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 July, 2014

By: Kyle Imwalle – Mercer Landmark Agronomist

There are many things to consider when you are planting your late summer alfalfa: What was in the field before, Moisture level, Seed bed conditions, Planting date, Fertility, and Variety.

What was in the field before: Alfalfa plants produce a toxin that can hamper root development of new seedlings. If you are reseeding into a previous alfalfa stand you need to wait for the toxins to degrade. If the previous crop was an alfalfa that was two or more years old waiting two years before planting a new alfalfa field is recommended. If you are reseeding into a failed spring seeding or the previous fall, you can plant immediately. If the field had any other crop you can also plant immediately.

Moisture level: Never plant into a dry soil, alfalfa only needs ½ inch of rain to germinate but seedlings can die from drought in a few days if there is no rain. A weed free field is optimal, use a burn-down herbicide before planting to control perennial weeds and destroy any remaining vegetative growth from the previous crop. Avoid using a cover crop for weed control as the cover crop can out compete the new alfalfa for moisture. If weeds infest your new stand contact your local Mercer agronomist about a post-emergent herbicide plan.

Seed bed conditions: Tillage is important to control perennial weeds, but over-tilling can dry out soil. Soil firmness is critical to ensure proper soil-to-seed contact and preserve soil moisture. A general rule of thumb is if you can’t bounce a ball off of the soil your soil isn’t firm enough. Packing soil before and after planting gives the best results. If you are seeding into stubble, make sure you have good soil-to-seed contact and proper planting depth, ¼ inch and no deeper than ½ inch.

Planting date: Next to dry soil, planting too late is the biggest cause of summer seeding failures. Actual dates will vary based on moisture availability and temperatures. It is crucial to get at least 45 frost-free days of good growing conditions after seeding to build up adequate carbohydrate reserves for winter.

Fertility: Before summer planting, have your soil tested, and follow lime and fertilizer recommendations for phosphorus (P), potassium (K), and sulfur (S). The optimum pH level is 6.8, and liming should occur six to 24 months prior to planting. Maintaining P levels is critical to proper root and seedling development, while K increases yields and stand persistence. Additionally, fields with high available nitrogen levels may delay or prevent the formation of nodules.

Variety: Coated alfalfa seed is often beneficial for late summer seeding as its hydroscopic trait seeks out available moisture to speed germination and overall establishment. Choose varieties that are resistant to all major alfalfa diseases in your area. Seedling diseases are not as important in the late summer seeding as for spring seeding, but major diseases are still key factors for resistance. Finally, selecting varieties with a low winter survival score (more winter hardy) and high resistance to root and crown diseases are your best choice for winter survival.

Location and the other crops in your rotation may limit the success of late summer seeding. In Ohio, seeding may present a challenge due to droughts during this time period. While a late summer seeding have risks, they offer many advantages for establishing a strong, productive alfalfa stand to maximize yield. A fall-seeded crop is more productive during the first growing season than a spring-seeded crop. After the first season, however, yield potential is about the same.

Talk with your local Mercer Landmark Agronomist today about having your soil tested for nutrients and create an herbicide program to help maximize your yield potential.

If I had a dollar lately for every time a producer asked me lately if the markets have bottomed, I would be a semi rich woman. I’ll admit it that for someone who is usually forever optimistic, I have been pretty bearish lately and still am. However, don’t fret too much. As bad as things seem the market maybe still have some life in them. Here’s a handful of reason why.

On Friday, July 11, USDA released its monthly round of Crop Production and WASDE reports. USDA’s forecast for ending stocks of corn was substantially higher than expected, and soybean stocks are mounting as well.  Following the reports, soybean futures extended declines, heading for the longest slump in 41 years. Corn prices fell to a four-year low and have continued the trend. But you already knew that right.

There really was not anything new released in these reports. Back up almost two weeks and on June 30, USDA released its Acreage report, which revised planting intentions. That confirmed soybean acres for this year as historically high, as well as a large corn crop. After that report the market did its job which is to discount the future. That is why grain prices have been on a steady decline. You are probably thinking, I thought you said you were going to give us positive news? I am and here is why there may be still some hope for a price turnaround.

Weather always has the upper hand. July is almost all in the books, but not over and there is still all of August to determine “if” we have a crop or not.  If you remember the USDA did not increase corn or soybeans yields in the July reports, which could indicate the “perfect weather season” forecasters were predicting may not come true.

Additionally, the areas where soybean acres were added to this year have had some significant weather issues. The areas that added another 2.5 million acres, are in areas that probably don’t produce 60- or 70-bu. beans. Some analyst are saying that it will be a stretch to produce 45.5 bu. /acre nationwide on that many of those acres. Plus the return of the “polar vortex” last week may have robbed some areas of much-needed growing degree days.

Another reasons grains could rally is because less acres corn acres than originally predicted are supposed to be harvested. In the most-recent report was that USDA lowered harvested for grain acres by about 400,000. Some of the acres that got planted will be harvested for silage. This may not greatly reduce the total number of bushels harvested, but it will impact it.

A third reason for prices to possibly rally is that demand is still on the rise slowly but surely.  ”Low prices cure low prices”. There could be a bright spot in demand, going forward. One example is with cattle feed. There’s no way ranchers want to feed $7 corn to cows, but now, corn is almost as cheap as hay in some areas.

The fourth and final reason for a possibly rally is that even a dead cat will sometimes bounce. When a price drops from really high, in a short time period, there’s a chance for a short-lived recovery, known as a dead cat bounce. History tells us that you can sometimes expect from the low a 40% to 60% retracement of the full drop in price. The December contract tested $3.70 support level yesterday and held. There was a gap left overnight in December corn between $3.76 ½ to $3.78 and there also is a gap from $4.10 ¼ – $4.14 ½ back on July 7th. Do we get our head of water and see $5 corn again, I don’t know. But the good news about prices falling is that doing nothing and waiting for time to pass is sometimes the best thing to do. That is if you have the gut to stomach it. I personally don’t and if you don’t contact your merchandiser. There are numerous ways from specialty contracts to opening a hedge account that can be used to help you get the most bang for your buck.

By: Amy Battles – Mercer Landmark Agronomist

Soybeans:

Soybeans are quickly approach the R3 stage, which means it is time for fungicide applications. We are seeing a lot of septoria brow spot currently, as well as Japanese beetle and stink bug feeding on the upper leaves. Septoria thrives under moderate temperatures ranging from 60⁰-85⁰F and high moisture. Although we are seeing septoria in all tillage and crop rotations this year, it is most prone to develop in fields that had soybeans in them last year; the disease overwinters in infected soybean straw, produces spores or crop residue during moist conditions, then move to nearby soybean plants infecting the leaves. Initially you will see yellow lower leaves with brown spots on them, eventually causing the leaves to fall off, meaning these nodes will not produce pods. The photo below is from Spencerville, Ohio, the first showing septoria damage on lower leaves, the second showing damage starting to appear on the upper leaves.

Corn:

Some corn fields are coming into the VT-R1 stage where tassels are shedding pollen and silks are emerged. We are seeing quite a bit of leaf disease starting to show up, grey leaf spot being the most common, as well as northern corn leaf blight. Grey leaf spot will start at the lower leaves of the plant and work its way to the upper leaves. According to Purdue University, “Infection occurs during prolonged warm, humid periods. Symptoms are commonly observed following long periods of heavy dew and overcast days and in bottomlands or fields adjacent to woods where humidity will be higher and dew will persist longer in the morning… 6-25% of leaf area affected by GLS by R5 stage can see a yield loss between 2-10%.” Although this doesn’t sound like much, 10% from 200 bu/ac corn will be 20 bushels.
Northern corn leaf blight can show yield losses upwards of 30% if lesions are present prior to or at tasseling. This disease also prefers moderate temperatures similar to those associated with septoria brown spot, and wet/humid conditions. The photo below was taken near Elgin, Ohio showing grey leaf spot where plants were showing an average of 2-3% leaf coverage. Notice the rectangular shape, and that the disease does not go past the leaf margins.

The photo on the below shows Northern corn leaf blight, which goes outside of the leaf margins and looks similar to a cigar.

Talk with your local Mercer Landmark Agronomist today about scouting your fields, and what fungicides are most effective in controlling these yield robbing diseases.

The soybean and corn yield potential rose again sharply this week, with the bearish news piling up in the market. It looks like it will be a record shattering year for yields in the United States, and that is pressuring markets big time.

Corn did manage to close in the plus column yesterday and tried to put an end to the hemorrhaging that has been July thus far. But it understandably was the least enthusiastic. New crop corn has fallen over $1.30 since the May 9th high of $5.14 ¾. It was almost a touch surprising but the corn ratings actually bumped up 1% in the good/excellent category and now stand at 76%. Silking reached 34%, which is 1% ahead of the 5-year average and more than double the 15% last year at this date. It was a little surprising to wake up this morning and feel quite this much chill in the air, the corn market is still suffering little to no stress as we move through pollination. Soon I suspect that topic will turn to lack of growing degree days. If the weather continues its current trend, there is talk inside trade that the USDA will be forced to drastically increase their yield estimate in their August 11th report (a 168-172 bu. yield seems to be most of the debate). This is turn has trade talking about a 14.0 billion bushel plus US corn crop and an ending stocks number north of 2.0 billion bushels. As for price, many technicians seem to believe new-crop DEC14 should start finding some good support in the $3.50 to $3.75.  On the flip side many of the bearish fundamentalist believe as long as wheat prices continue to slide so will corn, possibly all the way down to between $3.10 and $3.35 before it finds more heavy cash demand.  As producers you can’t necessarily battle “price” at this stage of the game, but you can continue battling “production.” It’s going to be vitally important that you take the extra steps and do everything you can to secure the current condition of your crop.  Get with your Mercer Landmark agronomist to find out what’s the biggest bang for your buck (fungicides???) and try to do whatever you can to insure the biggest crop possible. Remember a -30% reduction in price from $5.00 will drop us down to $3.50, but if you can take your field from 150 bushels per acre to 195 bushels per acre, you have essentially offset a majority of the price break (in other words it would be just like selling 150 bushel corn at $5.00).

We continue to see the fallout from the June 30th stocks report with prices seemingly in a free fall. Corn has lost about 50 cents and soybeans are down $1.25. Two of the questions that always come up during a move like this are “Are we near a bottom yet” or “Is the market oversold?” When we talk about a market being oversold, the same logic would apply to a market being overbought. Most of the time, traders or producers talk about markets being oversold based on their perceptions. The market has gone down so fast that it just “feels” like it’s ready for a bounce or rebound. This notion of being oversold is very subjective in that sense. It will vary by market participants.

One of the ways that traders will verify what they are feeling is to monitor certain technical signals when it comes to the markets being overbought or oversold. One of the most popular technical tools is the Relative Strength Index or RSI. If you read my nightly market commentary a lot of time I mention what the RSI is. The RSI is calculated by taking the current price compared to historical prices over a time frame. The RSI is listed on a chart as a value from 1 to 100. Generally speaking, when the RSI get up towards 80, the market is considered overbought and would indicate a sell signal.

There is nothing perfect about these indicators but they can help confirm the way a trader is “feeling” about the market. One reason these indicators can sometimes be unreliable is that they can show an overbought or oversold signal for long periods of time.

In the chart below, you can see that the current RSI is down near the “buy signal” area at 22.5. This corresponds with the big break in new crop corn futures. Again, this is not always a reliable buy signal because the RSI could stay around that 20 area, or go lower for an extended period of time. Also, sometimes fundamental forces are more important that technical signals. Today, the market is in liquidation mode with big trading funds closing long positions and the buy signal might not be as reliable. A better buy signal might be to monitor the RSI and the net fund positions as they get close to even.

By:  Ben Stoller – Mercer Landmark agronomist

The pictures below were taken in two separate Paulding County, OH soybean fields, both about ¼ mile apart on the same road, on June 26.  One was treated with a soil applied residual, one was not.

Residual herbicide

No residual herbicide

The field lacking a residual herbicide has a problem with marestail (horseweed) and has limited options for post control, most of which will likely have variable effectiveness.  Weed scientists from OSU and Purdue indicate best control with a fall residual followed by a spring burndown.

Please contact your Mercer Landmark agronomist to help keep your fields clean from marestail.

As the dust settles after a shocking USDA report the grains were able to find some footing and bounce off the lows.  The Planted Acreage and Quarterly Grain Stocks reports may have now changed the tone in grains for good.  However, after the sharp declines we have seen since the report where do grains go from here?

Soybeans were sharply lower following the USDA Planted Acreage and Quarterly Grain Stocks report.  In the biggest surprise of the report the USDA increased soybean acreage well more than even the highest trade guess.  This now puts soybean acreage at a new record by a long shot.  Old crop soybeans were not spared from the bearish report either as stocks came in well above the trade guess as well.  This all amounted to a sharp drop in soybeans with the hardest hit new crop November soybeans down $1.00 in less than 24 hours.  The report was not as bearish for corn as acreage came in near estimates but stocks were 128 million bushels above the trade guess.  Lower corn acreage still means we will need a very good corn crop this year but larger than expected stocks could mean bigger beginning stocks going into next year and demand may not be as strong as expected.  This takes some of the pressure off and prices reflected that.  Wheat also was not spared from the bearishness as stocks came in as expected but acreage was larger than the trade guess.

So, it was a bearish report (especially for soybeans) and the market reacted to it.  Now that prices have come down where do we go from here?  Corn and wheat already had made big moves lower so the bearish USDA report may have just been the icing on the cake.  At this point US wheat is getting closer to being competitively priced and harvest pressure from the winter wheat crop could be subsiding.  Corn has had good reason to see lower prices and the larger stocks number was a reflection of many analysts suggesting that feed demand was too high.  So much of this could have already been factored into the corn and wheat markets.  The big surprise was soybeans.  Larger than expected old crop stocks take much of the tight balance sheet talk off the table and huge planted acreage figures suggest that we could be swimming in soybeans next year.  However, in the case of corn, soybeans and spring wheat we still have to grow this crop.

Now that the dust has begun to settle from this report the fact remains that the harvest lows this year could now be lower then what we were thinking just days ago.  Corn, wheat and especially soybeans could be looking at bigger ending stocks now.  However, the key to both statements is “could”.  Crops are not made in June and we still need to finish out this growing season and weather will still be key in determining production and prices.  So now that this report is out of the way weather may be the biggest determining factor going forward.

Crops look very good at this point, but we still have to get through the key moisture sensitive reproductive stages in corn and soybeans.  While this report may have added downside potential to grains markets a weather event could change that.  If there are any weather concerns that pop up in future forecasts the market may be quick to build in weather premium.  With the huge soybean acreage soybeans may not be quite as sensitive, but corn needs to see record yield this year and could react sharply to any hint of a weather issue.

All this means that speculators should be looking for opportunities and producers need to look to lock up some prices.

by Kelsey Gee for The Wall Street Journal
Cattle score a point in this latest article that shows how butter is gaining in popularity once again after years when margarine was king. Move over low-fat proponents and pass the steak with a pat of butter on top! It’s not only Cattle score a point in this latest article that shows how butter is gaining in popularity once again after years when margarine was king. Move over low-fat proponents and pass the steak with a pat of butter on top! It’s not only decadent, but healthy, too!
According to the article, “Changing views of nutrition are turning butter into one of the great comeback stories in U.S. food history. Americans this year are expected to eat an average of 5.6 lbs. of butter, according to U.S. government data—nearly 22.5 sticks for every man, woman and child. That translates to 892,000 total tons of butter consumed nationwide, an amount not seen since World War II. Americans in 2013 for the third straight year bought more butter than margarine, spending $2 billion on products from Land O’Lakes Inc., Organic Valley and others, compared with $1.8 billion on spreads and margarines, according to IRI, a market-research firm.”