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                                                                                                                                                          Vol. 11, No. 51 / March 15, 2013

           At the recent USDA Agricultural Outlook Forum, USDA Agri-                                    STATEWIDE PRECIPITATION ANOMALIES, FEBRUARY 2013
cultural Economist Pet Riley listed his top factors affecting this year’s
crop price outlook. After listing them all with equal emphasis on slide,
he presented them on another slide depicting importance. That slide
showed “WEATHER” in bold and a typeface several times larger
than all of the other factors. In fact, the audience could hardly read
the other items on the slide as “WEATHER” dominated.
           We recall no time in our careers in which weather has been so
important to both grain and livestock producers as it is this year.
Weather was no doubt a focus in the springs of 1984 and 1989 follow-
ing significant, drought-driven shortfalls in crops the previous years. But
those years both had substantial grain stocks in place that significantly
blunted the impacts of the respective droughts. This year, as you are
sorely aware, is quite different. So weather will remain a focus as we
go into planting season and as livestock producers — and especially
cow-calf operations—contemplate appropriate business plans for this
year and next.
                                                                                                                                                Source: NOAA Climate-at-a-Glance
           And recent developments are indeed encouraging on the
weather front. The top figure at right shows precipitation anomalies by                                         U.S.AVERAGE TEMPERATURE, ANNUAL
state for the month of February. As “anomalies”, these figures repre-                                     56
sent the departure of statewide average rainfall from its long-term norm.
It is clear that the southeastern U.S. has caught up significantly in terms                               55
of moisture. Georgia and Alabama both received over 9 inches of pre-
cipitation in February while Mississippi got over 7 inches and Louisiana                                   54
and South Carolina received over 6. Florida remains very dry but got                                     t
                                                                                                         i
                                                                                                         e
                                                                                                         h
greater-than-normal rainfall in February as well.                                                        n
                                                                                                         e
                                                                                                         r53
                                                                                                         a
           Rainfall conditions in these states are most important, of                                    F
                                                                                                         s
course, for the cotton and cow-calf sectors but will be more important                                   e
                                                                                                         e
                                                                                                         r52
                                                                                                         g
than normal this year for soybeans and corn. While not at the record                                     e
                                                                                                         D
ratios of last summer, prices of those two commodities still compare                                       51
very well to cotton, a fact that could drive some acreage shifts this
spring. Perhaps more important will be the timing of harvest for these                                    50
southern acres as many of them may well be mature and in the bins
before the end of the current crop year. With feed grain and soybean                                      49
supplies squeaky tight this summer, any early-harvested amounts could                                            04 09 14 19 24 29 34 39 44 49 54 59 64 69 74 79 84 89 94 99 04 09
                                                                                                                                               Year
be critical for feed availability and late-season prices.
           The positive anomalies for the Cornbelt are not large but they
are indeed positive — a fact that we must appreciate. It is important to                            us. And regardless of why it may be occurring, the upward trend of
note that a positive anomaly here still does not imply that much rain/                              temperatures since 1980 is quite obvious. That annual temperature, of
snow actually fell in these areas as winter months are always dry. The                              course, was influenced by last year’s mild winter as well as record or
+.93-inch anomaly for Illinois was still only 2.8 inches of moisture.                               near-record high temperatures last summer. July’s national average
Iowa’s +.27 inches represents only 1.3 inches of total precipitation. But                           temp of 76.9° F broke the 1934 record high of 76.2° F.
positive is positive and the National Weather Services drought monitor                                        The good news is that this year has started off better in terms
maps (available at www.droughtmonitor.unl.edu) have shown steady                                    of temperature. Last year’s average for January and February was
improvement. Much more moisture is still needed in the Northern                                     nearly 37° and just fractionally lower than the record high of 1998 and
Plains — a factor of particular importance to cow-calf operations.                                  number two 2006. Will a lower annual average driven by a more normal
           A factor to watch, however, is temperatures. As can be                                   (33.3°F so far) winter mean fewer or lower high temperatures this sum-
seen in the chart above, the average temperature for the United States                              mer? There is no guarantee, of course, but we’ll “shoot at everything
was far and away record-high last year at 53.4° Fahrenheit or 13° Celsi-                            that rises and claim everything that falls” at this point!

                       The Daily Livestock Report is made possible with support from readers like you. If you enjoy this report, find if valuable
                      and would like to sustain it going forward, consider becoming a contributor. Just go to www.DailyLivestockReport.com to
                             contribute by credit card or send your check to The Daily Livestock Report, P.O. Box 2, Adel, IA 50003.


 The Daily Livestock Report is published by Steve Meyer & Len Steiner, Inc., Adel, IA and Merrimack, NH. To subscribe, support or unsubscribe visit www.dailylivestockreport.com. Copyright © 2013
 Steve Meyer and Len Steiner, Inc. All rights reserved.
 The Daily Livestock Report is not owned, controlled, endorsed or sold by CME Group Inc. or its affiliates and CME Group Inc. and its affiliates disclaim any and all responsibility for the informa on
 contained herein. CME Group®, CME® and the Globe logo are trademarks of Chicago Mercan le Exchange, Inc.
 Disclaimer: The Daily Livestock Report is intended solely for informa on purposes and is not to be construed, under any circumstances, by implica on or otherwise, as an offer to sell or a solicita-
   on to buy or trade any commodi es or securi es whatsoever. Informa on is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or
 possible where projec ons of future condi ons are a empted. Futures trading is not suitable for all investors, and involves the risk of loss. Past results are no indica on of future performance.
 Futures are a leveraged investment, and because only a percentage of a contract’s value is require to trade, it is possible to lose more than the amount of money ini ally deposited for a futures
 posi on. Therefore, traders should only use funds that they can afford to lose without affec ng their lifestyle. And only a por on of those funds should be devoted to any one trade because a
 trader cannot expect to profit on every trade.

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Daily livestock report mar 15 2013

  • 1. Sponsored by Vol. 11, No. 51 / March 15, 2013 At the recent USDA Agricultural Outlook Forum, USDA Agri- STATEWIDE PRECIPITATION ANOMALIES, FEBRUARY 2013 cultural Economist Pet Riley listed his top factors affecting this year’s crop price outlook. After listing them all with equal emphasis on slide, he presented them on another slide depicting importance. That slide showed “WEATHER” in bold and a typeface several times larger than all of the other factors. In fact, the audience could hardly read the other items on the slide as “WEATHER” dominated. We recall no time in our careers in which weather has been so important to both grain and livestock producers as it is this year. Weather was no doubt a focus in the springs of 1984 and 1989 follow- ing significant, drought-driven shortfalls in crops the previous years. But those years both had substantial grain stocks in place that significantly blunted the impacts of the respective droughts. This year, as you are sorely aware, is quite different. So weather will remain a focus as we go into planting season and as livestock producers — and especially cow-calf operations—contemplate appropriate business plans for this year and next. Source: NOAA Climate-at-a-Glance And recent developments are indeed encouraging on the weather front. The top figure at right shows precipitation anomalies by U.S.AVERAGE TEMPERATURE, ANNUAL state for the month of February. As “anomalies”, these figures repre- 56 sent the departure of statewide average rainfall from its long-term norm. It is clear that the southeastern U.S. has caught up significantly in terms 55 of moisture. Georgia and Alabama both received over 9 inches of pre- cipitation in February while Mississippi got over 7 inches and Louisiana 54 and South Carolina received over 6. Florida remains very dry but got t i e h greater-than-normal rainfall in February as well. n e r53 a Rainfall conditions in these states are most important, of F s course, for the cotton and cow-calf sectors but will be more important e e r52 g than normal this year for soybeans and corn. While not at the record e D ratios of last summer, prices of those two commodities still compare 51 very well to cotton, a fact that could drive some acreage shifts this spring. Perhaps more important will be the timing of harvest for these 50 southern acres as many of them may well be mature and in the bins before the end of the current crop year. With feed grain and soybean 49 supplies squeaky tight this summer, any early-harvested amounts could 04 09 14 19 24 29 34 39 44 49 54 59 64 69 74 79 84 89 94 99 04 09 Year be critical for feed availability and late-season prices. The positive anomalies for the Cornbelt are not large but they are indeed positive — a fact that we must appreciate. It is important to us. And regardless of why it may be occurring, the upward trend of note that a positive anomaly here still does not imply that much rain/ temperatures since 1980 is quite obvious. That annual temperature, of snow actually fell in these areas as winter months are always dry. The course, was influenced by last year’s mild winter as well as record or +.93-inch anomaly for Illinois was still only 2.8 inches of moisture. near-record high temperatures last summer. July’s national average Iowa’s +.27 inches represents only 1.3 inches of total precipitation. But temp of 76.9° F broke the 1934 record high of 76.2° F. positive is positive and the National Weather Services drought monitor The good news is that this year has started off better in terms maps (available at www.droughtmonitor.unl.edu) have shown steady of temperature. Last year’s average for January and February was improvement. Much more moisture is still needed in the Northern nearly 37° and just fractionally lower than the record high of 1998 and Plains — a factor of particular importance to cow-calf operations. number two 2006. Will a lower annual average driven by a more normal A factor to watch, however, is temperatures. As can be (33.3°F so far) winter mean fewer or lower high temperatures this sum- seen in the chart above, the average temperature for the United States mer? There is no guarantee, of course, but we’ll “shoot at everything was far and away record-high last year at 53.4° Fahrenheit or 13° Celsi- that rises and claim everything that falls” at this point! The Daily Livestock Report is made possible with support from readers like you. If you enjoy this report, find if valuable and would like to sustain it going forward, consider becoming a contributor. Just go to www.DailyLivestockReport.com to contribute by credit card or send your check to The Daily Livestock Report, P.O. Box 2, Adel, IA 50003. The Daily Livestock Report is published by Steve Meyer & Len Steiner, Inc., Adel, IA and Merrimack, NH. To subscribe, support or unsubscribe visit www.dailylivestockreport.com. Copyright © 2013 Steve Meyer and Len Steiner, Inc. All rights reserved. The Daily Livestock Report is not owned, controlled, endorsed or sold by CME Group Inc. or its affiliates and CME Group Inc. and its affiliates disclaim any and all responsibility for the informa on contained herein. CME Group®, CME® and the Globe logo are trademarks of Chicago Mercan le Exchange, Inc. Disclaimer: The Daily Livestock Report is intended solely for informa on purposes and is not to be construed, under any circumstances, by implica on or otherwise, as an offer to sell or a solicita- on to buy or trade any commodi es or securi es whatsoever. Informa on is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projec ons of future condi ons are a empted. Futures trading is not suitable for all investors, and involves the risk of loss. Past results are no indica on of future performance. Futures are a leveraged investment, and because only a percentage of a contract’s value is require to trade, it is possible to lose more than the amount of money ini ally deposited for a futures posi on. Therefore, traders should only use funds that they can afford to lose without affec ng their lifestyle. And only a por on of those funds should be devoted to any one trade because a trader cannot expect to profit on every trade.