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Friday, October 09, 2009

Cornbelt Update—UPDATED WITH OCTOBER CROP REPORT



 

Cornbelt Update is a weekly summary of news from Extension, government, and other attributable sources, focused on marketing, farm management, and other issues that are of interest to Midwestern farm owners and operators.

USDA pushed up its forecast for 2009 corn production to 13.018 bil. bu., slightly above the 12.955 bil. forecast in Sept. and within the range expected by the market, but well above the 12.986 bil. bu. average of trade guesses. The October Crop report also adjusted acreage expectations to 79.294 mil. acres, down slightly from Sept. The corn crop will be 8% higher than 2008, helped by a more than 10 bushel per acre jump in the national average yield. USDA kept yield forecast steady or raised them across the Cornbelt because of favorable Sept. weather.

USDA also pushed up its forecast for 2009 soybean production to 3.250 bil. bu., up slightly from the 3.245 bil. forecast in September. The projection was within the range the market was expecting. USDA also added 0.1 bu. to the average yield and reset it to 42.4 bu. per acre and cut the expected harvested area slightly from the September estimate.

USDA's Supply and Demand Report for corn made some minor adjustments in use. Feed use was raised 50 mil. bu. to 5.4 bil. Exports were lowered 50 mil. bu. to 2.150 bil. Ending stocks were raised to 1.672 bil. but the price range of $3.05 to $3.65 was retained.

USDA's Supply and Demand Report for beans retained crush estimates at 1.690 bil. bu., but raised export estimates by 25 mil. bu. to 1.305 bil. The carryout was raised to 230 mil. bu., and the season average price range was dropped ten cents to $8 to $10 per bu.

Ahead of the Monday freeze, crop forecasters said the corn is immature and vulnerable for 60% of ND, 50% of WI, 40% of MI, 40% of MN, 35% of IL, 30% of IN, 30% of OH, 20% of SD, 20% of NE, 10% of IA, and 10% of MO. Another forecaster with similar estimates computed the damage would affect more than 232 mil. bu. of immature corn.

The combination of freezing temperature halting corn maturity and the resulting light test weights leads MI St. marketing specialist Jim Hilker to doubt the accuracy of either the Oct. or Nov. USDA crop reports. He says, “This is not a criticism of USDA, but rather the fact of a very late maturing corn crop.” He’s waiting for the final report in Jan.

Hilker says the market is willing to pay for on-farm corn storage with the monthly spread of 4¢+ per month. However that is not enough to cover commercial storage plus lost interest. His advice is, “Those who need off-farm storage and are pretty sure the market is going up should consider basis contracts, sell cash-buy futures, sell cash-buy call options, a minimum price contract, or sell cash and an appropriate call spread.”

Hilker’s probability for Dec corn: “There is a 10% chance that the price will be higher than $4.03 and a 10% chance that the price will be less than or equal to $2.89. This indicates an 80% probability that the price will fall between these two prices. There is a 50% chance the price will be less than or equal to (or greater than) $3.41.”

Hilker’s probability for Nov beans: “There is a 10% chance that the price will be higher than $10.20 and a 10% chance that the price will be less than or equal to $8.38. This indicates an 80% probability that the price will fall between these two prices. There is a 50% chance the price will be less than or equal to (or greater than) $9.24.”

US corn exports will increase, thanks to smaller corn crops in Canada, South Africa, and China, which are competitors says IL marketing specialist Darrel Good, pushing the US share of world corn trade to 65% from 60% last year. He says global demand will grow 9% because of smaller European and Mexican crops and more Chinese demand. Read his newsletter.

US soybean exports will remain steady with fewer purchases by Europe and China being offset by more purchases from Japan and Mexico. Good says that is happening at the same time Argentine and Brazilian exports are increasing. Production was down 31% in Argentina and 7% in Brazil last year, but planting will increase in both nations this year. Good says Argentina will raise 700 mil. more bu. and 185 mil. more in Brazil.

Soybean rust spread with a vengeance in the past several weeks, being found in every county in AL, all but 1 county in MS, nearly all of AR and LA, and spreading up the Mississippi River to southern MO and southern IL. It now has been found in 370 counties in 16 states as of Oct. 8. The most northern county is McDonough Co. in Illinois, near the Mississippi River at the latitude where the states of IA and MO meet.

Soybean rust reached the MO bootheel with the help of a weather system on Sept. 10. MO plant pathologist Allen Wrather says the recent infections were fresh, extensive, but would cause little damage because of the maturity of most soybeans, which were in stage R6. However, some July planted beans which were in stages R3 to R5 will be susceptible to damage and Wrather says farmers will need to make a decision on treatment.

Discolored soybeans, if you have them, are the result of many weather-related fungi that found this year to be perfect to work overtime. MO plant pathologist Laura Sweets identifies many types. Sweets says many of the pathogens causing discoloration will survive on seed beans, and heavily infected seed, if planted next year will produce diseased seedlings and poor stands.

Immature soybeans will not mature in the bin says MO crop specialist Bill Wiebold, “If death occurs late in the seed-filling, the green color is confined to the seed coat. If death occurs during early to mid fill, the green color remains throughout the interior of the seed." Green soybeans produce green soybean oil and processors will charge dockage because consumers do not want to cook or fry with vegetable oil with a green color.

If your soybeans did not mature before the freeze, Wiebold says split them with a knife and if only the coat is green, the soybeans should be classified as yellow beans and not docked. He says if less than 90% of the seed interior is yellow they will be graded as “soybeans of other color.” A load with 10% “other color” will be graded as standard and could receive substantial dockage, and a lesser quality will be graded “total damage.”

Kernels sprouting on the ear are being reported by KY agronomist Chad Lee, who says they are base kernels and are kept moist by the husk structure. And he adds, “Sprouting kernels are not a direct hazard to livestock. However, molds are sometimes associated with sprouting and some molds can produce mycotoxins. If corn is being used for livestock feed, have it checked for mycotoxins. Sprouting kernels will reduce test weight and yield, slightly.” He says it is just a symptom of the cool, wet fall.

Various molds and ear rots may be hiding in your fields, and may necessitate some fields being harvested before others while they are still standing, says IA plant pathologist Alison Robertson. Test at least 100 plants in a field looking for stalk firmness and if lower nodes are weak, which will threaten standability. Harvest weaker corn first.

Diplodia ear rot is a dense white mold between kernels, making them light weight and reducing nutritional value. Toxins are not produced. Diplodia usually spreads in the field but can be a problem in storage if the grain moisture exceeds 20%.

Giberella ear rot begins at the tip of the ear with a pink to red colored mold and can be found on ears damaged by hail. It will produce DON also known as vomitoxin.

Fusarium ear rot is indicated by a white, pink, or salmon colored mold anywhere on the ear. It is usually found where insects have damaged kernels or the ear has been damaged by hail and kernels turn brown. Fusarium produces a mycotoxin called fumonisin.

Giberella stalk rot causes a pink to reddish discoloration of the pith inside a corn stalk, but on the outside will be small, round, bluish-black bodies near the nodes of the stalk.

Anthracnose stalk rot will have black shiny lesions on the outside of the stalk and on the inside, the pith of affected corn plants will be discolored and shredded.

For some good news….corn will be able to break the 300 to 350 bu. barrier says Purdue agronomist Tony Vyn, as long as each plant has every opportunity to compete with other plants in the row, and inputs such as nitrogen and population are not limiting factors.

What corn hybrids are you planting next year? MN corn specialist Jeff Coulter says the steadily increasing yield is a result of picking hybrids that closely approximates the growing degree days in your area. He says pick them to mature 10 days prior to frost.
1) Plant multiple hybrids to spread risk and widen out the harvest interval.
2) Yield varies more within a relative maturity rating than between maturity groups.
3) Select hybrids that are top performers in multiple test sites and in different weather.
4) Select hybrids on standability, disease tolerance, and need of transgenic resistance.

Livestock producers grazing sudangrass or sorghum sundangrass should move animals away from those forages for several days following a frost that would produce prussic acid. Sudangrass 18+ inches or sorghum sudangrass that is 30+ in will recover in 3-4 days. Hold livestock away for 10 days to 2 weeks if the grass was shorter. New shoots on partially frosted plants can be toxic as well, and should be avoided for 2 weeks.

Alfalfa, clover, and other perennial forages do not produce toxins and can be grazed or baled and fed to livestock after a killing frost. If the forage is not needed, IA forage specialist Stephen Barnhart says it is best for the plants to be uncut and left for the winter. Alfalfa cut after a partial freeze will re-grow and use up energy needed for next spring.

What is your soil pH? If you don’t know, you need a soil test; and if it is too acidic because of your regular nitrogen applications (hint), you may need a good dose of lime. IL crop specialist Jim Morrison says there are many reasons to consider some limestone:
1) Lime lowers the soil concentration of aluminum and manganese, which can be toxic.
2) An increase in soil microbial activity is noted as soil acidity is decreased.
3) Liming enhances nitrogen fixation and may improve soil structure and tilth.

Sample for soybean SCN in the fall, but don’t look for corn nematodes. IA plant pathologist Greg Tylka says their numbers decrease in the latter part of the growing season, and if you find some, it is not possible to work backward and estimate how many you may have had. Needle and sting nematodes can be found in lower soil levels.

Soybean cyst nematodes are best found in the fall, and Tylka says look in your soybean fields if you detect yield loss from SCN. Sample soil at 6-8 inches down, with 15-20 samples taken and blended for a composite sample. A testing lab needs 1 cup of soil.

Late harvest means late wheat planting for many farmers and OH agronomists say there may be inadequate tiller development before winter dormancy. If planting late, boost the seeding rate to 1.6 to 2.0 million per acre, and recalibrate your drill based on seeds per pound. Plants may be smaller, with shallower roots, and susceptible to heaving. That means plant no-till with a 1.0 to 1.5 inch planting depth to reduce heaving by 95%.

It is a record-setter. Slaughter steer carcass weights for the 5-state marketing area topped 900# for a weekly average. But livestock economist Dillon Feuz at Utah St. questions any pride. Read his analysis.
1) In 2001, the average steer carcass weight for the same area was only 803#.
2) Prior to 1980 the same steer at the same markets averaged less than 700#.
3) To get consumers to eat more beef, the price must be lowered.
4) Each producer is doing what is best for him: adding more weight.
5) More total weight means a lower general market level price.

Did you always intend, but never got around, to learn the differences among various financial reports that could identify success or potential problems with your farming operation? If so, MN farm finance specialist James Kurtz offers a series of fact sheets on such reports as Balance Sheets, Income Statement, Statement of Owner Equity, Statement of Cash flows, and a fact sheet on various financial ratios. Find the fact sheets here.

Did you always intend, but never got around, to planning out your estate and transferring your tangible assets? If so, several MN farm finance specialists have created a series of fact sheets on what to think about, what to do, and how to go about the process of estate planning. To save time and money before going to an attorney, find fact sheets here.

Did you always intend, but never got around, to developing a process to transfer your farming operation to the next generation. If so, several MN farm finance specialists have developed a roadmap for Cornbelt farmers to consider and discuss among family members about ways to financially benefit and protect all parties in that process. Find the fact sheets here.

Are you spending more or less than Brazilian farmers on crop protectants for soybeans? The Oct. 5 newsletter of CropSpotters asked several Brazilian farmers about their soybean chemical costs. Don’t worry about the need to equate reals and dollars or hectares and acres. Their answers are already in terms of “bushels per acre” and their costs range in value from 2.7 to 6.9 bushels of soybeans per acre.

Posted by Stu Ellis on 10/09 at 01:05 AM | Permalink

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