Last fall, when I said the focus would be on weather in 2013, I couldn't have come close to saying South America would have almost ideal growing conditions and the U.S. would start out completely opposite of 2012. All sorts of reasons for the turn a about from climate change, cycle changes and Mother Nature replenishing drought ravished areas are batted around. But when it boils down to it, the South American crops grew like never before and besides delayed planting, the US crops with all the moisture and now warming temperatures appear to be proving rain makes grain.
Of course, there are areas that have too much water but from pictures and reports I received in the last week where grains were planted by May 20 give or take a few days, most producers tell me they are more than satisfied with the way growth is progressing. After last year, I am glad to hear it. I have to admit, there are plenty of producers with the attitude that the "glass is half empty" but as I learned long ago, until the crop is combined, there will always be those farmers that for one reason or another won't accept a large crop. If their crops are doing well, they know a cousin a few mils from their farm that is having problems or a trucker reported seeing problems two states away from the home base.
But will it matter all that much what the US grows.
Brazil's soybean crop is taking market share from the U.S. Argentina and China have agreed to take three varieties of genetically modified grains which in my opinion shows the desire of China to use all available sources when they buy grain.
Russia is expecting to export a whopping 18 percent more wheat than a year ago. This spring, when old crop supplies in Russia began to run low, instead of turning away business they pulled what from reserves. They lost market share in 2010 when they quit exporting wheat and corn due to drought conditions and have worked to regain it courting Egypt in 2011 and 2012 to the point U.S. lost one of its strongest buyers. In 2012 Japan went shopping in Ukraine and Russia and with exchanges rates favoring more buying, Japan will very likely buy Russian and former Soviet Union countries grains in 2013. Like Argentina, in 2012 China set up trade agreements with Ukraine loaning billions to improve infra-structure to store and move grain.
Often, I feel U.S. traders concentrate too much on exports. Yes, I can be put into the camp but one of mybiggest concerns now through the end of 2013 and well into 2014 will be the large drop in fed cattle numbers. The calf crop in 2012 was last estimated to be down three percent from 2011. It is the smallest calf crop since 1949.
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