which provides important information as to the size of the North American hog herd.
"In the past, this publication has been released by NASS in cooperation with the Statistics Canada. In September, the Canadian agency discontinued its October Hog Statistics publication, resulting in discontinuation of the two nations' joint hogs report as well. The next joint release of hog and pig estimates for the United States and Canada is scheduled for February 2013," states NASS.
Pro Farmer Canada Editor Mike Jubinville says the Canadian hog statistics data that was previously issued quarterly, will now be released on a semi-annual basis, with the next report on Feb. 19, 2013.
U.S. ETHANOL PRODUCTION LOWEST SINCE DATA SERIES BEGAN... The Energy Information Administration (EIA) reports U.S. ethanol production fell for the third straight week to the lowest level since the government began releasing the data more than two years ago. Ethanol production the week ended Sept. 28 of 785,000 barrels per day (bpd) declined 24,000 bpd from the previous week. The data also shows stocks tightened to 18.81 million barrels, down 451,000 barrels from the previous week.
MONSANTO SEES NEAR-STEADY CORN ACREAGE IN 2013... Monsanto says it expects U.S. producers to plant around 96 million corn acres in 2013, which would be in line with this year's planting of 96.4 million. Monsanto expects soybean acres to increase from the 76.1 million acres planted this year, but didn't say by how much. A company spokesman says the seed supply situation will be similar to last year and they are confident in meeting seed demand for 2013. Click here for details on Monsanto's fiscal year 2012 earnings report.
FARM BILL FATE STILL UP IN THE AIR... The next path for a new farm bill could take several fronts, including being part of any "grand bargain" during the post-election session that will deal with so-called "fiscal cliff" issues, including expiration of tax cuts and extenders. If that route is not taken, decisions must be made regarding how much time to give a new Congress to complete a farm bill. Some lawmakers and farm groups want a new bill no later than March 2012, while others see a logical argument for providing the new Congress another year to work on a new measure. The eventual timeline will determine how long the 2008 Farm Bill is extended and in what manner. Other farm bill issues that must still be resolved include:
- Overall cuts to the farm bill baseline ($23.1 billion in Senate bill; $35.1 billion in House bill).
- Food stamp funding cuts ($4 billion in Senate; $16.1 billion in House).
- Farmer option for target/reference prices (contained in House bill but not in the Senate).
For more details on the fiscal cliff and spending issues that await lawmakers when they return following the elections, click here.
PF MIDWEEK MARKETING GAME PLAN UPDATE...
CORN: With hedgers 100% sold on 2012-crop production in the cash market -- 90% for harvest delivery; 10% for March 2013 delivery -- we are now watching for reownership opportunities. While futures appear to have put in a short-term low, the trend is still down and a period of choppy price action is likely as traders wait on the next batch of bullish news. Hedgers should hold the Dec. $6.50 put options which were purchased on 40% of 2012-crop for 31 1/2 cents as a crop insurance hedge. Cash-only marketers are 75% priced on 2012-crop production -- 50% for harvest delivery; 10% for March 2013 delivery; and 15% for May 2013 delivery. Get current with advised cash sales.
BEANS: Hedgers are 100% sold on 2012-crop production for harvest delivery. Hedgers also hold Nov. $14.00 put options which were purchased for 42 3/8 cents on 25% of 2012-crop as a crop insurance hedge. With the short-term trend still sharply lower, there's no urgency for hedgers to reown a portion of 2012-crop on the board, but that time will eventually come. Cash-only marketers have 75% of expected 2012-crop forward sold for harvest delivery. Get current with advised cash sales.
WHEAT: The wheat market continues to hold up relatively well in the face of pressure on corn and soybeans. Hedgers and cash-only marketers have 75% of 2012-crop sold in the cash market. Get current with those sales levels. We'll make the market prove a top is in place before making additional cash sales. Hedgers may also add hedge coverage to protect downside price risk if there are signs of a top.
COTTON: Hedgers and cash-only marketers have 50% of expected 2012-crop production sold for harvest delivery. Get current with advised sales, but no additional sales are recommended with some time left in the 2012-13 marketing year.
CATTLE: Live cattle futures are signaling a potential short-term low. As a result, fed cattle producers should continue to carry all risk in the cash market as the downside is limited by tight supplies. Feeder cattle buyers and sellers carry all risk in the cash market for now.
HOGS: Let the corrective rally unfold, but be prepared to add hedges as supplies will remain heavy through winter and futures are trading at a premium to the cash market.
FEED: The price break in corn and meal futures will eventually be an opportunity to extend feed coverage. But remain hand-to-mouth until futures signal short-term lows are in place.