USDA DATA BEARISH FOR CORN, BULLISH FOR SOYBEANS... It's not often that corn and soybean futures divorce themselves to this degree. November soybean futures are trading near contract highs and December corn is in the lower third of its life-of-contract range. We've been watching their phenomena unfold for several weeks, and the price reaction to today's USDA reports resulted in a further widening of this spread. Click here for Pro Farmer's full report reaction.
ONLY MINOR CHANGES TO LIVESTOCK BALANCE TABLES... USDA raised its 2013 beef and pork production projections marginally from last month and left its 2014 production pegs unchanged to reflect prospects for tightening beef supplies in the year ahead and growth in pork production. USDA raised its 2013 beef and pork export projections slightly, left its 2014 beef export projection unchanged and raised its 2014 pork export projection slightly from last month.
Given the minor revisions, USDA left its 2013 cash steer price projection unchanged at an average of $124.50 and it left its 2014 projection at $131. USDA also kept its 2013 and 2014 cash hog price projections unchanged from last month at $63 and $60, respectively.
MIDWEST DROUGHT CONTINUES TO WORSEN... According to the National Drought Monitor, 51.57% of the Midwest is covered by drought, up from 48.47% last week; nearly 11% is covered by "severe" drought, up from 7% last week. The monitor reports for the contiguous U.S., 63.75% of the nation is covered by some form of drought, up more than 2 percentage points from last week.
The market is also keeping a close tab on weather in the Plains now that winter wheat planting is ramping up. Recent rains have had little impact on the drought across the Central and Southern Plains. In fact, the monitor reports that in Kansas, drought now covers 62.6% of the state, up from 53.3% last week. Click here for related maps.
HOUSE MAY CANCEL SEPTEMBER RECESS... House Majority Leader Eric Cantor (R-Va.) warned today the chamber may have to cancel its September recess to work on a government funding bill to prevent a government shutdown on Oct. 1. Lawmakers were slated to have the week of Sept. 23 off, and are coming off a five-week August break. Cantor said members should stay tuned for an announcement on this next week.
HOUSE COMMITTEE RELEASES WATER RESOURCES DEVELOPMENT BILL... The House Transportation and Infrastructure Committee yesterday introduced the Water Resources Reform and Development Act of 2013(WRRDA). This legislation is intended "to provide for improvements to the rivers and harbors of the United States, to provide for the conservation and development of water and related resources, and for other purposes." The measure would re-authorize the U.S. Army Corps of Engineers to care for and develop the nation's waterways; it would also require the Corps to complete studies of waterway projects in three years or less and it would enact a spending cap of $3 million. The Senate passed a similar act -- the Water Resources Development Act (WRDA) -- in May. Committee Chair Bill Shuster (R-Pa.) says the House measure is similar to that of the Senate, with one of the main differences being the Senate bill gives the executive branch the authority to choose which projects receive funding, while the House measure would require congressional action. This would be the first water resources development authorization since 2007.