House next to take on farm bill
Jun 26, 2012
Pro Farmer Extra
- From the Editors of Pro Farmer newsletter
Corn crop and markets are on "the edge"
Farm Bill baton passed to the House
June 22, 2012
If you haven't read the lead item in this week's Pro Farmer, here it is:
Weather markets heating up — Corn and soybean futures are knocking on the door to a weather market. If June 24 weather updates don’t hold a chance for rain in the eastern Corn Belt, corn and soybean futures will knock down the door to that weather market. We’re on the edge — early planted corn fields in central Illinois are starting to tassel and silks will arrive by the end of this week. That’s when irreversible damage to corn yield potential is possible. Bean yields can still recover, but beans would be a willing participant in the rally and wheat futures would “tag along,” too. That’s especially true with what appears to be a “more stable” situation in Europe that should prevent a “risk-off” attitude in commodities this week. But — IF the pattern changes and surprise rains appear in the forecast, be ready to make aggressive 2012-crop sales. Another potential roadblock to a weather rally will be position-evening ahead of USDA’s June 29 Acreage and Quarterly Grain Stocks Reports.
There are too many acres on "the edge." They're on the edge of severe stress and on the edge of pollination at the same time. That's going to lump a bunch of acres into downtrending yield potential by the end of next week if soil moisture levels aren't recharged soon. That's why this weekend feels like the Fourth of July. The "edge" of stress and pollination is normally reserved for that pivotal time period. But we've still got a full week left in June... so the risk to the crop is very real.
As we said in this week's Pro Farmer, supply-scare (or weather) rallies are normally furious and short-lived. That's why you've got to be ready to pull the trigger on 2012-crop sales in the week ahead.
Farm bill baton passes to the House
Senate leaders came together to pass their version of the farm bill last week, putting pressure on the House to move forward with its version. While initial indications were the House Ag Committee would release farm bill language last week and hold a markup this week, the Ag panel markup is now slated for July 11. That will start the second of three stages of getting to the end zone on the 2012 farm bill. The House must pass its version to get the 2012 bill to a House-Senate conference committee. It's the conference committee where plenty of negotiation will take place.
One Senate feature of farm policy we do not expect to be included in the House version is the linkage between crop insurance payments and conservation compliance. Most likely, the House will leave this out and it will be a major point of negotiation in the conference committee.
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