Blogging by the Bushel
With numerous challenges over the past several years for producers, we at Mercer Landmark understand the need for a comprehensive risk management solution. We seek to provide our customers with unparalleled service to ensure maximum results.

Archive for June, 2014

By: Gary Prill – Mercer Landmark Agronomist

I have talked with several farmers who are thinking about getting their combines out of the back corner of their barns to get them ready for wheat harvest.  One task that should be on your list for getting your combine ready for a new harvest season is setting up your yield monitor if you run one.  It is better to do this now when you are setting up the rest of the combine, than to wait till you hit the field on that first day of wheat harvest when you are in a hurry to get started cutting.  Even if you didn’t plant any wheat this year, now is still a good time to take the following steps to get your yield monitor ready for fall harvest.

Every yield monitor is a little different, but there are still things in common that can be done to help get them ready.  First among these is to clear out last season’s yield data and loads (Make sure if you haven’t exported last year’s data to an external storage device that you do this before clearing the monitor and the logging card/stick).  Mercer Landmark’s Precision Ag department can help with this if you don’t have software for working with your monitor’s data.  This will keep you from mixing old data with new loads/regions you create for your fields.  Most monitors will save your farms and fields information from year to year, but it is always a good idea to go in to your monitor and enter the new commodity being grown in each field ahead of time.  That way when you switch fields in the heat of harvest your monitor is already set up with the correct parameters for the grain you are about to harvest.  New farms and fields can also be added at this time.  Another thing to keep in mind is if you traded or upgraded grain heads over the winter to a different width head, now would be a good time to go into your monitor and change your settings for swath width and the header height on/off switch for logging data.

One final thought when getting your yield monitor set up for a new year is that calibration of the monitor is a yearly task if you want it to collect accurate yield information on your fields.  Each commodity (wheat, soybeans, corn, etc.) requires it own calibration check to make sure the monitor is still measuring grain yield accurately.  Last year’s calibration numbers may still be good (or they may not), but at the very least a couple new calibration loads should be done to help fine tune your yield monitor.  If your yield numbers are way off base it may require deleting old calibration load information and starting from scratch with all new calibration loads.  Your yield monitor manual and equipment dealer are the best sources for help if you encounter problems getting your yield monitor ready for a new season.  Your local Mercer Landmark branch may also be able to provide a weigh wagon to help with grain calibration if needed.   Taking time now to get your combine yield monitor ready for a new harvest will make that first day of cutting a lot less stressful, and ensure the yield data you collect will be provide accurate useful information for future decisions.

By: Anna Kaverman

The June 30th crop report is looming around the corner and has been known to be a market mover in the past. These statistics prove just how true that is.

The last 10 years, the reports that we will see Monday have caused the corn market to move higher 3 times, lower 6 times, with 1 push. 3 times, the move has been greater than 20 cents. Soybeans have traded higher 5 times, and lower 5 times. 4 times, the move has been greater than 20 cents.

December 13 Corn Down 27

December 12 Corn Up 2 ¾

December 11 Corn Down 30

December 10 Corn Up 29 ½

December 09 Corn Down 6 ¼

December 08 Corn Unchanged

December 07 Corn Down 7 ½

December 06 Corn Up 2 ½

December 05 Corn Down 2

December 04 Corn Down 1 ½

November 13 Beans Down 21 ¼

November 12 Beans Up 23 ¾

November 11 Beans 29

November 10 Beans Down 7 ¾

November 09 Beans Down 1 ½

November 08 Beans Down 1

November 07 Beans Up 41 ½

November 06 Beans Up 3

November 05 Beans Up 2 ¼

November 04 Beans Up 2 ¾

This video was showed to me over the weekend and I think it portrays exactly why being a cooperative is an advantage. I hope you enjoy it as much as I did.

Happy Monday!

By: Brian Grete

June  20,  2014

There is a fair amount of chatter on social media from the bullish camp about comparisons to 1993 after record flooding in parts of the western Corn Belt this week. For those of you who are dealing with flooding, it may seem like this year is as bad (or worse) than the historic flood that year, but this is not 1993. That year featured rains that didn’t stop once they started and flood waters that failed to recede. Crops didn’t have a chance to catch their breath and final yields reflected that.

There’s also a fair amount of talk on social media from the bearish camp that this year is comparable to 1994, when final yields topped then-record yields by around 7 bu. per acre. While crop ratings as of mid-June would suggest that to be a good comparison, I believe there are now too many crop issues for that to be the best comparison.

The best comparison that I see at this point is 2008 — a year that featured heavy flooding in some areas, but also saw flood waters recede relatively quickly, allowing crops to recover. While the flooded areas are different than in 2008, there are similarities. The national average corn yield that year was 153.9 bu. per acre — the exact same figure USDA initially projected in its May Supply & Demand Report. I’m not saying this year’s corn crop will yield 165.3 bu. per acre that USDA initially projected. In fact, I believe that’s probably about the top end of the yield range this year if conditions are near ideal from here forward. But the makings are there for a very good corn yield this year despite struggles in areas of the western Corn Belt.

Key will be how quickly flood waters recede and allow crops to “heal.” Since creeks, streams and rivers weren’t high ahead of this week’s flooding, the flood waters should recede relatively quickly, giving the crop a chance to rebound relatively well — if there aren’t prolonged heavy rains.

As for the amount of crop that may be lost to flooding, that’s really hard to quantify at this point. I asked a north-central Iowa Member for his take and he responded with, “In the worst hit areas, 10% (lost yield potential) is reasonable. Rains were more help than hurt for most. We are in decent shape around here. We had 4 to 7 inches over the past week and water is receding. We were getting dry so we were able to handle most.”

Unless USDA’s crop condition ratings show a sharp downturn as of June 22, which I do not expect, it’s going to be difficult to convince “the market” there’s much wrong with this crop as a whole despite the struggles for some. I expect to see a one- to two-point downturn in the “good” to “excellent” categories for corn Monday. Of course, I was looking for a one-point downtick in the top two categories this past week and USDA showed a one-point improvement.

One thing to keep in mind… USDA completed its survey work for its June Acreage Report prior to the heavy flooding in areas of the western Corn Belt. Since some acres will be lost to flooding and other storm damage, USDA’s June planted acreage figures are likely to be “heavy.” If that’s the case, the market is likely to realize this later rather than sooner.

Need to catch up? Here are some food, agriculture and farm stories you might have missed this week.

1. Conservation threat. Waters of the U.S interpretive rule comes with its own set of issues that could curb interest in NRCS-backed conservation measures, farmers say. Farm Futures

2. Antibiotic resistance. The so-called “superbug” threat has previously been pinned on ag and on hospitals, but what’s the role of fake antibiotics? Bloomberg

3. Coffee Toffee Bar Crunch. It’s a new name for an old Ben & Jerry’s product that has a GMO twist. USA Today

4. While on the topic of GMOs…New York’s labeling bill has been shelved – for now. Farm Progress

5. Protein pinch. Restaurants, Paleo dieters and food marketers say protein-packed meals are getting costlier. Bloomberg

6. PEDV vaccine. USDA has approved a conditional license on a vaccine for porcine epidemic diarrhea virus. Feedstuffs

7. Texas seeks ‘super weed’ asylum. Texas Department of Ag looks for ways to fight palmer amaranth spread. Wall Street Journal

And your bonus:

Goat-milking inmates. Small farm businesses that need labor for boutique-size production are looking for workers in an interesting place. Fortune

Try not to cry. A long-time Indiana farmer gets his wish to ride in the tractor one more time. WLFI

By: Brad Miller – Mercer Landmark Agronomist

I have noticed many soybean fields that are yellow in color even though we have had adequate moisture and warm temperatures.   So what is the cause?  In a lot of cases the soybeans are lacking nitrogen.   Soybean plants receive the majority of their nitrogen by fixing atmospheric nitrogen.  To fix nitrogen the plants need air to be exchanged in the soil.  Tight or compacted soils have less air exchange and will produce less nodules.  The bacteria that is needed to fix the nitrogen and produce nodules usually begin a week after emergence and takes several weeks to fully develop the nodules, generally around the V3 or third trifoliate stage. If when the nodules are forming and there is not a lot of residual nitrogen in the ground then the plants look a pale yellow.   If the problem persists contact your local Mercer Landmark representative to look at your field.

By: Darrel Good

06/16/2014

The U.S. average corn yield was record large in 1985, 1986, and 1987 and established new highs five times in the succeeding 26 years.  Similarly, the U.S. average soybean yield was record large in 1985 and established new highs eight times in the succeeding 26 years. The most recent record yield was in 2009 for both crops. Average yields were below trend value in each of the past four years.

Expectations for the U.S. average corn and soybean yields this year have increased in recent weeks.  Corn planting got off to a slow start, much like last year. Even though progress accelerated in May, more than the average percentage of the crop was planted after the third week of May. Based on the USDA’s weekly Crop Progress report, an estimated 23% of the corn acreage in the 18 major corn-producing states was planted after May 20, compared to the 1986 through 2013 average of 15%. More than the average portion of the corn acreage was planted late in five of the past seven years. Most of the late planting this year occurred in northern and far eastern corn-producing states.  Yield potential is reduced for corn planted after the second or third weeks of May, all other conditions equal.  However, weather conditions over the past month have been generally favorable for corn emergence and development, resulting in high yield expectations in spite of more than the usual amount of late planting.  The USDA acknowledged these conditions in the June 11 WASDE report as the reason for keeping the 2014 yield projection at a record 165.3 bushels per acre.

The USDA’s weekly ratings of corn conditions have also supported high yield expectations.  As of June 8 (23rd week of the year), 75% of the crop in the 18 major corn-producing states was rated in either good or excellent condition. In the previous 28 years (excluding 1995 when ratings were not yet available due to extremely late planting), an average of 66% of the crop was rated in good or excellent condition at the end of the 23rd week. The portion of the crop rated in good or excellent condition was higher than this year in only five previous years. Crop condition ratings tend to decline as the growing season progresses and early season ratings are not a good indicator of either final ratings or the U.S. average yield. Still, the current high ratings along with a mostly favorable weather outlook are keeping yield expectations high. The major concerns in the near term center on deteriorating conditions in areas that have received excessive rainfall in recent weeks. The effect of flooding and ponding may begin to be revealed in the crop condition ratings to be released today. Those concerns are legitimate but are likely outweighed by the beneficial impact of favorable weather in most areas.

Soybean planting also started slowly this year, but a larger than average portion of the crop was planted before the end of May. For the week ended June 8, 74% of the crop in the 18 major soybean-producing states was rated in either good or excellent condition.  Soybean condition ratings were reported for the 23rd week of the year in 17 of the 28 years from 1986 through 2013. On average, only 62% of the crop was rated in good or excellent condition for that week. The previous record-high rating was 73% in 2010.  Soybean crop condition ratings tend to decline even more than for corn as the growing season progresses and early season ratings are not always a good indicator of the final U.S. average yield.   Recent and upcoming heavy rainfall in some areas will likely begin to be reflected in deteriorating ratings, but yield expectations remain high.

The critical part of the growing season for corn and soybeans is still to come. The record yields of 2004 and 2009 were the result of ample summer rainfall and cooler-than-average summer temperatures. A repeat of those conditions this year could result in an average corn yield above the record yield projected by the USDA.  The 2009 average yield, for example, was 4 bushels above the 2004 average.  A similar jump from 2009 to 2014 would result in an average of 168.7 bushels.  Based on the current projection of harvested acreage, such a yield would produce a crop 286 million bushels larger than currently projected by the USDA.  For soybeans, the 2009 record yield was 0.9 bushels above the previous record of 2005.  A similar jump from 2009 to 2014 would result in an average yield of 44.9 bushels, which is actually 0.3 bushels lower than the current USDA projection.  Based on the current projection of harvested acreage, such a yield would produce a crop about 24 million bushels less than forecast by the USDA.

While it is too early to be confident of U.S. corn and soybean yield potential, the markets are clearly anticipating very large crops, particularly for corn. Prices will likely remain under pressure as long as conditions continue to point to average yields above trend value.

Soybeans bears are talking about the fact old-crop beans have given back $1.00 per bushel since the end of May. The question now that the “roll” from July to August is over for most…what happens next?

With crushers thought to have ample coverage for the next month or perhaps even a bit longer and the cash market not being overly strong, it might be tough for the July contract to gain a ton of upward momentum, especially nearby. Moral of the story, the crushers seem to have beans, the exporters don’t really need the beans and now US DDGS are backing up into the pipeline because of the cancelations and recent ban from China. As a result we may have the occasional knee jerk to the upside, but a massive blow-off top towards $16.00, like so many “tech” traders have been projecting, seems more and more far fetched.

If, and I stress if, we are to get a big bounce higher in old-crop I think it doesn’t come until early to mid-July.   As for new-crop, many players are talking about the possibility of a 10-15% correction from the Spring highs. If you use the $12.79 Spring peak then you can conclude a 10-15% setback would put you in the $10.85 to $11.50 range. My point is, don’t be oblivious to the fact we could still perhaps shave another $0.75 to $1.50 off new-crop prices before seeing any type of real sustained upside turnaround or major bounce back towards higher ground.

By: Ryan Stucke – Mercer Landmark Agronomist

There has been a lot of talk over the last 2-3 years about fungicides within the agricultural industry and whether or not a farmer should use them.  If you are a dairy farmer this is a must on all of your silage corn no matter what the variety is or what company it comes from.  Protecting your corn early on with a V4-V8 application will give you better stand ability and better overall plant health which in return will ultimately lead to more tons come harvest.  The prime time for early application is V5-V6 growth period, this is when the number of kernel rows per ear is being set and any stress at this time can greatly reduce yield.

Now you may ask with all of the fungicides on the market which is the best one to use to help me protect my silage corn?  With the early application you are going to want to have all of the new leafs that come out after that application be protected as well, therefore I would use a xylem mobile fungicide called Aproach from DuPont.  What xylem mobile means is once the product hits the leaf it just doesn’t protect where it lands or the whole leaf itself, it gets into the plant and protects everything there at that time and everything that will come after it up until tassel.  Think of it like going to the doctor and receiving a shot, you don’t want just your arm protected, you want your whole body protected and that is how a xylem mobile fungicide works is by protecting the entire plant and not just where the chemistry lands.

Here is an example from Paulding County how the Aproach works.  This is a split field of silage corn with the same variety and same soil across the whole field.  Now tell me, which one would you rather chop?  The treated half did 2-4 tons higher on yield in the fall and was standing much better with much less disease.

The USDA will release its quarterly Grain Stocks and Acreage reports on June 30.  These reports provide important fundamental information that will set the tone for the corn market going into the critical stage of the growing season. There is always opportunity for surprises in these reports and there is particular interest in the estimates this year given the $0.70 decline in corn prices over the past month.

The stocks report will provide an estimate of the inventory of corn on June 1, revealing the pace of feed and residual use during the previous quarter and providing for a clearer expectation of the magnitude of stocks at the end of the 2013-14 marketing year. Given the difficulty of anticipating the magnitude of quarterly feed and residual use revealed in the report, it is useful to calculate the magnitude of the stocks estimate that would be considered neutral for prices.  That calculation is based on the magnitude of use in other consumption categories during the March-May quarter, the USDA’s forecast of feed and residual use for the year, and revealed feed and residual use use during the first half of the marketing year.  Quarterly estimates of corn use in non-feed and residual categories (ethanol production, other processing uses, and exports) can be reasonably estimated based on monthly and weekly reports of use during the quarter. Based on monthly and weekly estimates from the U.S. Energy Information Administration, ethanol production during the March-May quarter this year exceeded that of last year by 7.8 percent.  Assuming corn consumption increased by the same amount, corn use during the quarter should have totaled about 1.286 billion bushels. As a side note, to reach the projection for the entire year, ethanol production during the last quarter of the year needs to average about 37.84 million gallons per week.  Production during the most recent 4-week period averaged about 39 million gallons per week.  The production rate may slow somewhat due to some build-up of stocks, but it appears that ethanol production, and therefore corn consumption, will reach or slightly exceed the current forecast.

Estimates of corn consumption for other domestic processing uses are not readily available, but quarterly use is very consistent from year to year.  Based on the USDA’s projection of use for the year and use during the first half of the current year, use during the March-May quarter should have been near 375 million bushels.

Estimates of corn exports are available in weekly USDA reports and monthly Census Bureau reports.  Census estimates become the official estimates in the USDA corn balance sheet, but are currently available only through April.  Cumulative Census export estimates through April exceeded USDA estimates by 26 million bushels.  Assuming that margin persisted through May, USDA export estimates suggest that exports for the March-May quarter totaled 619 million bushels, equal to the record exports for the quarter in 1981.  To reach the USDA projection of 1.9 billion bushels for the year, exports will need to average 41 million bushels per week during the final quarter of the marketing year. The most recent 5-week average for corn export inspections was 43.9 million bushels.

For the year, the USDA projects feed and residual use of corn at 5.3 billion bushels.  Use during the first half of the year, as revealed in the previous quarterly stocks reports, totaled 3.859 billion bushels.  To reach the USDA projection, use during the last half of the year will need to total 1.441 billion bushels.  Use will be larger in the third quarter and much smaller in the fourth quarter, although the portion of use during the two quarters has varied considerably.  Use during the March-May quarter this year might have been near one billion bushels if use is tracking the USDA projection.

With March 1 stocks of 7.006 billion bushels, quarterly imports of about 6 million bushels, and quarterly consumption near 3.28 billion bushels, June 1 stocks would have totaled 3.732 billion bushels.  An estimate near that level would be considered neutral for old crop corn prices.  Recent history, however, suggests that the actual estimate could deviate enough from the expected level to generate a price response.

The USDA’s March Prospective Plantings report revealed U.S. producer intentions to plant 91.691 million acres of corn this year, 3.674 million fewer acres than planted in 2013.  When that report was released, there was some speculation that corn acreage would exceed intentions based on what appeared to be an under-count of total crop acres in the report. A late planting season in northern growing areas and a late season increase in the ratio of soybean to corn prices, however, suggest that both soybean acreage and prevented plantings might exceed intentions in those areas, resulting in fewer corn acres than intended.  While the June report of acreage will include intentions for unplanted acreage, the estimate of corn acreage should be near actual acreage to be revealed later in the year.  Unless acreage deviates substantially from intentions, corn production expectations will continue to reflect weather conditions and yield expectations.  Current corn crop conditions have the market expecting a U.S average yield at or above trend value.