Read this weekly Cornbelt digest of marketing, economic, agronomic, and management information.
Corn prices. Lack of bullish fundamental news allowed the market to fade lower, taking out
the psychologically important $6 mark, and then coming within 10¢ of the October lows, which
remains a key support level for the market. Bulls continue to hope that low prices will spur
international buying interest, but it has not occurred, not even from China which typically buys
below the $6 mark. In fact, export demand accounts for less than 10% of total demand.
Export sales for the week were under 14 million bushels, but because of early season sales,
shipments reached a marketing year high. Domestic demand remains high, helped by a
strong ethanol market. Tight pipeline supplies reflect lack of farmer selling, and have resulted
in old crop spreads remaining tight, but spreading out for the Dec 2011 vs. Dec 2012 spread.
Field work is essentially complete, except Ohio farmers have 30% of their crop still in the field.
1) Dec 11 corn closed at $5.825, down 6.25¢ for the day and down 27.75¢ for the week.
2) Dec 12 corn closed at $5.355, down 6.75¢ for the day and down 23.5¢ for the week.
Soybean prices. With the crop in the bin and farmers waiting for a selling opportunity, prices
continue to weaken and may soon be in the $10 range, thanks to the seemingly parallel track
with the Wall Street equities markets. Fundamental news has escaped the soybean traders,
except for weather reports from South America which are bearish. Rains have moved through
soybean production areas and remain in the forecast for Argentina and Brazil. China remains
the primary export customer, and with increasing profitability for the Chinese crushing industry
more beans may be exported. Currently, the slow pace threatens to miss 2011 projections.
1) Jan 12 beans closed at $11.065, down 16¢ for the day and down 41.5¢ for the week.
2) Nov 12 beans closed at $11.195, down 19¢ for the day and down 62¢ for the week.
Wheat prices. Despite dry weather throughout US production areas, prices continue to fade.
KCBT made new lows for the year and futures in both Chicago and MPLS are not far away.
Some of the weakness was attributed to elevators unloading long positions after farmers were
unable to deliver previously committed volumes. Weekly export numbers remain strong.
1) Dec 11 wheat closed at $5.745, down 4.75¢ for the day and down 23.75¢ for the week
2) Jul 12 wheat closed at $6.1775, down 7.5¢ for the day and down 28.25¢ for the week.
Corn futures have faded, but the basis is strong which IA St. economist Steven Johnson says
can be a help in marketing. He says it may not get much stronger for several more months,
but should not be pressured because domestic buyers need corn. He suggests using a hedge
to arrive contract and calculate the cost to roll it forward vs. spot cash pricing.
Soybean futures are also low, but the basis is not as strong as is the corn basis, says
Johnson. He says there is some carry in the market, but not enough to pay for storage, and
both the weak basis and carry reflect weak demand. Johnson says the January to July spread
had been only a nickel in September, but has now widened out to about 26¢.
If you have beans to sell, MI St. marketing specialist Jim Hilker says, “On the one hand,
$11 isn’t a bad soybean price, on the other hand, it is a dollar lower than a month ago. While
the market isn’t paying much for storage, if your opportunity cost is the savings account rate
interest, and your soybeans are already in the bin, and you have already priced a bunch,
should we be in a hurry to price more?” For pork producers, he says it is a good time to buy.
Pork producers may have their most profitable year in 2012, of any since corn prices began
to climb in 2007. Purdue economist Chris Hurt is forecasting a $17 per head profit, which is
the best since 2006 and corn averaged $2.30 per bu. Hurt says there are reasons to believe
that corn and bean meal prices may be settling, both in levels and in volatility, “Pork producers
do not quickly forget $7 & $8 corn prices and should be cautious in quickly expanding herds.”
Do you still have cash rent to negotiate? With soft commodity prices and increased input
costs, high cash rents can devastate an operator with negative profitability. IA St. economists
have created a series of cash rent determination formulas, based on your own statistics. Enter
your own data in a spreadsheet and the totals are used to calculate various cash rent rates.
Farmers with “smartphones” can obtain an “app” that will calculate your optimum nitrogen
rate, based on your general soil type, corn prices and nitrogen cost. The “app” is available for
Android phones says IL Extension crop specialist Dennis Bowman who developed the
technology, based on the Iowa State University model for Maximum Return to Nitrogen .
Soybean aphids are no longer getting “a free ride” because they are unnoticed, says Purdue
entomologist Christian Krupke, “Everyone is ready for them.” A potential threat occurred this
summer when weather conditions moderated and soybean fields in the upper Midwest were at
threshold levels and were treated. Krupke says scouting is an important step, especially
looking for aphids on buckthorn near soybeans before they move into bean fields.
If your seed order for 2012 includes crops that are resistant to 2,4-D, Purdue agronomists
want you to watch for potential problems with either moisture or nutrient uptake. They have
found the 2,4-D you will apply could have unintended consequences. It will take care of
grasses and broadleaves because it affects the auxins in the plants that control growth. But
they say a protein in a plant regulates the auxins and could also be affected in the crops that
are treated with 2,4-D. The result would be insufficient growth of root hairs needed for
moisture and nutrient absorption. Researchers say more water and nutrients may be needed.
If ruts and compaction reduce yield, how do you evaluate the cost of tillage to smooth over
the ruts and reduce compaction? Penn St. soil specialist Sjoerd Duiker says one disk/chisel
pass may cost $15/A, but that might prevent a 2.5% yield loss that really costs $30/A if corn is
yielding 200 bu./A. and the corn is worth $6/bu. Eliminating ruts can increase crop revenue.
It is planting time in South America, and www.cropspotters.com provides an update:
1) Mato Grosso is 94% complete with soybean planting and ahead of the recent rate.
2) Parana is 85% finished with beans, with Brazil nationally about 70% completed.
3) Argentine soybean planting is 37% complete with the expected acreage, 2% over 2011.
4) Argentine corn planting is 62% finished with the acreage expected to be planted.
5) Brazilian ag exports are $79+ bil. for the first 10 months of 2011, with $21 bil. in beans.
Ten Congressmen whose districts border the Missouri River have asked their colleagues on
the House Appropriations Committee to raise the priority of flood control projects to prevent a
repeat of the flooding during the 2011 crop year. They contend that the Army Corps of
Engineers is spending more money on environmental issues than on flood prevention.
If you have flood-damaged fields, IA St. Ag Engineer Shawn Shouse has a repair plan:
1) Before any work is done, call for help finding underground utility lines to avoid.
2) Use an aerial map to help evaluate damage and chart a course of action.
3) If underground fuel tanks or pesticide containers need removal, alert environmental offices.
4) Consult environmental and fire officials before burning trees, and debris, and burying ash.
5) Thin layers of plant material could be plowed under, but not returned to the river.
6) Thin sand deposits can be incorporated into the soil, but distribute deeper sand elsewhere.
7) Wetland records need to be consulted before spreading sand. It cannot go into the river.
8 Deeply eroded land may not be repairable and selective abandonment may be justified.
9) Soil with prolonged inundation will have similar characteristics as compacted soil.
10) Document all work, in case insurance or financial assistance is available.
Bankruptcy trustees for MF Global have told investors that claims can be filed by Jan. 31 to
seek restoration of their accounts, but the money yet to be distributed will mean a 40%
shortfall. The Oct. 31 bankruptcy of the large commodity clearing house impacted many
farmers and elevators who hedged their grain sales, but not all funds were segregated.
President Gary Niemeyer of the National Corn Growers says he’s disappointed in the failure
of the “Supercommittee” to complete its deficit reduction work, but supportive of the
leadership of the House and Senate Ag Committees to work so hard on trying to create a new
Farm Bill to plug into the deficit reduction process. But Sen. Pat Roberts was one of the four
and he criticized his colleagues for making the process so secretive, and said he had little to
do with any of it. He called for a return to “normal order” in developing new farm policy.
Cornbelt Update is a weekly publication by S2LS Ag Communications and Consulting.
Republication or distribution is prohibited without prior permission. Subscription fee
is $65 per year. Address subscription requests to: StuAgNews@aol.com © 2011
Get your daily update of valuable farming information at: www.farmgateblog.com .
Corn prices. Lack of bullish fundamental news allowed the market to fade lower, taking outthe psychologically important $6 mark, and then coming within 10¢ of the October lows, whichremains a key support level for the market. Bulls continue to hope that low prices will spurinternational buying interest, but it has not occurred, not even from China which typically buysbelow the $6 mark. In fact, export demand accounts for less than 10% of total demand.Export sales for the week were under 14 million bushels, but because of early season sales,shipments reached a marketing year high. Domestic demand remains high, helped by astrong ethanol market. Tight pipeline supplies reflect lack of farmer selling, and have resultedin old crop spreads remaining tight, but spreading out for the Dec 2011 vs. Dec 2012 spread.Field work is essentially complete, except Ohio farmers have 30% of their crop still in the field.1) Dec 11 corn closed at $5.825, down 6.25¢ for the day and down 27.75¢ for the week.2) Dec 12 corn closed at $5.355, down 6.75¢ for the day and down 23.5¢ for the week.
Soybean prices. With the crop in the bin and farmers waiting for a selling opportunity, pricescontinue to weaken and may soon be in the $10 range, thanks to the seemingly parallel trackwith the Wall Street equities markets. Fundamental news has escaped the soybean traders,except for weather reports from South America which are bearish. Rains have moved throughsoybean production areas and remain in the forecast for Argentina and Brazil. China remainsthe primary export customer, and with increasing profitability for the Chinese crushing industrymore beans may be exported. Currently, the slow pace threatens to miss 2011 projections.1) Jan 12 beans closed at $11.065, down 16¢ for the day and down 41.5¢ for the week.2) Nov 12 beans closed at $11.195, down 19¢ for the day and down 62¢ for the week.
Wheat prices. Despite dry weather throughout US production areas, prices continue to fade.KCBT made new lows for the year and futures in both Chicago and MPLS are not far away.Some of the weakness was attributed to elevators unloading long positions after farmers wereunable to deliver previously committed volumes. Weekly export numbers remain strong.1) Dec 11 wheat closed at $5.745, down 4.75¢ for the day and down 23.75¢ for the week2) Jul 12 wheat closed at $6.1775, down 7.5¢ for the day and down 28.25¢ for the week.
Corn futures have faded, but the basis is strong which IA St. economist Steven Johnson sayscan be a help in marketing. He says it may not get much stronger for several more months,but should not be pressured because domestic buyers need corn. He suggests using a hedgeto arrive contract and calculate the cost to roll it forward vs. spot cash pricing.
Soybean futures are also low, but the basis is not as strong as is the corn basis, saysJohnson. He says there is some carry in the market, but not enough to pay for storage, andboth the weak basis and carry reflect weak demand. Johnson says the January to July spreadhad been only a nickel in September, but has now widened out to about 26¢.
If you have beans to sell, MI St. marketing specialist Jim Hilker says, “On the one hand,$11 isn’t a bad soybean price, on the other hand, it is a dollar lower than a month ago. Whilethe market isn’t paying much for storage, if your opportunity cost is the savings account rateinterest, and your soybeans are already in the bin, and you have already priced a bunch,should we be in a hurry to price more?” For pork producers, he says it is a good time to buy.
Pork producers may have their most profitable year in 2012, of any since corn prices beganto climb in 2007. Purdue economist Chris Hurt is forecasting a $17 per head profit, which isthe best since 2006 and corn averaged $2.30 per bu. Hurt says there are reasons to believethat corn and bean meal prices may be settling, both in levels and in volatility, “Pork producersdo not quickly forget $7 & $8 corn prices and should be cautious in quickly expanding herds.”
Do you still have cash rent to negotiate? With soft commodity prices and increased inputcosts, high cash rents can devastate an operator with negative profitability. IA St. economistshave created a series of cash rent determination formulas, based on your own statistics. Enteryour own data in a spreadsheet and the totals are used to calculate various cash rent rates.
Farmers with “smartphones” can obtain an “app” that will calculate your optimum nitrogenrate, based on your general soil type, corn prices and nitrogen cost. The “app” is available forAndroid phones says IL Extension crop specialist Dennis Bowman who developed thetechnology, based on the Iowa State University model for Maximum Return to Nitrogen .
Soybean aphids are no longer getting “a free ride” because they are unnoticed, says Purdueentomologist Christian Krupke, “Everyone is ready for them.” A potential threat occurred thissummer when weather conditions moderated and soybean fields in the upper Midwest were atthreshold levels and were treated. Krupke says scouting is an important step, especiallylooking for aphids on buckthorn near soybeans before they move into bean fields.
If your seed order for 2012 includes crops that are resistant to 2,4-D, Purdue agronomistswant you to watch for potential problems with either moisture or nutrient uptake. They havefound the 2,4-D you will apply could have unintended consequences. It will take care ofgrasses and broadleaves because it affects the auxins in the plants that control growth. Butthey say a protein in a plant regulates the auxins and could also be affected in the crops thatare treated with 2,4-D. The result would be insufficient growth of root hairs needed formoisture and nutrient absorption. Researchers say more water and nutrients may be needed.
If ruts and compaction reduce yield, how do you evaluate the cost of tillage to smooth overthe ruts and reduce compaction? Penn St. soil specialist Sjoerd Duiker says one disk/chiselpass may cost $15/A, but that might prevent a 2.5% yield loss that really costs $30/A if corn isyielding 200 bu./A. and the corn is worth $6/bu. Eliminating ruts can increase crop revenue.
It is planting time in South America, and www.cropspotters.com provides an update:1) Mato Grosso is 94% complete with soybean planting and ahead of the recent rate.2) Parana is 85% finished with beans, with Brazil nationally about 70% completed.3) Argentine soybean planting is 37% complete with the expected acreage, 2% over 2011.4) Argentine corn planting is 62% finished with the acreage expected to be planted.5) Brazilian ag exports are $79+ bil. for the first 10 months of 2011, with $21 bil. in beans.
Ten Congressmen whose districts border the Missouri River have asked their colleagues onthe House Appropriations Committee to raise the priority of flood control projects to prevent arepeat of the flooding during the 2011 crop year. They contend that the Army Corps ofEngineers is spending more money on environmental issues than on flood prevention.
If you have flood-damaged fields, IA St. Ag Engineer Shawn Shouse has a repair plan:1) Before any work is done, call for help finding underground utility lines to avoid.2) Use an aerial map to help evaluate damage and chart a course of action.3) If underground fuel tanks or pesticide containers need removal, alert environmental offices.4) Consult environmental and fire officials before burning trees, and debris, and burying ash.5) Thin layers of plant material could be plowed under, but not returned to the river.6) Thin sand deposits can be incorporated into the soil, but distribute deeper sand elsewhere.7) Wetland records need to be consulted before spreading sand. It cannot go into the river.8 Deeply eroded land may not be repairable and selective abandonment may be justified.9) Soil with prolonged inundation will have similar characteristics as compacted soil.10) Document all work, in case insurance or financial assistance is available.
Bankruptcy trustees for MF Global have told investors that claims can be filed by Jan. 31 toseek restoration of their accounts, but the money yet to be distributed will mean a 40%shortfall. The Oct. 31 bankruptcy of the large commodity clearing house impacted manyfarmers and elevators who hedged their grain sales, but not all funds were segregated.
President Gary Niemeyer of the National Corn Growers says he’s disappointed in the failureof the “Supercommittee” to complete its deficit reduction work, but supportive of theleadership of the House and Senate Ag Committees to work so hard on trying to create a newFarm Bill to plug into the deficit reduction process. But Sen. Pat Roberts was one of the fourand he criticized his colleagues for making the process so secretive, and said he had little todo with any of it. He called for a return to “normal order” in developing new farm policy.
Cornbelt Update is a weekly publication by S2LS Ag Communications and Consulting.Republication or distribution is prohibited without prior permission. Subscription feeis $65 per year. Address subscription requests to: StuAgNews@aol.com © 2011Get your daily update of valuable farming information at: www.farmgateblog.com .
27
Corn Belt Update-Week of November 28
Corn prices. Lack of bullish fundamental news allowed the market to fade lower, taking outthe psychologically important $6 mark, and then coming within 10¢ of the October lows, whichremains a key support level for the market. Bulls continue to hope that low prices will spurinternational buying interest, but it has not occurred, not even from China which typically buysbelow the $6 mark. In fact, export demand accounts for less than 10% of total demand.Export sales for the week were under 14 million bushels, but because of early season sales,shipments reached a marketing year high. Domestic demand remains high, helped by astrong ethanol market. Tight pipeline supplies reflect lack of farmer selling, and have resultedin old crop spreads remaining tight, but spreading out for the Dec 2011 vs. Dec 2012 spread.Field work is essentially complete, except Ohio farmers have 30% of their crop still in the field.1) Dec 11 corn closed at $5.825, down 6.25¢ for the day and down 27.75¢ for the week.2) Dec 12 corn closed at $5.355, down 6.75¢ for the day and down 23.5¢ for the week.
Soybean prices. With the crop in the bin and farmers waiting for a selling opportunity, pricescontinue to weaken and may soon be in the $10 range, thanks to the seemingly parallel trackwith the Wall Street equities markets. Fundamental news has escaped the soybean traders,except for weather reports from South America which are bearish. Rains have moved throughsoybean production areas and remain in the forecast for Argentina and Brazil. China remainsthe primary export customer, and with increasing profitability for the Chinese crushing industrymore beans may be exported. Currently, the slow pace threatens to miss 2011 projections.1) Jan 12 beans closed at $11.065, down 16¢ for the day and down 41.5¢ for the week.2) Nov 12 beans closed at $11.195, down 19¢ for the day and down 62¢ for the week.
Wheat prices. Despite dry weather throughout US production areas, prices continue to fade.KCBT made new lows for the year and futures in both Chicago and MPLS are not far away.Some of the weakness was attributed to elevators unloading long positions after farmers wereunable to deliver previously committed volumes. Weekly export numbers remain strong.1) Dec 11 wheat closed at $5.745, down 4.75¢ for the day and down 23.75¢ for the week2) Jul 12 wheat closed at $6.1775, down 7.5¢ for the day and down 28.25¢ for the week.
Corn futures have faded, but the basis is strong which IA St. economist Steven Johnson sayscan be a help in marketing. He says it may not get much stronger for several more months,but should not be pressured because domestic buyers need corn. He suggests using a hedgeto arrive contract and calculate the cost to roll it forward vs. spot cash pricing.
Soybean futures are also low, but the basis is not as strong as is the corn basis, saysJohnson. He says there is some carry in the market, but not enough to pay for storage, andboth the weak basis and carry reflect weak demand. Johnson says the January to July spreadhad been only a nickel in September, but has now widened out to about 26¢.
If you have beans to sell, MI St. marketing specialist Jim Hilker says, “On the one hand,$11 isn’t a bad soybean price, on the other hand, it is a dollar lower than a month ago. Whilethe market isn’t paying much for storage, if your opportunity cost is the savings account rateinterest, and your soybeans are already in the bin, and you have already priced a bunch,should we be in a hurry to price more?” For pork producers, he says it is a good time to buy.
Pork producers may have their most profitable year in 2012, of any since corn prices beganto climb in 2007. Purdue economist Chris Hurt is forecasting a $17 per head profit, which isthe best since 2006 and corn averaged $2.30 per bu. Hurt says there are reasons to believethat corn and bean meal prices may be settling, both in levels and in volatility, “Pork producersdo not quickly forget $7 & $8 corn prices and should be cautious in quickly expanding herds.”
Do you still have cash rent to negotiate? With soft commodity prices and increased inputcosts, high cash rents can devastate an operator with negative profitability. IA St. economistshave created a series of cash rent determination formulas, based on your own statistics. Enteryour own data in a spreadsheet and the totals are used to calculate various cash rent rates.
Farmers with “smartphones” can obtain an “app” that will calculate your optimum nitrogenrate, based on your general soil type, corn prices and nitrogen cost. The “app” is available forAndroid phones says IL Extension crop specialist Dennis Bowman who developed thetechnology, based on the Iowa State University model for Maximum Return to Nitrogen .
Soybean aphids are no longer getting “a free ride” because they are unnoticed, says Purdueentomologist Christian Krupke, “Everyone is ready for them.” A potential threat occurred thissummer when weather conditions moderated and soybean fields in the upper Midwest were atthreshold levels and were treated. Krupke says scouting is an important step, especiallylooking for aphids on buckthorn near soybeans before they move into bean fields.
If your seed order for 2012 includes crops that are resistant to 2,4-D, Purdue agronomistswant you to watch for potential problems with either moisture or nutrient uptake. They havefound the 2,4-D you will apply could have unintended consequences. It will take care ofgrasses and broadleaves because it affects the auxins in the plants that control growth. Butthey say a protein in a plant regulates the auxins and could also be affected in the crops thatare treated with 2,4-D. The result would be insufficient growth of root hairs needed formoisture and nutrient absorption. Researchers say more water and nutrients may be needed.
If ruts and compaction reduce yield, how do you evaluate the cost of tillage to smooth overthe ruts and reduce compaction? Penn St. soil specialist Sjoerd Duiker says one disk/chiselpass may cost $15/A, but that might prevent a 2.5% yield loss that really costs $30/A if corn isyielding 200 bu./A. and the corn is worth $6/bu. Eliminating ruts can increase crop revenue.
It is planting time in South America, and www.cropspotters.com provides an update:1) Mato Grosso is 94% complete with soybean planting and ahead of the recent rate.2) Parana is 85% finished with beans, with Brazil nationally about 70% completed.3) Argentine soybean planting is 37% complete with the expected acreage, 2% over 2011.4) Argentine corn planting is 62% finished with the acreage expected to be planted.5) Brazilian ag exports are $79+ bil. for the first 10 months of 2011, with $21 bil. in beans.
Ten Congressmen whose districts border the Missouri River have asked their colleagues onthe House Appropriations Committee to raise the priority of flood control projects to prevent arepeat of the flooding during the 2011 crop year. They contend that the Army Corps ofEngineers is spending more money on environmental issues than on flood prevention.
If you have flood-damaged fields, IA St. Ag Engineer Shawn Shouse has a repair plan:1) Before any work is done, call for help finding underground utility lines to avoid.2) Use an aerial map to help evaluate damage and chart a course of action.3) If underground fuel tanks or pesticide containers need removal, alert environmental offices.4) Consult environmental and fire officials before burning trees, and debris, and burying ash.5) Thin layers of plant material could be plowed under, but not returned to the river.6) Thin sand deposits can be incorporated into the soil, but distribute deeper sand elsewhere.7) Wetland records need to be consulted before spreading sand. It cannot go into the river.8 Deeply eroded land may not be repairable and selective abandonment may be justified.9) Soil with prolonged inundation will have similar characteristics as compacted soil.10) Document all work, in case insurance or financial assistance is available.
Bankruptcy trustees for MF Global have told investors that claims can be filed by Jan. 31 toseek restoration of their accounts, but the money yet to be distributed will mean a 40%shortfall. The Oct. 31 bankruptcy of the large commodity clearing house impacted manyfarmers and elevators who hedged their grain sales, but not all funds were segregated.
President Gary Niemeyer of the National Corn Growers says he’s disappointed in the failureof the “Supercommittee” to complete its deficit reduction work, but supportive of theleadership of the House and Senate Ag Committees to work so hard on trying to create a newFarm Bill to plug into the deficit reduction process. But Sen. Pat Roberts was one of the fourand he criticized his colleagues for making the process so secretive, and said he had little todo with any of it. He called for a return to “normal order” in developing new farm policy.
Cornbelt Update is a weekly publication by S2LS Ag Communications and Consulting.Republication or distribution is prohibited without prior permission. Subscription feeis $65 per year. Address subscription requests to: StuAgNews@aol.com © 2011Get your daily update of valuable farming information at: www.farmgateblog.com .