June 30, 2015

USDA Hogs and Pigs Report Shows Continued Expansion

According to the USDA, the US inventory of all hogs and pigs on June 1 was 66.9 million head. That’s up nine percent from one year ago and up slightly from the March report. The breeding swine inventory totaled 5.9 million head, up one percent from last year, but down one percent from last quarter. The market hog inventory was at 61 million head, up nine percent from last year and up one percent from the last quarterly report.

Jim Robb, who is with the Livestock Marketing Center, uses the US national average weighted basis price when forecasting hog prices. In addition to the USDA numbers, Robb expects pork imports over the balance of this year impacting prices…

Robb 1

David Miller, who is the director of research and commodity services, for the Iowa Farm Bureau Federation, is seeing a geographic shift in hog production…

Miller 2

Miller says there were more hogs on feed in the under 50 pound category for every state, except Minnesota.


Crop Conditions Show Surprising Slip

USDA’s weekly Crop Condition numbers yesterday showed some surprising changes in crop condition but not in the direction traders had originally expected.  Despite the warmer temperatures early in the week, it appears the overall moisture events that occurred toward the end of the week were a bit too much.  Additionally, the slow pace of soybean planting in Missouri is also sparking concerns.

As of Sunday, June 14th, USDA is reporting nearly all of the U.S. corn crop is out of the ground and emerged.  That rate was about as expected but it was the declining condition ratings that offered more interest.  The 2015 corn crop remains in good condition but contrary to analysts expectations, conditions fell by 1% from last week to 73% good to excellent and 3% less than this time last year.  Of the 25 states reporting condition ratings, the good to excellent category declined in 15 of them including the Dakotas, Minnesota, and Illinois.

In soybeans, the analysts became more complex as traders try to determine the effect of late planting and/or the occurrence of prevent plant in the states of Missouri and Kansas, both of which are running well behind average.  On the whole, soybean planting is reported at 87% complete compared to 90% on average with Missouri 42% planted compared to 79% on average and Kansas 57% planted compared to 85% on average.  Accordingly, emergence was a bit behind at 75% compared to the “normal” level of 77%.  Here too, condition ratings declined, down 2% on the week to 67% good to excellent and 8% less than last year at this time.

Expectations are that moderate to heavy rains will persist over Missouri and Southern Illinois with flooding possible this week depending on the exact track of Tropical Storm Bill as it pushes out of the Gulf of Mexico and up over Texas.  The excess moisture is not viewed as helpful at this time.

Wheat conditions were a bigger mix this week with early week dryness in the Southern Plains allowing combines in Texas to catch up to average at 47% complete.  Other hard red winter wheat states of Oklahoma and Texas remained behind and are unlikely to see much action this week. Still condition ratings for the nations winter wheat held steady at 43% good to excellent.

Of all the areas in the U.S., the Northern Plains saw the least moisture although the drought concerns of April are now a thing of the past.  The warmer temperatures and lower moisture allowed plants to flourish, according to analysts, with USDA reporting hard red spring wheat conditions improving by 1% on the week.  Barley conditions fell by 1% to 75% good to excellent while oats also improved by 1%.


House Passes TPA, But Not So Fast . . .

It was an important week this week for the House of Representatives as they moved into debates and discussion about the long awaited Trade Promotion Authority Bill, a measure proponents of the Trans-Pacific Partnership say is necessary to move ahead with negotiations.  TPP is believed by many in agriculture to be vital to securing access to the worlds fastest growing markets in South-east asia.  House Ag Chair Michael Conaway in his push Thursday to Advance to a final TPA vote:

Conaway TPA

Later on Thursday, The House approved, by the barest of margins, the procedural rule for debating Trade Promotion Authority, retraining aid for workers laid off due to trade and customs enforcement. The 217 – 212 vote was close enough to spark an unusual visit capital hill by President Obama, who made a late push to encourage democrats to vote for the legislation.  House Ways and Means Committee Chair Paul Ryan, framed the debate as a reflection on the U.S.’s world power intentions going forward:

Ryan 2 TPA

Democrats, and not all Republicans were convinced TPA is the way to go, however, more on that up next, on the American Ag Network.

Friday was the final vote on Trade Promotion Authority for the President, but in an unusual twist, it was the President’s own party who expressed concerns with the legislation.  The concerns ranged from environmental to labor to currency manipulation and everything in between.  Sander Levin, Ranking member of the House Ways and Means Committee

Levin -TPA

The TAA vote came first on Friday and was crushed by 302-126 vote.  That alone killed the TPA bill from moving on to the president, but Speaker John Boehner surprised Democrats and moved to vote on the TPA section anyway.  The vote passed, barely, at 219-211.  Because of that passage, Boehner proposed to reconsider the TAA amendment, and that vote has been postponed until Monday or perhaps Tuesday.