Senators press for EU trade talks to address agriculture

[WASHINGTON] FOUR Republican farm state US senators on Thursday expressed concern that possible free trade talks between the United States and European Union may not dismantle longstanding EU barriers to US pork, beef, poultry and other farm products.

"Our trade negotiators must demand of EU officials that barriers to US agricultural products be addressed in any potential trade agreement," the senators said in a letter urging Senate Finance Committee Chairman Max Baucus, a Democrat, to schedule a hearing with US trade officials.

The US and the 27 nations of the EU have been discussing for more than a year the possibility of launching free trade talks and are widely expected in coming weeks or months to make a decision to take that step.

The senators - Chuck Grassley of Iowa, Pat Roberts of Kansas, Mike Enzi of Wyoming and John Thune of South Dakota - said they wanted a hearing because Congress has not passed legislation, known as Trade Promotion Authority, giving the administration specific guidelines for any talks with the EU.

"It is important we know where the discussions with the EU stand, and what exactly has been discussed regarding barriers to agricultural products, so we can determine for ourselves whether the administration is adequately addressing this key trade priority," the senators said.

The US has been frustrated for years by what it considers the EU's "non-scientific" approach to food safety. The EU has blocked imports of US genetically modified corn and soybeans, poultry treated with chlorine dioxide, beef with lactic acid to kill pathogens and pork produced from hogs given ractopamine, which promotes lean meat growth.

US trade officials have said they are looking for progress from the EU on agriculture barriers before talks begin. That is believed to be one of the main reasons that a high-level US-EU working group report on the expected negotiations that was due in December still has not been released. - Reuters

Original Article Here

Farm markets seen slightly higher

With the CME Group corn, soybean and wheat markets closed, overnight, due to the Christmas Holiday, the farm markets are expected to advance slightly higher Wednesday. 

Today's grain trade will open at 9:30am CST. 

The Early Calls for the commodities on Wednesday, December 26, 2012, are slightly higher, due to ideas that the market was oversold last week. 

The outside markets are favorable for Wednesday's grain trade. The real factors driving the calls will be the lower overnight markets.

Original Article Here

Record Argentine corn and soya output to boost global supplies

Argentina looks poised to produce record corn and soya crops in the upcoming 2012/13 season, helping offset the impact of a devastating US drought and ease global food price concerns. Private analysts say heavy rains last month and high international prices are spurring farmers to plant corn and soyabeans in Argentina, one of the world's biggest grains exporters. 

Meteorologists expect the wet weather to continue throughout this crop year thanks to the El Nino phenomenon, producing a soya harvest of up to 56 million tonnes and corn output of as much as 31 million tonnes. That would mark a 40 percent increase for soya and a 50 percent jump for corn compared with last season, when plants were battered by a drought that left many farmers in tight financial straights. 

Corn area was initially seen falling sharply this season due to such difficulties but the outlook has since improved. The Buenos Aires Grains Exchange raised its corn area forecast last week, although it still sees a 12 percent decline in acreage from the 2011/12 campaign. 

"It rained very well during all of August and moisture was replenished in nearly the entire grains-growing region. Prices continued to improve and the necessary financing materialised," said Esteban Copati, an analyst at the Buenos Aires exchange. Farmers began seeding corn in late August and they will harvest the grain starting in February or March. Soyabean planting will begin in the coming weeks, with the bulk of soya gathered in April and May. Argentina produced a record soya harvest of 52.7 million tonnes in the 2009/10 crop year and its biggest corn haul ever in 2010/11, when production reached 23.8 million tonnes, Agriculture Ministry data shows. Analysts see production topping those levels this season, helping compensate for the worst US drought in half a century, which has pushed corn and soyabean futures to record highs in the last month at the Chicago Board of Trade. 

Copyright Reuters, 2012

News Summary: Agriculture prices rise, oil falls

By The Associated Press 

THE ISAAC EFFECT: Prices for wheat, corn and soybeans rose. That was partly from Hurricane Isaac. Its rain might be welcome after a drought, but it's unlikely to have much effect on crops that have been suffering all summer. It will also cut into harvesting time in the Southeast.

THE ISAAC EFFECT, PART 2: Oil prices fell, despite Isaac's forcing some Gulf Coast rigs to temporarily shut down. Investors seemed more swayed by a government report that inventories of crude oil rose last week for the first time in a month.

NOT-HEAVY METALS: Major metals all fell slightly. Precious metals like gold and silver were down, and so were industrial metals like copper and palladium.

Original Article Here

Corn, soybeans turn mixed

By: Mike McGinnis

DES MOINES, Iowa (Agriculture.com)--After starting much higher, the CME Group soybean market has pulled back, still trading higher Friday.

At mid-session, the Dec. futures corn contract is trading 3 1/2 cents lower at $8.11 1/4. The Nov. soybean contract is trading 9 cents higher at $17.24. Dec. wheat futures are trading 5 1/4 cents lower at $8.89 per bushel. The Dec. soyoil futures contract is trading $0.10 higher at $56.87. The Dec. soymeal futures contract is trading $3.50 per short ton higher at $518.80.

In the outside markets, the NYMEX crude oil is $0.75 per barrel higher, the dollar is higher and the Dow Jones Industrials are 65 points higher.

Tim Hannagan, Alpari (U.S.) senior grain analyst, says lack of fresh news keeps lid on farm markets.

"Without any fresh news for the bulls to buy off of, corn and bean traders continue to take long profits on any rallies taking month end profits," Hannagan says. While wheat led the way lower, as key winter wheat states begin planting in Sept., look to see heavy rains the next three days and possibly more next week depending where the hurricane lands," he says.

Original Article Here

Impact of U.S. drought on crops may be peaking, Vilsack says

By Alan Bjerga,

Aug. 17 (Bloomberg) -- The severity of the worst U.S. drought in 56 years may be peaking, while its effects on corn and soybeans, the nation’s two biggest crops, may not be known until the harvests, Agriculture Secretary Tom Vilsack said.

The steadying of weather conditions may limit food inflation next year, which the U.S. Department of Agriculture predicted last month would be 3 percent to 4 percent, Vilsack said yesterday in an interview at the Iowa State Fair in Des Moines. It may also ease pressure to relax federal requirements for the use of corn to make ethanol, he said.

“The overall impact of the drought is beginning to decline,” Vilsack said. The uneven effects of the persistent dryness, which vary from farm to farm, make any crop predictions difficult, he said. “I’m not sure we know all we need to know to understand what’s happening with this crop.”

The condition of the soybean crop improved last week for the first time this year, and corn’s good-to-excellent ratings steadied at 23 percent, as rain and cooler temperatures reduced plant stress, the USDA said this week. The drought in states excluding Alaska and Hawaii eased last week to 61.8 percent from 62.5 percent, with improvement in all categories of severity except for the worst, the U.S. Drought Monitor reported.

Persistent Drought

Drought conditions will persist in much of the Corn Belt and Great Plains states through November, the National Oceanic and Atmospheric Administration said yesterday in a report. Lower temperatures and rain forecast for parts of the Midwest won’t be enough to snap the drought that has pushed crop prices up for months, said Joel Widenor, co-founder of Commodity Weather Group LLC in Bethesda, Maryland, this week.

Corn futures traded in Chicago have surged 60 percent since mid-June, closing yesterday at $8.075 a bushel, while soybeans have jumped 24 percent, prompting the United Nations to predict higher global food costs. Tyson Foods Inc., the largest U.S. meat processor, said Aug. 6 profit will be lower after the company was forced to pay more for grain to feed animals.

Much of the damage has already been done to the corn crop, which passed through the critical pollination stage in the heart of the drought, while there’s still some hope for soybeans, which mature later in the season, Iowa Farm Bureau Federation President Craig Hill said this week in an interview.

Further Impact

Vilsack said that even as the USDA tries to ascertain the size and condition of this year’s harvests, it’s starting to look at the drought’s further impacts on the farm economy.

“Every day we learn more, every day we can evaluate more,” he said, adding that his department is starting to assess the consequences for next year’s crops, in terms of credit availability and planning.

The USDA, in a monthly report on Aug. 10, forecast a corn crop of 10.779 billion bushels, down 13 percent from 2011. The soybean harvest was pegged at 2.692 billion bushels, 12 percent smaller than last year. The harvests get under way next month.

Jose Graziano da Silva, director-general of the UN’s Food and Agriculture Organization, last week called for a suspension of U.S. ethanol-use rules to let more corn be used for food and livestock feed. Jay Carney, White House press secretary, in Iowa this week told reporters that the USDA and the EPA will be evaluating data to determine what should be done about requests for waivers from state officials and more than 175 members of Congress.

Mandated Use

A 2007 law mandates the use of 13.2 billion gallons of biofuels such as ethanol this year, rising to 13.6 billion in 2013. The measure is designed to help reduce the nation’s reliance on oil from overseas sources.

Vilsack, a former governor of Iowa, the biggest U.S. producer of corn, soybeans, pork and ethanol, said waiving the requirement may bring long-term harm to investment in biofuel production without having a major effect on food prices.

“My concern is that we send a signal to investors of perhaps, less confidence in the industry,” Vilsack said. “We need to see whether the market is responding” by rationing demand for biofuels in the face of high prices, he said.

Companies including Poet LLC and Archer Daniels Midland Co. produced 819,000 barrels (34.3 million gallons) of ethanol a day in the week ended Aug. 10, down 15 percent from a record in December. Stockpiles sank 1.1 percent to 18.4 million barrels, the lowest since Dec. 30, Energy Department data show.

At least 25 U.S. senators and 156 House members have signed letters asking Lisa Jackson, administrator of the Environmental Protection Agency, to suspend or lower mandates on how much ethanol the country must use this year and next.

Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.

Original Article Here

House Takes Up One-Year Agriculture Bill, Drought Aid

By Derek Wallbank

(Corrects timing of bill’s approval by House farm panel in fifth paragraph.)

The U.S. House next week will take up a one-year extension of most of an agriculture-policy law that expires in September along with a provision that would help livestock producers hurt by a record drought, according to a posting on the Rules Committee website.

The bill would allow growers of major crops such as corn and soybeans to continue to receive so-called direct payments, which are allotted regardless of commodity prices and which the Senate and the House Agriculture Committee have voted to eliminate. It would also allow lawmakers to provide emergency relief to cattle, pig and poultry producers who’ve suffered losses, without having to make an election-year vote on legislation that calls for deep cuts in food-stamp funding.

Representative Collin Peterson of Minnesota, the top Democrat on the House Agriculture Committee, said he’s against any extension of the farm-policy law unless he’s assured it will lead to a conference with the Senate on the five-year bill that chamber approved in June.

“Congress should not be playing politics with the rural economy,” Peterson said in a statement. “Farmers need the certainty of a five-year farm bill.” His comments echoed those made a day earlier by Debbie Stabenow, the Michigan Democrat who heads the Senate Agriculture Committee.

While the House Agriculture Committee approved its version of the bill July 12, Speaker John Boehner, Republican of Ohio, never scheduled a vote on the measure.

Lucas’s Support

Still, House Agriculture Committee Chairman Frank Lucas, an Oklahoma Republican, said he supports an extension.

“It is critical that we provide certainty to our producers and address the devastating drought conditions that are affecting most of the country,” Lucas said in a statement.

Lawmakers begin a monthlong recess Aug. 6 and don’t return to Washington until Sept. 10.

The current law authorizing spending for U.S. Department of Agriculture programs, including nutrition and conservation initiatives as well as subsidies, expires Sept. 30. While the legislation has provisions that help farmers insure major crops, a measure that would have provided disaster aid for ranchers expired last September.

Spending Cuts

The draft bill posted today would cost $621 million, if scored over a 10-year period, while saving $399 million if compared with current federal policies, according to a statement from the House Agriculture Committee. The measure would cap some funding for conservation programs and provide a slight reduction in the direct-payment subsidies.

The farm bill approved by the House Agriculture Committee would have cut Agriculture Department spending by $35.1 billion over a 10-year period, with almost half of the savings coming from food aid to needy families. The Senate’s legislation called for reductions of $23.6 billion over a decade, with about $4 billion coming from food stamps.

The agriculture-policy bill has become a prime target for congressional budget cutters because of near record farm profits and the highest-ever expenditure on food stamps.

To contact the reporter on this story: Derek Wallbank in Washington at dwallbank@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

Original Article Here

Grains rise

US soyabean, wheat and corn futures rose on Wednesday, clawing back some of the losses from earlier in the week on renewed worries about crops in the US Midwest hit hard by drought. Soyabeans led the way higher, rising 3 percent as the market edged back toward record highs set late last week. Wheat jumped 2.8 percent, nearing a four-year high.

"The market is looking at is the full supply and demand balance sheet," said Nicole Thomas, analyst with McKeany-Flavell. "Even if the weather takes a turn for the better here in the last few stages of the crop's development, we are still looking at a pretty tight stocks situation. We need to get some price rationing."

Some rain was in the forecast for the next 10 days in northern and eastern parts of the Corn Belt, but large production areas in Iowa, Illinois and Nebraska were expected to remain parched. "The reality of it is we are going to have to see how much rain we are going to actually get," said Sterling Smith, analyst with Citigroup said. "The drought is not over yet."

Better-than-average rainfall was expected next week in Minnesota, Wisconsin, Indiana, Ohio and Kentucky, and in east-central Illinois, predicted Don Keeney, meteorologist for MDA EarthSat Weather. Some rain also was expected in northern and eastern areas this week, but crops in the rest of the growing region will struggle against extreme heat and drought.

Corn's gains lagged behind wheat and soyabeans, weighed down by weakness in the cash market. Traders also said that the crop's woes were already baked into the market and the poor conditions could not support a push back toward last week's records. Unwinding of corn/soyabean spreads and corn/wheat spreads also contributed to corn's relative weakness compared to other agricultural commodities. "Wheat is quite a bit higher, beans are sharply higher and corn is barely higher, that tells me that we are already seeing some of that fund (activity) going on," said Jim Hemminger, senior risk manager with Top Third Ag Marketing. Chicago Board of Trade November soyabeans rose 46 cents to $16.15-1/2 a bushel. CBOT December corn was 9-3/4 cents higher at $7.88 a bushel and CBOT September wheat gained 24-1/2 cents to $9.03-1/4 a bushel.

The drought sparked a month-long grains price rally that saw US corn and soyabean prices hitting record highs on Friday, raising concern about rising global food prices. But prices notched their biggest declines of the summer on Monday and Tuesday on forecasts for rain.

Copyright Reuters, 2012

The Secret Is in the Soil

The headlines are extreme: "Broiling Heat," "Punishing Drought," "Worst in 50 Years." And the images are even worse. Miles of dry, cracked fields, crispy cornstalks, and stoic farmers holding tiny ears of kernel-less corn. More than half of the country is experiencing drought conditions, and counties in more than 25 states have been declared crop disasters by the U.S. Department of Agriculture (USDA). Farmers in some of the areas worst hit by this year's extreme drought are throwing their hands up and mowing down acres of brown and shriveled crops.

Costs of corn and soybeans are going through the roof as more and more crops shrivel up and die. Since more than 80 percent of these crops go to feed livestock, experts are suggesting shoppers may end up seeing this drought reflected in higher prices at the meat counter.

If it seems familiar, it should be. One year ago the news was aflame with the extreme drought of 2011 that parched all of Texas. Farmers, officials and media whispered of devastation reminiscent of the 1930s Dust Bowl. The historic drought was deemed the most costly on record, causing $5.2 billion in agricultural losses.

Chemical ag behemoth Monsanto has been surprisingly silent, despite having trumpeted the only genetically modified drought-tolerant corn variety approved by the USDA for commercial use. Why? Because the product doesn't live up to the promise. According to a new report from the Union of Concerned Scientists, traditional breeding and improved farming practices have actually increased drought tolerance more than genetic modification.

Although there is no magic pill to protect our farms from extreme drought, there is something that can reduce the devastation and help our food, farms, and farming families bounce back: organic farming.

Organic corn produced between 28 and 33 percent more than conventional corn under drought conditions in the Rodale Institute's Farming Systems Trial (FST). The organic corn of the FST was even more successful under drought conditions than genetically modified drought-tolerant seed varieties were in industry trials.

The secret is in the soil. And unlike conventional farming, which decimates soil life with toxic synthetic chemicals designed to kill plant and insect life, organic farming techniques improve the soil's ability to absorb and hold water. Organic agriculture is about providing plants with a support system so they can thrive.

Fertile soil, rich in organic matter and microscopic life, acts like a sponge, holding on to more water during shortages and keeping it from running off during heavy rains. Rather than total crop failure in times of stress, organic plants can rely on the soil to provide a measure of balance. Organic farming can successfully produce food even during extreme weather conditions.

Of course, organic farms aren't impervious. Organic growers across the nation are also struggling to keep their thirsty fields alive, but chances are they will be better equipped to weather this storm (or lack thereof) because they have focused on building good soil.

Coach Mark Smallwood has been dedicated to environmental sustainability, efficiency and conservation for decades. Since joining Rodale Institute in December 2010, he has brought heritage livestock back to Rodale Institute's 333-acre farm, expanded and enhanced Rodale Institute's research efforts, as well as launched "Your 2 Cents," a national campaign to support and promote new organic farmers. In recognition for his sustainability efforts, Coach was chosen as a messenger for Al Gore's Climate Project presenting to over 15,000 people on the effects of Global Warming. Last, but certainly not least, as a long-time organic farmer and biodynamic gardener, Coach has raised chickens, goats, sheep, pigs, and driven a team of oxen.

Original Article here

Agriculture Secretary Tom Vilsack: I pray for rain every day

By Georgetown/ On Faith

U.S. Agriculture Secretary Tom Vilsack listens to a question during a press briefing about the drought in the midwest at the White House in Washington July 18, 2012. Broiling heat has blanketed much of the U.S. Midwest this week, exacerbating the region's worst drought in more than 50 years and devastating corn, soy and other vital crops. (KEVIN LAMARQUE - REUTERS)

“I get on my knees every day and I’m saying an extra prayer right now. If I had a rain prayer or a rain dance I could do, I would do it.”

Original article here

Heat wave and drought besiege already deteriorated crops

By Sam Nelson

It keeps getting worse for the U.S. Midwest, whose corn and soybean crops are deteriorating fast from the harshest drought in more than half a century.

The weather will remain hot and dry for the next week in the western Midwest, though cooler temperatures and light rain in its east may provide some relief from relentless drought, an agricultural meteorologist said Wednesday.

"There's not much change in the forecasts this morning, maybe a little more rain next week, but that's not certain," said Andy Karst, meteorologist for World Weather Inc.

Temperatures in the 90s to low 100s degrees Fahrenheit will blanket western Midwest states such as Illinois, Iowa, Nebraska, Missouri and Kansas, Karst predicted. That will put even more stress on crops already deteriorating rapidly from the worst drought in 56 years.

"There are no soaking rains in sight, nothing to relieve the drought," he said.

An isolated thunderstorm overnight Tuesday left up to 1.50 inches of rain in the Aberdeen, South Dakota area, and the rains extended into portions of western Minnesota.

"There will be some light rains today through Friday in the eastern Midwest of maybe a half inch or less with locally heavier amounts," Karst said.

However, updated forecasts on Wednesday indicated nothing in sight that would stem overall deterioration of the corn and soy crops.

Commodity Weather Group (CWG) on Wednesday said more than half of the Midwest's corn and soybean growing area will keep encountering the most severe stress over the next 10 days due to continued dryness in the central and southwestern Midwest.

U.S. corn production has shrunk 7 percent from the government's downgraded estimate of a week ago, a Reuters poll projected on Tuesday, with a worsening drought expected to cause even more damage before the month is out.

With this worst drought since 1956 beginning to expand to the northern and western Midwest, areas that had previously been spared, analysts were slashing corn yield estimates by the hour. Some were also starting to cut their forecasts on the number of acres that will be harvested as farmers opt to plow under some of their parched fields to claim insurance.

The U.S. Department of Agriculture (USDA), in its weekly crop progress report issued on Monday, said that just 31 percent of the corn crop was in good to excellent shape, down from 40 percent a week earlier and below analysts' average estimate of 35 percent.

Soybean conditions fell to 34 percent from 40 percent in the good to excellent category, likewise below estimates for 35 percent.

The National Oceanic and Atmospheric Administration (NOAA) said in a report on Monday that, based on the Palmer Drought Index, 55 percent of the contiguous United States was under moderate to extreme drought in June. That is the largest land area in the United States to be affected by a drought since December 1956.

Chicago Board of Trade corn prices have soared more than 40 percent in only six weeks as crop prospects have plunged.

(Reporting By Sam Nelson; Editing by John Picinich)

Original Article Here

Corn and soya ease

US corn futures fell on Tuesday for just the second time in two-and-a-half weeks, retreating from Monday's 13-month high on profit-taking and forecasts for rain in some parched areas of the US Midwest by the end of the week. 

Soybeans retreated from a brief, short-covering bounce, slipping further from the all-time, spot-month high the prior session, as investors squared positions ahead of a monthly government crop report on Wednesday. 

Declines were limited by continued concerns about the conditions of both corn and soyabean crops and reduced expectations for the harvests in the fall after weeks of hot, dry weather across most of the Midwest. 

Trading volume was light following Monday's very active session as traders moved to the sidelines before the US Department of Agriculture updates its crop production, ending stocks and world supply/demand forecasts at 7:30 a.m. CDT (1230 GMT) on Wednesday. 

"There's a little more moisture in some forecasts that seems to favor the southern areas where, really, much of the damage has already been done. But it was enough to squeeze some of the nervous longs out of their positions ahead of the report tomorrow," said Shawn McCambridge, analyst with Jefferies Bache. Weekly crop ratings from the US Department of Agriculture (USDA) late Monday confirmed a sharp deterioration in the state of corn and soya crops, keeping ratings at their lowest level since 1988. 

Chicago Board of Trade new-crop December corn fell 12-1/2 cents, or 1.7 percent, to $7.17-1/2 a bushel after hitting a contract high of $7.33 a bushel the day before. Spot ethanol futures fell 1.4 percent to $2.468 a gallon after hitting a seven-month peak of $2.524 on a continuous chart the previous day. 

November soyabeans, the most-active contract, shed 9-1/4 cents, or 0.6 percent, to $15.38-1/2 a bushel. The thinly traded spot contract, which climbed to a record top of $16.79-1/2 a bushel in the last session, fell 16-1/4 cents, or 1 percent, to $16.48-3/4. 

Commodity funds sold an estimated net 11,000 corn and 6,000 soyabean contracts on the day, trade sources said. 

CBOT September wheat fell 7 cents to $8.21-1/4 a bushel. November milling wheat on the Paris futures market settled 0.25 euro lower at 248.50 euros a tonne after setting a new contract high at 250.25 euros in the previous session. 

Copyright Reuters, 2012

Soybean Fundamentals Remain Strong

US soybean market fundamentals have been strong for an extended period of time, says University of Illinois agricultural economist Darrel Good.

"The strong fundamental factors have included record large exports in 2009-10 and 2010-11 as Chinese demand expanded, a reduction in US soybean acreage in 2011, a relatively low US average yield in 2011, intentions to reduce US acreage again in 2012, and a very small soybean harvest in South America this year," Professor Good said. "These strong market fundamentals continue in the form of a rapid pace of consumption and concerns about the size of the 2012 US crop."

Good reported that soybean prices began moving higher in July 2010, starting from about $9.50. July 2012 soybean futures reached a high of about $14.70 in late August 2011, declined to a low near $11.25 in mid-December 2011, and reached a high of $15.12 in early May 2012.

Prices have been very choppy the past two months, but the July futures contract is now trading within about .30 cents of the early May high. November 2012 futures prices have been lower than July futures but have followed a similar pattern and are now trading at a contract high near $14.30.

"The pace of the domestic soybean crush started slowly this year," Professor Good said. "The National Oilseed Processors Association reported that its members crushed 7.7 per cent fewer soybeans in the first quarter of the 2011-12 marketing year than in the same quarter the previous year."

Crush during the second quarter, however, was 2.3 per cent larger and crush during the third quarter was 7.2 per cent larger than in the respective quarters last year. Crush during the first three quarters of the year was 0.3 per cent larger than the crush last year. For the year, the USDA projects the crush to be 0.7 per cent larger than during the 2010-11 marketing year, he said.

"It now appears that the crush may exceed that projection for several reasons. First, crush was relatively small in the fourth quarter of the 2010-11 marketing year. Second, the pace of domestic soybean meal consumption has been expanding. Third, the small South American crop may support US soybean meal exports above the current projection. The crush may be about 10 million bushels larger than the current projection of 1.66 billion bushels," Professor Good said.

At the beginning of the marketing year, the USDA projected US exports at 1.415 billion bushels, said Professor Good. The projection was reduced as the year progressed and was at 1.275 billion bushels by January 2012.

"The forecast, however, increased beginning in April and now stands at 1.335 billion bushels," he said. "Total export sales already exceed that projection, which is common, and exports will need to average about 13 million bushels per week during the last 10 weeks of the year to reach the projection."

The current pace of exports is a little slower than the needed pace, but exports are still likely to reach the projected level. While the pace of exports has slowed in a typical seasonal pattern, sales for export during the 2012-13 marketing year are record large, underscoring the strength in Chinese demand.

"The USDA will update the projections of consumption and ending stocks for both marketing years on July 11. The estimate of June 1 stocks, to be released on June 29, will provide some confirmation about the pace of consumption and likely year-ending stocks," Professor Good said.

With prospects for relatively small year-ending soybean stocks, the focus is quickly turning to the prospective size of the 2012 US crop. An estimate of planted and harvested acreage will be available with the USDA's 29 June Acreage report.

"With the soybean price rally that occurred this spring, it would not be surprising if acreage exceeded intentions reported in March," Professor Good said. "While acreage estimates will influence production prospects, the major focus will be on yield prospects."

In the June WASDE report, the USDA projected a US average yield of 43.9 bushels and 2012-13 marketing year-ending stocks at what is generally considered to be a minimum level of 140 million bushels. Good said that the trend yield for 2012 is 43.4 bushels, 1.9 bushels above the 2011 average yield.

"Continuation of stressful weather in the central and eastern growing areas along with declining crop condition ratings suggest that the 2012 yield could be below trend again in 2012," Professor Good said. "A shortfall in production would require that consumption during the year ahead be reduced from the current USDA projection of 3.255 billion bushels. The recent price rally is in recognition of the rationing that may be required.

"Unless weather and crop conditions improve soon, which does not appear likely, additional price strength is expected," Professor Good said. "Talk of the 2008 futures price peak near $16.60 has surfaced. While prices at that level are not yet justified, they are within the range that we have projected for the 'new era' of prices that began in 2007."

ThePoultrySite News Desk

US agriculture chief to visit Cincinnati, Columbus

CINCINNATI (AP) - U.S. Agriculture Secretary Tom Vilsack is traveling in Ohio to talk about a jet fuel project and food-related research.

His Wednesday trip to Cincinnati is meant to highlight his department's collaboration with General Electric Aviation, air carriers and other partners on a regional approach to offer renewable jet fuel. GE Aviation is based in the Cincinnati suburb of Evendale.

A Department of Agriculture grant will help researchers refine jet fuel from soybean oil in a pilot project at Ohio State University in Columbus, where Vilsack is scheduled to visit Thursday to tour a food-related research facility.

Vilsack also will stop Wednesday in Washington Court House to mark national home ownership month and see a housing development with homes financed through a USDA program.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Original Article Here

US grains fall

US corn, soya and wheat futures fell on Thursday as profit-taking and concerns about a slowdown in global economic growth overshadowed worries about dry weather threatening US crop prospects. Grains and other commodities weakened after data showed Chinese, European and US manufacturing activity slowing further and risk aversion swept across financial markets.

Grains "would be up double-digits if it were not for the outside markets, specifically the crude oil market and this 'risk-off' mindset," said Mike Zuzolo, president of Global Commodity Analytics in Lafayette, Indiana. Business activity across the euro zone shrank in June for a fifth straight month, and Chinese manufacturing contracted, while weaker overseas demand slowed US factory growth, surveys showed. The HSBC Flash Purchasing Managers Index, the earliest monthly indicator of China's industrial activity, fell to a seven-month low of 48.1 in June from 48.4 in May.

"We've had several piece of economic news that would say we are slowing down. So the fund mindset right now is, 'why buy grains,' even though the weather says you should be buying them," Zuzolo said. At the Chicago Board of Trade, July corn fell 25-1/4 cents, or 4 percent, its biggest decline in a month, to settle at $5.86-1/2 per bushel. Most-active December ended down 16-1/2 cents at $5.50.

July wheat ended down 2-1/4 cents at $6.61-3/4 per bushel. July soyabeans fell 8 cents at $14.38-1/2 a bushel while new-crop November ended down 24-1/4 cents at $13.71-1/4.Along with the economic worries, nearby corn was pressured by softer cash markets. Two ethanol plants in Nebraska were temporarily idled in recent days due to poor profit margins, and on Thursday the spot basis bid for corn at Decatur, Illinois, a key processing site, fell sharply, reflecting slowing demand.

As well, weekly corn export data fell below trade expectations. The US Department of Agriculture reported export sales of US corn in the latest week at 381,000 tonnes, including sales for the current and new marketing years. The figure fell below trade estimates for sales of 450,000 to 650,000 tonnes. Traders set aside worries about dry crop weather that supported the market this week, as temperatures cooled slightly and rain fell in parts of Illinois. However, an updated long-term forecast from the National Oceanic and Atmospheric Administration indicated above-normal temperatures across most of the Midwest through July.

Copyright Reuters, 2012

Department of Agriculture exploring other locations

By Andy Marso 

THE CAPITAL-JOURNAL

The Kansas Department of Agriculture is exploring moving its headquarters to Manhattan or southwest Kansas next year.

The Department of Administration, which handles leasing and facilities management for state agencies, has listed online three bid solicitations for office space for the Department of Agriculture. The solicitations, which have the same specifications and are dated June 14, request bids from Topeka, Manhattan and "Great Bend, Garden City and/or Dodge City."

Max Foster is the Department of Agriculture official listed on the solicitations as the contact person for tours of the department's current office space in the Mills Building at 109 S.W. 9th. Foster said Monday that the department's lease is up September 30, 2013, which is why the bid solicitations list the "desired occupancy" date as "on or before" Oct. 1, 2013.

Dale Rodman, Kansas secretary of agriculture, said through a spokeswoman that the department has been working for the past six months to "identify potential options to meet all needs for the department."

"As KDA receives more information about all possibilities, we will begin reviewing all available options while focusing on the core responsibilities of the department and providing those in the most efficient and effective manner possible," Rodman said.

The bid solicitations state that in order to be considered, the leased spaces must accommodate 20 to 180 workers. The Department of Administration's online directory currently lists 172 Department of Agriculture employees in Topeka.

Doug Kinsinger, president and CEO of the Greater Topeka Chamber of Commerce, said it was the first he had heard of the department possibly moving.

"Our position has always been that the capital is the most suitable place for the departments and especially their head offices," Kinsinger said. "We've had many dialogues with Gov. Brownback and his administration about that."

Brownback's office didn’t respond to an emailed request for comment by close of business Monday.

Kinsinger said Topeka "sees a substantial economic impact" from hosting state agencies as the capital city.

"This economic impact ranges from the direct purchases the agency and departments make of supplies and services from a wide variety of vendors to the indirect economic impact of the agency's employees, their families and their purchases," Kinsinger said.

As the director of the Department of Administration's Office of Facilities and Property Management, Mark McGivern is the state official in charge of leasing office space to state agencies.

McGivern said his office tries to keep its finger on the pulse of what current rental rates are across the state "in places where we have a preference."

"The process that we would undertake, generically, is wherever the agency is interested in relocating to. Typically there's chambers of commerce or real estate committees and you can get market info for that particular market if you just know the right person to talk to," McGivern said.

Kinsinger said keeping the Department of Agriculture in Topeka makes sense, given the presence of related organizations like the U.S. Department of Agriculture, the Kansas Grain and Soybean Association, Kansas Feed and Seed, the Kansas Soybean Association, the Kansas Co-op Association and the Kansas Livestock Association.

"Having the vast majority of agricultural-related organizations in the capital of Kansas allows communication and cooperation to be efficient and productive," Kinsinger said. "In addition, there is also the key benefit and value of being close to the Legislature and the governor's administration."

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Agriculture Futures Preview

Argentine grain farmers call national sales halt

Argentine farmers announced a 1-wk nationwide halt to grain sales Tuesday to protest higher taxes in Key farming province Buenos Aires, a move that lifted US Soybean futures as traders braced for tight supplies.

Already upset about the national government’s policy of Wheat and Corn export curbs that hurt profits, growers say the tax increase will force some of them to sell their fields.

Russia 2012 grain output seen at 88-M tons

Following are selected highlights from a report issued by a US Department of Agriculture attache in Russia:

“FAS/Moscow forecasts grain production in Russia in Y 2012 at 88-M tons. This includes a forecast of 54-M tons for Wheat, 16-M tons for Barley and 6.5-M tons for Corn. Wheat production is expected to fall from last year as a result of Spring dryness in Key producing regions.

LTN’s closing Grain comments

Bullish fundamentals meeting interested investors

Wednesday’s action was a case study of how markets can explode when investors open their wallets to buy fundamentally bullish commodities. Old-crop Corn and soybeans exploded to the upside on tightening supply outlooks. Wheat remained in its follower role lagging behind most other markets.

US Agriculture after the Closing Bell Report

Chicago Wheat finised 0.075 to 0.11 higher, Kansas City Wheat was 0.0975 to 0.195 higher and Minneapolis Qheat closed 0.08 to 0.1525 higher. Price action in after-hours trade was choppy, as some contracts gained and others softened from the settlement levels. Sharp weakness in the USD index due to expectations the Federal Reserve would announce some kind of stimulus sooner rather than later resulted in a risk-on attitude in commodities

Corn futures rallied into the close of pit trade to finish at or near session highs Wednesday, with gains of 0.1875 in the Jul contract while other contracts were around 0.11 to 0.13 higher. Futures mildly trimmed gains in after-hours trade. A sharply lower USD thanks to speculation another round of quantitative easing (QE-3) may lie ahead gave traders reason to cover Short positions Wednesday

Soybean futures posted strong gains today, settling 0.09 to 0.3675 higher with old-crop contracts leading gains. Gains were mildly trimmed in after-hours trade. Funds bought an estimated 8,000 contracts, 40-M bu of Soybeans Wednesday. Outside markets were supportive as were weather concerns and news of a daily Soybean sale to China for CY 2011-12.

Lean Hog futures closed 0.10 to 1.125 higher, which was an upper-range close in most contracts. Hog futures rode a wave of outside market support to price gains Wednesday. Support also came from the cash Hog market, which was steady to firmer at most Midwest locations despite highly negative packer margins.

Jun live Cattle settled high-range with a gainer of 0.55. The rest of the Y 2012 contracts finished low-range with gains of 0.10 to 0.175. Traders in the Cattle market engaged in some cautious short-covering as they waited for cash Cattle trade to begin. Traders appear comfortable with nearby contracts’ discount to last week’s mostly 121.00 cash trade, as they question the sustainability of boxed Beef demand with prices near record highs.

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Argentine farmers start strike in top grains region

Farmers in Argentina's biggest agricultural province started a nine-day freeze on grains sales on Saturday to protest a tax hike by the cash-strapped local government, reviving tensions in the countryside. The protest by farmers in Buenos Aires province is not expected to cause much disruption to shipments of corn and soy from Argentina, a leading global exporter, because soy-crushing factories and ports usually have several days stocks.

Their strike is a challenge to Governor Daniel Scioli, however, as he battles to keep provincial finances afloat against a backdrop of double-digit inflation and slower revenue growth. Scioli, seen as a possible successor to President Cristina Fernandez in a 2015 election, has had until now a more harmonious relationship with farmers, who halted sales for months in 2008 to protest a federal tax hike on soy exports.

Scioli, a moderate member of Fernandez's Peronist party, managed to push the tax hike through Congress this week despite the earlier reluctance of some lawmakers sympathetic to the farmers' complaints. He played down the impact of the updated land valuation, which officials say was long overdue, and said only 38 percent of farmers would face a bigger levy. Recent flooding capped a difficult season for Argentine soy and corn farmers after a drought in December and early January ruined some crops and slashed yields.

Copyright Reuters, 2012

US Agriculture after the Closing Bell Report

The flight out of commodities by investors continued Thursday as Soybeans and Wheat both closed below initial support levels. New-crop corn rallied modestly as reported rain totals from Thursday continue to come in disappointing.

Wheat futures were under pressure throughout the session Thursday, and most contracts finished with losses of 0.06 to 0.14. Futures trimmed losses slightly in after hours trade. Harvest pressure continues to encourage selling in the Wheat pit, especially as dryness concerns overseas have subsided. The HRW crop has limped into the finish, however, keeping selling interest in check.

Corn futures closed mixed and remained choppy in after-hours trade. Given the fact Soybean futures ended 0.20- to 0.30 + lower in most contracts, Corn held up relatively well. Pressure on Corn to end the month was limited by concerns recent rains have not been widespread enough to erase drought conditions.

Soybean futures sold off into the close and finished mostly 0.1775 to 0.3325 lower, with nearby contracts bearing the brunt of pressure. Traders trimmed losses slightly in after hours trade. Soymeal and Soyoil also closed with moderate losses. Funds sold 8,000 Soybean contracts today, 40-M bu. Risk aversion on disappointing US economic data was the dominant attitude ahead of the calendar flip to Jun.

Lean Hog futures gapped higher on the open and buying interest mounted as the day progressed. Jun through Aug futures closed 2.125 to their 3.00 limit higher, and most deferred contracts saw $1+ gains. Traders were Bullish as they evened positions ahead of the calendar flip, largely thanks to a 1.95 rise in Pork cutout values yesterday along with strong movement.

Live Cattle futures ended about where they began, which was good for a mid-range finish. Futures closed 0.65 to 1.025 higher in the Y 2012 contracts. Cattle futures were supported in part by ideas yesterday’s losses were overdone, with fundamental support coming from the Beef market. Choice beef values were up 0.77 this morning and Select declined 0.51 on strong movement of 114 loads.

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