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Friday, August 14, 2009

Cornbelt Update



 

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.

August 14 is the ACRE sign-up deadline if 2009 crops are to be enrolled in the USDA’s new risk management program. Records are not required at sign-up, only the signatures of operators and owners, or operators with power of attorney for owners. The program is designed to compensate if farm revenue fails to match state revenues.

Based on Wednesday’s crop report, Purdue marketing specialist Chris Hurt expects ACRE to provide a payment for 2009 IN corn. “With current information, and assuming the 163 bushel yield will hold, this means if the US average farm price for the 2009 crop is below $3.58/bushel the state ACRE payment would be triggered. USDA estimated on August 12 that the US farm price would be between $3.10 and $3.90. The midpoint of that range is $3.50. At $3.10, the average Indiana corn ACRE payment would be $65/acre of corn planted in 2009. At $3.20 it would be $51/acre; at $3.30 $37/acre and at $3.50-the midpoint of their estimate, 2009 corn ACRE payments would be $10/acre.”

Chris Hurt thinks soybeans will also earn an ACRE payment. “USDA on August 12 estimated that IN soybean yields would be 45 bu. per acre. With current information, and assuming the 45 bushel yield will hold, this means if the US average farm price for the 2009 crop is below $9.71 per bu. the state ACRE payment would be triggered. USDA estimated on August 12 that the US farm price would be between $8.40 and $10.40. The midpoint of that range is $9.40. At $8.40, the average Indiana soybean ACRE payment would be $49/acre of soybeans planted in 2009. At $9.00 it would be $27 per acre; at $9.40-the midpoint of their estimate, 2009 soybean ACRE payments would be $12/acre.”

The biggest surprise in the USDA crop report this week was the fact USDA did not lower planted corn acres, after announcing that 7 states would be resurveyed for planted acreage. KS marketing specialist Mike Woolverton says harvested acres were cut by 100,000, but USDA stayed with the June 30th estimate of 87 million acres planted.

Yields are the biggest questions now, says Woolverton at KS State. He says USDA raised the projected yield to 159.5 bu. compared to the 153.9 bu. yield of 2008. Woolverton says corn was planted late in the eastern Cornbelt, which normally cuts yield. And he says 1/3 of the Cornbelt has been dry for several weeks, and the late August forecasts which call for cooler temperatures will slow crop development.

The USDA Supply-Demand report held bullish news for soybeans in the mind of Woolverton. With USDA adjusting estimates for planted and harvested acres, plus the crush and export demand for 2010, as well as the residual category, Woolverton says USDA was trying to keep new beans above the bare minimum pipeline supply. He says any cut in soybean yield in future reports will tighten stocks and ration the supply.

A large corn crop and a drop in prices may stimulate the ethanol industry, says Purdue’s Chris Hurt, “The big question that will determine whether we can turn some of those ethanol plants back on is the blending wall with E10," Hurt said, "Whether the EPA does or does not allow us to go to E15 is going to be critical in this market."

Corn yield prospects continue to improve, say IL crop forecasters basing their numbers on weather data and crop conditions. The trend yield is 154.9 bu. for corn, but depending on August weather they say they national yield could range from 158.5 to 171.1 bu. Read more.
1) Illinois corn yields could range from a low of 164.2 to 180.6 for a high.
2) Indiana corn yields could range from a low of 160.0 to 174.1 for a high.
3) Iowa corn yields could range from a low of 188.1 to 201.1 for a high.
4) Based on current conditions, US corn production could reach 12.9 bil. bu.

Soybean yield prospects are improving say IL ag economists Darrel Good and Scott Irwin, and meteorologist Mike Tannura. The trend yield is 42.2 bu., but depending on August weather they say they national yield could range from 41.4 bu. to 45.6 bu. Read more.
1) Illinois bean yields could range from a low of 44.7 to 49.6 for a high.
2) Indiana bean yields could range from a low of 46.4 to 49.9 for a high.
3) Iowa bean yields could range from a low of 51.8 to 57.4 for a high.
4) Based on current conditions, US soybean production could reach 3.37 bil. bu.

Wheat exports will have to hustle to make USDA’s target, based on shipments since the marketing year began on June 1. The target is 925 mil. bu. and the total export inspections to date are 130.7 mil. bu., which are already nearly 100 mil. behind the pace of last year. However, IL economist Darrel Good says 2008 was a fast paced year.

Wheat futures were near $7 in early June, but spot cash prices for soft red winter wheat are in the low $3 range, which is a function of the weak basis. Darrel Good says there is a poor export demand for US wheat, but it could pick up if a strong El Nino dries out the Australian wheat crop or if low prices curtail US wheat plantings this fall. Read his weekly newsletter.

Good wheat crops around the world are offsetting a reduction in planted acreage says KS State marketing specialist Mike Woolverton, who adds global production will be down only 3%. US production will be down 13% due to smaller total area planted. He says USDA’s marketing year average farm wheat price will be $4.70 to $5.70 per bu.

Are you hedging or speculating? IL ag law specialist Gary Hoff says 1,700 more auditors have been hired by the IRS to increase audits, and hedging transactions will be among their points of interest. Hoff says hedging losses must be accompanied by a transaction to deliver the grain to fulfill the contract. Farmers without sufficient grain storage, who “store on the board,” are engaging in speculation and deductions change.

Soybean aphids #1. IL researchers have found soybean genetics that allow soybeans to resist a threat by aphids—2 US public varieties and a Japanese variety. The US varieties were not adaptable to the Midwest, so breeding programs have expanded the seed supply and a commercial variety with glyphosate tolerance should be on the market in 2010.

Soybean aphids #2. The IL soybean breeders however found a new aphid specie that is not impaired by the US varieties, but the Japanese variety still has resistance to this new aphid. Researchers say the Japanese variety will be released commercially as a non-GMO bean to help organic soybean growers avert serious problems with aphids.

Soybean aphids #3. Aphid densities for 2009 throughout most of the Cornbelt are well below economic thresholds of 250 aphids per plant with 80% of plants infested, says IL crop specialist Jim Morrison who adds, “I urge growers not to treat soybean fields that are below the economic threshold because of the questionable yield benefit and the certain negative effects an insecticide application will have on natural enemies.”

Soybean aphids #4. OH State entomologists want you to, “Remember that the threshold for treatment is an average of 250 aphids per plant with the population rising. Economic damage will not occur until you reach 700-800 aphids per plant. The level of 250 aphids per plant is a very conservative threshold.” That threshold was established to give a grower time to arrange for the crop to be sprayed before the large threshold was reached.

Soybean aphids #5. Winged aphids are reported by IA entomologist Erin Hodgson to be moving, and she urges continued scouting because fields that might have been clean last week could have aphids this week. Hodgson says as plants mature they become less attractive to aphids, but they will feed on plants that are at the R7 stage.

Soybean aphids #6. Is there an economic advantage for treatment to late stage soybeans that have aphid infestations? Hodgson says treatments pay to the R5.5 stage, and research on aphid treatment at R6 yielded mixed results. She says soybean plants at R6 may be able to tolerate more aphids without experiencing a yield loss.

Don’t try to order them for 2010, but soybeans with a Bt gene to protect them from soybean aphids and Japanese beetles may be available in future years. That is the prediction of IL entomologist Mike Gray following successful research in Georgia to develop Bt beans that fight insects indigenous to Southern states.

Volunteer Bt corn may be creating monsters in your soil say entomologists. Purdue’s Christian Krupke has found numerous fields with volunteer corn, which had rootworm Bt genes and other traits, which he said was an unforeseen consequence of gene stacking. At IL Mike Gray says that escalates the evolution of resistance for rootworms to Bt genes, since they are feeding on plants that have reduced levels of the Bt toxins.

Volunteer corn not only is a threat to create resistant rootworms, but creates weed control issues as well, says IL agronomist Vince Davis, in his latest newsletter. Davis cites two issues:
1) You may be spending too much money for a second herbicide to control herbicide resistant weeds, since the cost is the result of planting the first herbicide resistant crop.
2) Concerns are becoming more prevalent that the inability to control volunteer corn that is glyphosate tolerant will help convey Bt resistance to corn rootworms.

Volunteer corn cuts soybean yields according to a variety of researchers quoted by NE specialists. 5,000 volunteer stalks per acre will reduce bean yields by 20%. Also bean yields are cut by 1% for every 75-115 clumps of corn per acre. The NE specialists say any delay in controlling volunteer corn requires higher rates and higher costs.

After vacationing on the Gulf Coast, soybean rust is venturing northward, and has returned to work with jobsites in southeastern Arkansas and central Mississippi. Those states were added to the USDA Asian rust website. Since the Aug. 10 finding in those states, more counties in Florida and Georgia were added.

An early harvest of 19% moisture corn with a 75ºF starting temperature is fraught with peril if your drying system fails. NE specialist Tom Dorn says a full market grade can be lost in only 5 days if the grain is allowed to heat and deteriorate. Dorn also says:
1) Stored grain insects cannot live on extremely dry grain of less than 10% moisture.
2) It is impractical to dry grain below the mold threshold of 15% winter, 14% summer.
3) Insects are generally inactive below 55ºF and will not reproduce.
4) Incrementally warm grain in the spring or moisture will condense in the bin middle.

Park your herbicide sprayer, say Purdue specialists who say soybeans are setting pods and it is too late for both Liberty Link and Roundup. They say leaf burn on mature plants is worse than on young plants, which grow out of that problem. And they add that most weeds are going to be too tall for any effective control at this time in the season.

Western bean cutworms may be cutting into your corn ears, but unless you have a high value food grade corn Purdue specialists say a rescue treatment may not pay:
1) Control, in corn that has already pollinated, will likely be less than 50%.
2) 1 larva/ear at dent stage corn is approximately equal to a 4 bushel/acre loss.
3) Ear damage opens the door for molds, a concern in food grade corn.
4) Larvae in the ear will NOT be controlled, larvae exposed or that exit the ear can be.
5) Larvae become less mobile as temperatures increase.
6) Increased carrier volume will improve the canopy penetration into the ear zone.
7) Insecticides will provide about a week of efficacy, depending on the environment.
8) Pre-Harvest intervals for insecticides must be followed (most are 21 to 30 days).
9) YieldGard® does not prevent or control western bean cutworm, Herculex® does.

How long did your corn silks grow? They typically emerge a couple days after tassel emergence, but Purdue’s Bob Nielsen says the cool weather brought some out early and he’s measure silks up to 9 inches long. Nielsen says many farmers have expressed concern about the long silks impeding fertilization, and he says if they began emerging before the tassel and began to deteriorate, their kernel may not develop. Read his comments.

Pork producers should buckle their seat belt. That is the advice of MO livestock economist Glenn Grimes who says marketings are not current, there is extra tonnage, and the number of hogs backed up for fall and winter marketing “will be brutal for hog producers. Prices in the lower $30’s for 51-52% lean hogs are likely. There is a relative high probability that losses in 2009 will exceed 1998 losses.”

Posted by Stu Ellis on 08/14 at 04:24 AM | Permalink

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