Monday, October 31, 2022

USDA Crop Progress Report - First Winter Wheat Condition Rating for 2023 Crop Well Below Last Year

OMAHA (DTN) -- Dry conditions this fall in the winter-wheat-producing Southern Plains already are taking a toll on the newly planted 2023 crop, USDA NASS reported in its weekly Crop Progress report on Monday. However, some parts of the region could receive some beneficial rains later this week, according to DTN forecasts.

CORN

-- Harvest progress: 76% of corn was harvested as of Sunday, Oct. 30, up 15 percentage points from the previous week. This year's harvest progress is now 3 percentage points ahead of last year's 73% and 12 percentage points ahead of the five-year average of 64%. "Illinois is 71% done harvesting corn, Iowa is 77% harvested and Minnesota is 80% done," noted DTN Senior Analyst Dana Mantini. "Wisconsin is the slowest, at 37% harvested."

SOYBEANS

-- Harvest progress: 88% of the crop was harvested as of Sunday, up 8 percentage points from the previous week. That is now 10 percentage points ahead of last year's 78% and 10 percentage points ahead of the five-year average of 78%. "Illinois is 89% done, Iowa is at 94% and Minnesota is 98% harvested," Mantini said.

WINTER WHEAT

-- Planting progress: 87% of winter wheat was planted as of Sunday, 1 percentage point ahead of last year and 2 percentage points ahead of the average pace of 85%.

-- Crop development: 62% of winter wheat was emerged as of Sunday, 4 percentage points behind the five-year average of 66%.

-- Crop condition: In its first condition rating for the 2023 crop, USDA NASS rated U.S. winter wheat 28% in good-to-excellent condition, 17 percentage points below last year's rating of 45% good to excellent. "Kansas is rated at 24% good to excellent with 42% very poor to poor, while Oklahoma is 11% good to excellent with 36% rated very poor to poor," Mantini said.

WEEK AHEAD IN WEATHER

Some dry, winter-wheat-growing areas of the country could see some rain later this week, according to DTN Ag Meteorologist John Baranick.

"This week is going to be a week of two halves for the middle of the country," Baranick said. "Early on, warm and dry conditions are leading to good conditions for the final stages of harvest. But a trough is digging into the Western states early on. A cold front will gradually move into the region between the Rockies and Mississippi River in the middle of the week and produce some scattered showers.

"But it will be a low-pressure center that develops on that front in Texas on Friday or Saturday that will move northeast along the front up to Hudson Bay over the weekend. The storm will be able to tap into some colder air and may turn some of this precipitation into accumulating snow, most likely over the High Plains behind the front toward the end of the week and across the Upper Midwest over the weekend. East of the Mississippi River, after a few isolated showers leave on Monday, conditions will be very good for getting out into the field to finish up harvest.

"The rains in the middle of the country will promote some improvement for soil moisture for hard red winter wheat, but not everywhere. Drought will improve from northern Texas to Minnesota and Wisconsin but will remain for a lot of areas. We may also see some slight improvements to the river levels on the Lower Mississippi River, but it is hard to imagine it producing large improvements. It will just take much more precipitation."







Bureau of Reclamation, Pacific Northwest Region - Storage Reservoirs in the Upper Snake River (10/31)



Average daily streamflows indicated in cubic feet per second.

Reservoir levels current as of midnight on date indicated.

Upper Snake River system is at 15 % of capacity.
(Jackson Lake,Palisades, Grassy Lake,Island Park,Ririe,American Falls,LakeWalcott)
  
Total space available:3447103 AF
Total storage capacity:4045695 AF



Friday, October 28, 2022

Friday Market Watch

LIVESTOCK:

The live cattle complex closed in a mixed fashion by Friday's end, as the cattle complex saw hit and miss support from traders while the lean hog complex went higher. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.15 with a weighted average of $90.54 on 2,941 head. 

From Friday to Friday, livestock futures scored the following changes: October live cattle down $0.10, December live cattle up $0.57; November feeder cattle down $0.47, January feeder cattle steady; December lean hogs down $3.02, February lean hogs down $1.68; December corn down $0.04, March corn down $0.04.

Friday's slaughter is estimated at 124,000 head, 2,000 head more than a week ago and 4,000 head more than a year ago. Saturday's slaughter is estimated at 32,000 head. This week's estimated slaughter stands at 668,000 head, 5,000 head less than a week ago and steady with a year ago.

Boxed beef prices closed higher: choice up $0.77 ($263.26) and select up $2.58 ($234.49) with a movement of 93 loads (50.42 loads of choice, 10.32 loads of select, 15.27 loads of trim and 16.56 loads of ground beef). The choice/select spread sits at $28.77. Throughout the week choice cuts averaged $261.19 (up $9.26 from last week) and select cuts averaged $229.59 (up $7.69 from last week) and the week's total movement of cuts, grinds and trim totaled 607 loads.

More: Friday Closing Livestock Market Update - Traders Turn to Next Week


GRAINS:

December corn closed down 1 1/2 cents and July corn was down 1/2 cent. January soybeans closed up 6 3/4 cents and July soybeans were up 7 cents. December KC wheat closed down 7 1/4 cents, December Chicago wheat was down 9 1/4 cents and December Minneapolis wheat was down 5 1/2 cents. 

For the week:

December corn closed down 1 1/2 cents and July corn was down 3 cents. January soybeans ended down 4 1/4 cents and July soybeans were down 3 cents. December KC wheat closed down 23 1/4 cents, December Chicago wheat was down 21 1/2 cents and December Minneapolis wheat was down 16 1/2 cents.


DAIRY:


More: Friday Closing Dairy Market Update - Fluid Milk Sales Increase 0.8%


FORAGE: This Week's Hay Market Report (forage fodder blog)


OUTSIDE MARKETS:

The December U.S. Dollar Index is trading up 0.25 at 110.71. The Dow Jones Industrial Average is up 761.53 points at 32,794.81. December gold is down $20.70 at $1,644.90, December silver is down $0.34 at $19.16 and December copper is down $0.0820. December crude oil is down $1.34 at $87.74, December ultra-low sulfur diesel is up $0.0316, December RBOB gasoline is down $0.0944 and December natural gas is down $0.190.




Thursday, October 27, 2022

This Week's Drought Summary (10/27)

A large shift in the weather pattern occurred this week across the lower 48 states. Early in the week, low pressure exited the Great Lakes region, allowing temperatures to gradually moderate during the latter half of the week across portions of the eastern contiguous U.S. (CONUS). In the western CONUS, high pressure broke down as a strong storm system moved into the Pacific Northwest heading into the weekend. As this storm system moved eastward into the Great Plains through the weekend and leading up to Tuesday, October 25, many locations across the western and central CONUS experienced above-normal precipitation, with cooler than normal temperatures in the system’s wake. However, with surface high pressure early in the week followed by southerly flow ahead of the storm system, warm temperatures dominated much of the central CONUS for the week as whole, with above-normal average temperatures also extending northeastward into the Great Lakes and Northeast. Unfortunately, given the expanse of drought and abnormal dryness across the U.S., antecedent dryness led to another week of degradations for many not receiving rainfall, even in areas where temperatures were cooler than normal this week. Warm conditions and high winds further exacerbated conditions in drier areas across the Great Plains. Fortunately, in areas seeing the heaviest rainfall amounts, particularly across the Southern Plains and Ozarks, some improvements were also warranted.



Northeast

A storm system moving exiting the Great Lakes early in the week and a coastal storm moving northward along the Eastern Seaboard toward the end of the week resulted in another round of improvements to long-term drought conditions across parts of New England and the Mid-Atlantic. In addition to several locations observing above-normal precipitation for the week, a persistent wet pattern in recent weeks has warranted targeted improvements in areas not receiving above-normal precipitation, as long-term drought indicators have continued to improve. Conversely, parts of western New York have experienced several weeks of dryness, resulting in 30-day standardized precipitation indices (SPIs) to drop significantly. Average stream flows and soil moisture have also steadily declined over the past 30 days across areas that are degraded to the abnormally dry (D0) depiction this week in western New York.

Southeast

The exiting storm system in the Great Lakes followed by a coastal storm system that developed off the coast of the Carolinas kept temperatures cooler than normal for the Southeast this week. In addition, high pressure dominated the region during this time, resulting in a dry conditions throughout the region. Given the antecedent dryness in recent weeks and this week’s below-normal precipitation, widespread 1-category degradations were warranted this week. The southern Appalachians are experiencing some of the worst drought conditions presently (D2 – severe drought), as shallow soil moisture has fallen below the 10th percentile of the historical distribution and 7-day average stream flows are continuing to fall near and below the 10th percentile. Locals are reporting crop stress, poor pastures, and several producers have already started supplemental feeding of livestock in some locations. The planting of winter wheat has also been delayed due to the recent dryness.

South

A storm system moving out of the Rockies and intensifying across the Southern Plains dropped in excess of 2 inches of rainfall in a large swath from northeastern Texas to the western Ozarks, warranting 1-category improvements across many of these locations. In surrounding areas that received heavier precipitation amounts, improvements were more targeted in nature, as amounts were not enough to eliminate 90-day deficits. Farther eastward, from the Lower Mississippi Valley to the Tennessee Valley, antecedent dryness and a drier than normal week resulted in another round of widespread 1-category degradations.

Midwest

In similar fashion as the Southern Region, antecedent short-term (30 to 60-day) dryness has resulted in the widespread expansion of abnormally dry (D0) and moderate (D1) to severe (D2) drought conditions. Given the much of the region experienced above-normal temperatures and below-normal precipitation again this week, it warranted another round of 1-category degradations, particularly across the Ohio Valley. Soil moisture ranks in the bottom 20 percent of the historical distribution, according to various soil moisture products. In addition, 30 to 60-day standardized precipitation indices (SPIs) range anywhere from D1-equivalent (moderate drought) to D4-equivalent (exceptional drought), with 30-day SPIs indicating the more severe designations. Parts of Missouri and the central Corn Belt were the only areas that received enough rainfall to improve drought conditions or stop ongoing degradation this week. More than 2 inches of rain fell across the western Ozarks leading to broad 1-category improvements to the drought depiction in affected areas, as rainfall totals improved short-term precipitation deficits and topsoil moisture and 7-day average stream flows responded favorably.

High Plains

Above-normal temperatures, below-normal precipitation, and periods high winds resulted in degradations to ongoing D1 (moderate) to D4 (exceptional) drought across the Central Plains, east of the Front Range. Stock ponds for cattle remain low to non-existent and pastures are providing marginal feed, with supplemental feed required for many. Conversely, the storm system that moved across the Intermountain West during the weekend dropped heavy precipitation across the higher elevations of Wyoming and Colorado and parts of the Northern High Plains from Montana eastward to North Dakota. Unfortunately, even though several areas experienced in excess of 1 inch of precipitation (greater than 1.5 inches for many locations across the Northern High Plains), short to long-term drought indicators did not show many signs of improvement by Tuesday, October 25. Only surface soil moisture showed some improvement, with sparse 7-day average stream flows also improving, corroborated by ground reports. As such, given the lack of response in the indicators, much of the Northern High Plains remain unchanged this week.



West

A strong storm system moved into the western U.S. heading into the weekend and moved across the Intermountain West leading up to Tuesday, October 25. Many locations across the Pacific Northwest, Great Basin, and the Rockies received in excess of 0.5 inches of rainfall, with the heaviest amounts (greater than 1 inch, with locally higher totals) concentrated across the Pacific Northwest, Idaho, and Montana. Precipitation was not enough to improve drought conditions in the Pacific Northwest, but was enough to halt another week of degradation along the windward slopes of the Cascades and Coastal Ranges. Only areas east of these ranges, in the rain shadows, experienced some targeted degradations. Farther south, D2 (severe) drought degraded to D3 (extreme drought) north of San Francisco, where USGS 28-day average stream flows have fallen below the 2nd percentile of the historical distribution, CPC soil moisture indicates D4-equivalent (exceptional drought) conditions, and the long-term objective drought blend depicts D3 conditions. Elsewhere, localized and targeted improvements were made across the Intermountain West, based on 7-day precipitation totals and improvements short-term precipitation deficits.



Caribbean

In Puerto Rico, USGS 7 to 14-day average stream flows have continued to decline again this week across the eastern tip of the island, with several stations falling below 10th percentile. NASA GRACE soil moisture also indicates below-normal soil moisture across this area. Therefore, D0 (abnormal dryness) was introduced to the eastern tip of the island.

In St. Thomas, the Cyril E King Airport had 0.65 inch of rain for the week and 1.66 inches (or 41.1% of normal) for the month-to-date. Year-to-date rainfall was at 89.5% of normal. Rainfall across the CoCoRaHS stations ranged between 0 to 0.95 inch. SPI values for the 1 month were indicative of severe drought, while drought free conditions were indicative at the 3, 6, and 9 months. SPI at the 12-month period is indicative of abnormally dry conditions. Groundwater levels at the Grade School 3 Well were steadily decreasing. St. Thomas drought classification was changed to short-term abnormally dry conditions.

The Henry Rohlsen airport in St. Croix received only 0.34 inch of rain this week, resulting in a month-to-date rainfall total of 1.77 inches or 48.1% of normal. Year-to-date total was 106.3% of normal. CoCoRaHS stations rainfall totals ranged between 0.04 to 0.70 inch for the week. SPI values at the 1 month were indicative of moderate drought, while the 3, 6, 9, and 12 months were indicative of drought free conditions. Despite some improvement on groundwater levels during September and early October, the levels are well below those seen in 2016. St. Croix's drought classification was changed to short and long-term abnormally dry conditions.

Drought free conditions persisted across St. John. The Windswept Beach had the most rainfall this week at 1.25 inches. The month-to-date total was 3.35 inches or 72.8% of normal. Year-to-date totals were 90.8% of normal. SPI values at the 1 and 12 months were indicative of abnormally dry conditions, while the 3, 6, and 9 months showed drought free conditions.

Pacific

Despite above-normal temperatures this week across Alaska, decent seasonal rainfall totals state-wide and time of year has swayed drought from developing. Therefore, Alaska remains drought-free this week.

In Hawaii, a cold front brought some enhanced rainfall to portions of the islands this week, with rain falling mainly on the north and northeast-facing slopes. Following the passage of the frontal boundary, returning trade winds were strong enough to bring rainfall to the windward slopes as well. Therefore, several 1-category improvements were warranted for interior Kauai and Oahu, northern Molokai, and eastern parts of the Big Island.

This was a wet week for most locations across the US Affiliated Pacific Islands, with rainfall totals surpassing their weekly threshold to meet most water needs. Pohnpei (6.33 inches), Fananu (8.48 inches), Yap (13.08 inches), and Pingelap (7.59 inches), in the Federated States of Micronesia (FSM), as well as Airai in Palau (7.26 inches) had the most notable precipitation amounts this week with rainfall totals surpassing 6 inches. These locations along with the Mariana Islands, Chuuk and Kosrae in the FSM, American Samoa, and most locations across the Marshall Islands continued to be free of drought.

In the Marshall Islands, Wotje was the only location to receive less than 1 inch of rain. This week marked the third consecutive week of little to no rain, resulting in a month-to-date rainfall total of only 3.10 inches. For this reason, Wotje's drought classification was changed to short-term abnormally dry conditions.

In the FSM, Kapingamarangi' continued to be in short and long-term severe drought since no rain fell this week. Lukunoch remained in short-term abnormally dry conditions since rainfall totals were less than 2 inches.

Looking Ahead

During the next five days (October 27-31), the storm system that brought heavy rainfall to parts of the Southern Plains will bring rainfall to parts of the eastern Great Lakes and Northeast before exiting the U.S. The pattern will remain active across the remainder of the CONUS. However, much of the precipitation potential will be across the Southern Plains, extending eastward across parts of the Deep South, associated with a low pressure system that is forecast to intensify over the Southern Plains by the weekend before moving eastward through the remainder of the week. The Pacific Northwest is also expected to remain active through Monday, October 31. Additionally, near to below-normal temperatures are expected across the West Coast and much of the Southern Tier of the CONUS, along the predicted storm track. Farther north from the Northern Plains to the Northeast, predominantly above-normal temperatures are forecast due to a lesser influence from the storm track farther south.

The Climate Prediction Center’s 6-10 day outlook (valid November 1-5) predicts increased chances of below-normal temperatures and above-normal precipitation across the western half and two-thirds of the CONUS, respectively, associated with mean mid-level low-pressure. Meanwhile, mid-level high pressure favors above-normal temperatures from the Great Plains to the East Coast and drier than normal conditions from the Mississippi Valley eastward. In Alaska, a southerly storm track favors predominantly above-normal precipitation and is forecast to keep temperatures cooler than normal.



Monday, October 24, 2022

USDA Crop Progress Report - Corn 61% Harvested, Soybeans 80% Harvested Week Ended Oct. 23

OMAHA (DTN) -- Chilly but mostly dry weather allowed corn and soybean farmers to pull further ahead of the average pace in harvesting their crops last week, USDA NASS reported in its weekly Crop Progress report on Monday. However, widespread precipitation forecast this week could slow some of that progress.

CORN

-- Harvest progress: 61% of corn was harvested as of Sunday, Oct. 23, up 16 percentage points from the previous week. This year's harvest progress is now 3 percentage points behind last year's 64% but 9 percentage point ahead of the five-year average of 52%.

-- Crop development: Corn mature was estimated at 97%, even with the five-year average.

SOYBEANS

-- Harvest progress: 80% of the crop was harvested as of Sunday, up 17 percentage points from the previous week. That is now 9 percentage points ahead of last year's 71% and 13 percentage points ahead of the five-year average of 67%.

WINTER WHEAT

-- Planting progress: 79% of winter wheat was planted as of Sunday, even with last year and 1 percentage point ahead of the average pace of 78%.

-- Crop development: 49% of winter wheat was emerged as of Sunday, 7 percentage points behind the five-year average of 56%.

WEEK AHEAD IN WEATHER

"Last week might have been a good week to get out into the fields if you didn't mind the cold, but this week is going to be much more difficult," said DTN Ag Meteorologist John Baranick. "An early week system has already brought lots of wind to the Plains and Upper Midwest. Dust storms in Colorado and Kansas along with some wildfires on Sunday likely have led to poorer conditions for emerging wheat. Rain has skipped over a large portion of hard red winter wheat territory as well, leaving it dry.

"However, the storm system is picking up some tropical moisture and has really increased its rainfall coverage and intensity over the southeastern Plains into the southwestern Midwest here on Monday. That system will slowly work east through the country through Wednesday with more bouts of rain from Texas up through the Midwest. The rainfall will hit some winter wheat territory in the Plains and most of it in the Midwest. Another storm will leave the Rockies and get out into the Plains on Thursday. The focus for showers there will be from Kansas and Colorado down to Texas for late this week and points eastward into the Delta and Southeast this weekend.

"A spot that did particularly well was the Pacific Northwest. It may have been a bit chilly, but widespread rains from the system this weekend likely improved conditions for wheat, even if it didn't necessarily show up in the conditions. A few more rounds of showers will move through this week, which will help to ease the dryness and drought ongoing in that region."







Report: Beef industry growth to rest more and more on exports

New insight highlights value of international beef trade on U.S. beef sector.

A new trade report analyzing the effects of beef imports and exports highlights the strong economic value of the U.S. beef industry’s participation in a global marketplace.

The report, “Assessing Economic Impact That Would Follow Loss of U.S. Beef Exports and Imports,” was authored by Derrell Peel, Oklahoma State University Extension livestock marketing specialist, and Glynn Tonsor, professor of agricultural economics at Kansas State University.

Commissioned by the Kansas Beef Council, Oklahoma Beef Council and Texas Beef Council, Peel and Tonsor spent six months preparing the 80-page document that was recently released.

Peel said he has fielded questions his entire career concerning beef imports, and many people are not aware of the value of exports, believing more than enough beef is grown in the U.S. to sustain its population. His findings prove otherwise.

“One of the main points that came out of this report is the recognition that while producers produce cattle as a single product, what they sell becomes thousands of different products,” he said. “The marketplace plays a big role in sorting out where the best value is for all those products that ultimately contribute to the overall value of cattle.”

When opportunities are available, the U.S. exports specific products to certain markets, and the vast range of different beef commodities helps the industry grow.

“Beef exports and imports combine to provide opportunities to increase value to the U.S. industry by exporting products that have more value in foreign markets and importing products that can be sourced more economically in international markets,” the report highlighted.

Peel explained that the U.S. is “a relatively mature market” in terms of beef demand, adding that there is a lot more potential in the global market. “Potential growth in the industry is going to rest more and more with the trade sector, and we highlight the fact that the marketplace has grown a lot in the last 20 to 30 years,” he said.

Peel and Tonsor’s research shows that a 10% reduction in beef imports and exports over a 10-year period would result in a $20 billion impact to cattle producers. A full 100% loss scenario would have a catastrophic impact, the report suggested, with an estimated loss of $129 billion for feeder cattle sellers and $68 billion for fed cattle sellers.

“Bottom line, there would be huge economic losses if we did not trade, and the beef industry would be much smaller,” Peel said.

Ground beef driver of imports

Peel and Tonsor analyzed the sources and composition of beef imports to explore the role beef imports play in the U.S. beef industry. What they found was that ground beef is the main driver of beef imports due to the tremendous hamburger demand in the U.S. 

On average, ground beef represented approximately 31% of total beef production over the five-year period of 2016-2020. Of the 8.1 billion pounds of ground beef, roughly 24% of this is imported beef.  

“Without the imported beef, there simply would not be enough lean beef to utilize all the fed trimmings produced in the U.S. for ground beef,” the report noted, adding that this would lead to one of several outcomes.

One possibility, Tonsor and Peel said, would be to simply reduce the amount of ground beef produced, with excess fed trimmings rendered in the tallow market at much lower values. “This would result in sharply higher ground beef prices and a significant reduction in ground beef volumes.”

A second possibility would be to simply grind higher percentages of fed carcasses for lean to balance with fed trimmings. While enough round products might be available to meet the ground beef lean requirements, Peel and Tonsor said this would cause enormous upheaval in other beef markets that currently utilize those products. 

“Round and other beef cuts are not ground today because they have higher value in other uses. Using these products for grinding would lower the overall value to the industry.”

Another scenario would be to raise some proportion of steers and heifers as nonfed beef (think Australian range beef) to produce more lean meat comparable to cow and bull meat. These animals also have more value in the current system to be produced as feedlot finished animals, they explained.

Overall, however, beef imports allow the U.S. beef industry to expand total beef production and add value by utilizing fed trim most efficiently, Peel and Tonsor stated. “Beef imports are simply a part of vastly complex set of markets that make up the beef industry.”



Bureau of Reclamation, Pacific Northwest Region - Storage Reservoirs in the Upper Snake River (10/24)



Average daily streamflows indicated in cubic feet per second.
Reservoir levels current as of midnight on date indicated.

Upper Snake River system is at 13 % of capacity.
(Jackson Lake,Palisades, Grassy Lake,Island Park,Ririe,American Falls,LakeWalcott)
  
Total space available:3508277 AF
Total storage capacity:4045695 AF




Friday, October 21, 2022

Friday Market Watch

 LIVESTOCK:

It was an exceptional day for the livestock complex as the markets were able to close higher and Friday's Cattle on Feed report ended up being the icing on the cake for an outstanding week. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $5.85 with a weighted average of $88.89 on 3,588 head.

From Friday to Friday, the livestock futures scored the following changes: October live cattle up $3.53, December live cattle up $4.65; October feeder cattle up $1.47, November feeder cattle up $3.57; December lean hogs up $6.88, February lean hogs up $7.10; December corn down $0.05, March corn down $0.06.

Friday's slaughter is estimated at 122,000 head, 8,000 head more than a week ago and year ago. Saturday's slaughter is projected to be 42,000 head. This week's slaughter is estimated at 673,000 head, 13,000 head more than a week ago and 11,000 head more than a year ago.

Boxed beef prices closed higher: choice up $0.09 ($253.71) and select up $2.28 ($224.36) with a movement of 94 loads (48.55 loads of choice, 19.28 loads of select, 13.30 loads of trim and 13.19 loads of ground beef). Throughout the week choice cuts averaged $251.93 (up $5.62 from last week) and select cuts averaged $221.90 (up $7.16 from last week) with a movement of 675 loads of cuts, grinds and trim.

More: Friday Closing Livestock Market Update - December Live Cattle Closed at New Contract High


GRAINS:

December corn closed up 1/4 cents and July corn was down 1 cents. January soybeans closed up 4 1/2 cents and July soybeans were up 5 1/4 cents. December KC wheat closed down 1 1/2 cents, December Chicago wheat was up 1 1/2 cents and December Minneapolis wheat was down 1 cent. 

For the week:

December corn closed down 5 1/2 cents and July corn was down 7 1/4 cents. January soybeans ended up 11 3/4 cents and July soybeans were up 9 1/2 cents. December KC wheat closed down 4 cents, December Chicago wheat was down 9 cents and December Minneapolis wheat was up 7 1/4 cents.


DAIRY:

Milk futures made a valiant attempt to move higher earlier this week fueled by the strength of barrel prices. However, the rally was short-lived as has been the pattern for the past few months. If the market cannot break out of this pattern during this time of year, the price outlook for the rest of the year and into next year does not look very promising. Not only will milk prices have a difficult time trending higher, but higher food prices will also have an impact. Fluid milk demand has been stable with cheese and butter demand somewhat variable. The real concern will be once the greater part of holiday buying is finished; regular demand may not be supportive to the market. Cow numbers declined 2,000 head in September from the previous month according to the milk production report. The September Livestock Slaughter report showed dairy cattle slaughter down 4,000 head from September 2021 at 260,500 head and 5,600 head below August. Farms may have culled out much of what they wanted to prior to this time of year and/or they are holding onto cows due to increased feed supplies and relatively good milk prices.

More: Friday Closing Dairy Market Update - Cattle Slaughter Declines in September


FORAGE: This Week's Hay Markets Here (Forage Fodder Blog)


OUTSIDE MARKETS:

The December U.S. Dollar Index is trading down 0.60 at 112.22. The Dow Jones Industrial Average is up 590.06 points at 30,923.65. December gold is up $20.30 at $1,657.10, December silver is up $0.48 at $19.17 and December copper is up $0.0635. December crude oil is up $0.37 at $84.88, December ultra-low sulfur diesel is up $0.0899, December RBOB gasoline is up $0.0070 and December natural gas is down $0.383.





Rural economy struggles as recession draws near

 Bank CEOs share concerns regarding the current state of the ag economy


Each month, Creighton University publishes the Rural Mainstreet Index based on a survey of bank CEOs in rural areas of 10 states dependent on agriculture and energy. The October report shows the index dropped below growth neutral for the fifth consecutive month.

“The Rural Mainstreet economy is now experiencing a downturn in economic activity,” says Ernie Gross, Chair in Regional Economics at Creighton University.

“Almost one in four bankers, or 23.1%, reported that the economy was already in a recession,” Gross adds. The rest of the bankers responding to the survey expect a recession to begin in 2023.

The region’s farmland price index for October declined to 58.0 from September’s 61.1 but moved above growth neutral for the 25th straight month.

Earlier this month, 55.6 acres of rich farmland ground in Plymouth County, Iowa sold for over $1.4 million, or $26,250 per acre. The sale set a new record for farmland sales in Iowa – and the parcel of land didn’t even include wind turbines or other revenue-generating assets.

USDA’s Crop Progress report released Oct. 17 marks harvest progress at 45% and 63% respectively for corn and soybeans, and farmers are getting a better idea of their 2022 crop yields.

Jim Eckert, president of Anchor State Bank in Anchor, Ill., reports, “Corn yields are about the same as 2021. Early reports indicate soybean yields are a little lower than 2021.”

Farm equity is on the rise for 2022. On average, bankers forecast a 3.4% boost in farm equity for U.S. farmers compared to 2021 levels, just under USDA’s projection of 4.2%.  

Farm equipment sales dropped for the second time in the past three months. The index of equipment sales slumped below growth neutral to 47.8 after staying above growth neutral for the majority of the past two years.

The Association of Equipment Manufacturers reports a 12.8% decrease in retail farm tractor sales in September 2022 compared to the same time last year. Still, combine sales are up 6.6%. 

Overall, the slowing economy, strong energy prices, higher borrowing costs and elevated ag input costs weigh heavy on rural America. The business confidence index slid almost 10 points in October to a reading of 30.8 “This is the lowest reading for the confidence index since May 2020,” said Goss.



Thursday, October 20, 2022

This Week's Drought Summary (10/20)

Much of the western half of the lower 48 states observed above-normal average temperatures this week. The Intermountain West and Pacific Northwest experienced the largest positive temperature anomalies, where widespread temperatures averaged 5°F to 10°F above-normal, with a few pockets exceeding 10°F above-normal for the week as whole. In addition to the above-normal temperatures, precipitation was also lacking for most areas from the Central and Northern Plains westward to the Pacific Coast, warranting drought deterioration. Parts of the Four Corners and Desert Southwest were the exception to this, as an area of low pressure meandered across the Southwest before being picked up by a frontal boundary dropping southward across the central U.S. This resulted in improvements to long-term drought conditions across parts of the Four Corners, with targeted improvements in the Southern Plains. Across the eastern half of the lower 48, frontal boundaries associated with a couple of strong low pressure systems in the Great Lakes brought heavy precipitation and cooler than normal temperatures to portions of the Great Lakes, Northeast, and Southeast. Therefore, a widespread mix of improvements and deterioration was warranted in many locations where the heaviest precipitation did and did not fall, respectively.



Northeast

A couple of low pressure systems with trailing frontal boundaries resulted in another round of improvements to long-term drought conditions across New England and the Mid-Atlantic. Widespread 1 to 2 inch rainfall surpluses were observed across New England, with more than 4 inch surpluses in central and western Maine. Given the recent beneficial rainfall in many of these same areas, widespread 1-category improvements to the drought depiction were warranted. Some areas in western New York and south-central Pennsylvania have seen deficits creep up to between 1 and 3 inches over the past 30 days. So these areas will need to be watched in the coming weeks.

Southeast

Large precipitation deficits have accumulated in many areas of the Southeast over the last 30 days, particularly across the southern Appalachians and much of the Gulf Coast states. Fortunately, beneficial heavy rainfall was observed across many areas in the Deep South and parts of the Tennessee Valley. 1-category improvements were warranted where 7-day rainfall totals in excess of 2 inches were able to eliminate 30-day deficits. Unfortunately, 30-day deficits of 1 to 2 inches still remain, even in areas receiving some of the heavier rainfall, warranting a status quo depiction in locations adjacent to areas showing improvement this week. Elsewhere across the Gulf Coast states, 30-day deficits continued to increase, warranting another round of deterioration this week. Parts of the Carolinas and Virginia continue to benefit from Hurricane Ian’s remnants from late September into early October. However, some pockets that didn’t receive the heavier rainfall amounts earlier this month, coupled with antecedent dryness leading up to Ian’s second landfall in South Carolina, resulted in targeted areas of D0 introduction across parts of the Coastal Plain and Piedmont of the Carolinas.

South

Frontal boundaries associated with a couple of strong low pressure systems over the Great Lakes brought heavy precipitation to parts of the Red River Valley of the South, the Ozarks, and the Tennessee Valley this week. Farther westward toward the Rio Grande Valley, a cutoff low pressure system became entrained into the second frontal boundary dropping southward across the central U.S. bringing heavy rainfall to parts of western and southern Texas. Improvements were generally warranted in areas receiving the heaviest rainfall (greater than 1 inch positive 7-day anomalies). However, antecedent 30-day dryness resulted in status quo depictions for several other locations receiving near to above-normal rainfall, as surface soil moisture has rapidly declined due to widespread 3 to 5 inch 30-day precipitation deficits and predominantly above-normal temperatures. This dryness also extends to 60 to 90 days for several areas across the Southern Plains and along the Gulf Coast, warranting 1-category deteriorations in the drought depiction for many locations not receiving rainfall this week.

Midwest

Moderate rainfall over several days leading up to Tuesday (October 18), associated with a series of storm systems over the Great Lakes, resulted in targeted improvements to portions of western and northern Michigan and eastern Ohio this week. However, most areas, particularly along the Ohio and Middle and Upper Mississippi Valleys, experienced another round of degradation this week. Short-term (30 to 60-day) SPIs are widespread D1-equivalent (moderate drought) or worse across areas seeing degradation. Additionally, topsoil moisture continues to dry out across portions of the Ohio Valley and the Corn Belt. Deeper soil moisture remains very low also across much of the Mississippi Valley, with several soil moisture indicators (CPC Leaky Bucket, NASA SPoRT, and NASA GRACE) exhibiting large coverage of D1-equivalent (moderate drought) or worse soil moisture conditions along and west of the Mississippi River.

High Plains

Despite the High Plains Region observing near to below-normal average temperatures this week, a combination of antecedent dryness, below-normal precipitation, and high winds resulted predominantly in continued degradation region-wide. The only exception was the southwestern corner of Colorado, where short and long-term drought indicators have shown continued improvement following a robust Southwest Monsoon season and a couple of additional episodes of precipitation, associated with cutoff areas of low pressure in the Southwest in recent weeks.



West

An upper-level low pressure system, coupled with a frontal boundary dropping southward across the central U.S. resulted in a good soaking this week for many areas from southeastern California eastward to the Rio Grande Valley. Given the lingering precipitation associated with this area of low pressure following the climatological end to a very robust Southwest Monsoon season in late September, this was another much-needed round of precipitation to further fuel ongoing improvements to long-term drought indicators, such as groundwater and 12 to 24-month SPIs. Soil moisture is in excellent shape as well coming out of the monsoon season across Arizona and New Mexico. Farther northward in the Western Region, degradation was the main story, as below-normal precipitation and above-normal average temperatures (in some cases record high temperatures for this time of year) were observed. High winds and above-normal temperatures resulted in targeted degradations across northern portions of the Intermountain West and the High Plains. In the Pacific Northwest, degradations were also warranted, with the addition of D2 (severe drought) across the parts of the Coastal Ranges and Northern Cascades in Washington, where 28-day average stream flows have dropped into the bottom 2 percent of the historical distribution. In addition, soil moisture ranks in the bottom 5 percent climatologically, vegetation indices are indicating widespread drought stress, groundwater levels are falling, and SPIs for all periods out to 120 days are D4-equivalent (exceptional drought). The Pacific Northwest is entering into a climatologically wetter time of year, so precipitation will need to come soon to halt further deterioration.



Caribbean

Despite some localized areas receiving below-normal precipitation over the last 30 days, Puerto Rico is still in good shape from a drought perspective due in part to the passage of Hurricane Fiona back in mid-September. Therefore, a status quo, drought-free depiction was again warranted this week throughout the entire island. However, USGS 7-day average stream flows have fallen a bit across eastern parts of the island and will need to be watched more closely in the coming weeks.

St. Thomas continued to be drought free this week. The Cyril E King Airport had 0.54 inch of rain this week, resulting in a month-to-date rainfall total of 1.01 inch or 35.1% of normal October rainfall. Year-to-date rainfall was 90.8% of normal at the airport. Most CoCoRaHS stations had less than half an inch of rain for the week, with the exception of the Anna's retreat (VI-ST-1) and Charlotte Amalie West 4.2 WNW (VI-ST-5) station which had 1.32 and 2.36 inches of rain, respectively. Month-to-date totals for some of these CoCoRaHS locations ranged between 1.51 to 4.15 inches. By the end of September, groundwater levels had improved, but since early October, groundwater levels are slowly decreasing. SPI value at the 1 month period was indicative of moderate drought, while the SPI values at 3, 6, 9, and 12 were indicative of drought free conditions.

St. John also continued to be drought free this week. Windswept Beach station had the most rain across the USVI with a total of 0.87 inch. The month-to-date rainfall total at the Windswept Beach was 2.10 inches or 64.5% of normal. The year-to-date total was 90.8% of normal. SPI values were indicative of drought free conditions at the 1, 3, 6, and 9 months, while the 12-month period was indicative of moderate drought.

St. Croix continued in long-term abnormally dry conditions since it had only 0.35 inch of rain this week at the Henry Rohlsen Airport. This was 1.43 inches or 56.3% of normal for the month-to-date. The year-to-date rainfall total was 1109.6% of normal. CoCoRaHS stations ranged between 0.18 to 0.71 inch of rain for the week. SPI values were indicative of drought free conditions across all three levels. Groundwater has improved some and is at similar levels last seen in Mar 2022.

Pacific

Much of Alaska has received near to above-normal precipitation in the weeks and months leading up to this week, warranting a status quo, drought-free depiction again this week, as drought indicators generally remain in good shape.

In Hawaii, a low pressure system brought some enhanced rainfall to portions of the islands this week, adding to above-normal rainfall amounts received earlier in the month. Therefore, some targeted improvements were made to portions of Oahu and the Big Island. Unfortunately, degradation was also warranted this week for parts of Kauai and the southern tip of the Big Island, where stream flows and poor pasture conditions continue to be a concern, respectively.

Drought was not a concern across Palau since this was a very wet week with 4.10 inches at the Palau airport.

The Mariana Islands continued to be drought free. All three locations had over 3 inches of rain. The Rota Airport station had the most rainfall with a weekly total of 8.16 inches, this is a little over twice the monthly threshold to meet most water needs.

This was a wet week across much of the Federated States of Micronesia, with most locations receiving over 4 inches of rain. Yap had the most rainfall at 6.90 inches. Yap, Chuuk, Pohnpei, Kosrae, Nukuoro, Pingelap, and Woleai continued to be drought free.

Ulithi's drought classification was changed to drought free this week since its rainfall total was 5.18 inches and weekly rainfall totals have been over 2 inches since September 27. The October month-to-date rainfall total is 9.27 inches, surpassing the monthly threshold of 8 inches to meet most water needs.

Similarly, Lukunor's drought classification was also changed to drought free conditions since 4.36 inches of rain fell this week and over 2 inches of rain fell the previous two weeks, resulting in a month-to-date rainfall total of 8.86 inches.

Kapingamarangi continued to be in short-term and long-term severe drought since only 0.71 inch of rain fell and its month-to-date rainfall total is less than 2 inches.

Across the Marshall Islands, Alinglaplap, Majuro, Jaluit, and Mili had over 2-inches of rain this week, securing another week of drought free conditions. Kwajalein had 1.85 inches of rain for the week, resulting in a month-to-date rainfall total of 8.20 inches. Drought free conditions persisted across Kwajalein.

Following a week of no rain, Wotje had only 0.65 inch of rain for the week. Two consecutive weeks of little to no precipitation resulted in a month-to-date rainfall total of only 2.40 inches. Drought free conditions continued this week since drought impacts were not provided; however, if dry conditions persist next week, abnormally dry conditions might be introduced.

Short-term moderate drought continued across American Samoa this week since rainfall was 0.53 inch at Siufaga Ridge and 0.92 inch at Pago Pago. Both locations had less than 3 inches of rain for the month-to-date.

Looking Ahead

During the next five days (October 20-24), the storm system over the Great Lakes is forecast to move northeastward into Canada, but bring some additional light precipitation to parts of the northern and eastern Great Lakes. Surface high pressure is expected to dominate much of the eastern lower 48. However, a storm system is predicted to spin up off the coast of the Carolinas bringing the potential for rainfall along portions of the Eastern Seaboard. In the West, an active storm pattern is expected, with the potential for upwards of 3 inches of precipitation for the higher elevations of the Pacific Northwest and upwards of 2 inches across portions of the Intermountain West. The first of two systems is expected to intensify over the central U.S. leading up to October 24, bringing increased precipitation chances to much of the Great Plains and the Mississippi Valley. Below-normal temperatures are expected to shift eastward from the West Coast to the Great Plains, associated with the storm system entering the West during the weekend. Ahead of this system, southerly flow is expected to keep temperatures near and above-normal, with the largest anomalies shifting eastward from the Great Plains to the eastern U.S.

The Climate Prediction Center’s 6-10 day outlook (valid October 25-29), predicts increased chances of below-normal temperatures for southeastern Alaska and the western half of the contiguous U.S. (CONUS). Southerly flow and above-normal temperatures are favored from the Mississippi Valley to the East Coast. An active storm track is forecast across the Northeast Pacific, leading to above-normal precipitation odds across much of Alaska and extending into the Pacific Northwest. Low pressure is forecast to develop east of the Rockies bringing the potential for above-normal precipitation to much of the southeastern CONUS. Conversely, in the Southwest, below-normal precipitation is favored as the storm track is expected to remain farther northward.




This Week's Drought Summary (11/21)

The trend of the past few weeks toward generally increased precipitation across the Contiguous 48 states continued this week, with several s...