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 January, 2015

March Corn:

An important and disappointing technical day for the corn market, as key supports were taken out and prices slipped to their lowest levels in three months. Both March and December corn futures finished the session down, each closing below their respective 100-day moving averages for the first time since early November. The market will be very interested in a possible confirmation close below the indicator the next few days, setting up what should be a telling few sessions. Additional support comes in at the early-November lows which held, but will surely be tested again soon. If these lows are taken out, look for a further technical washout with momentum now fully in the bear’s corner.

March Beans:

Beans, on the other hand, have had a back-and-forth session past few sessions, with the market struggling to find a direction. Prices slipped into the close in sympathy with the sell-off in grains, but still managed to close above key support and close to unchanged. The March contract remains in a deeply oversold territory, indicating the recent sell-off may have been excessive and a correction could be looming. However, the failure of the market to maintain Monday’s gains indicates there aren’t a lot of new willing buyers to jump into bean length. The major moving averages are turning over in both the March and November contacts, with two bearish death cross indications this month alone. Continued support at the old lows with resistance at the combination of the 100 and 20-day moving averages.

I found this chart to be very interesting this morning. Thank you for your insight and sharing Allen Douglas.

March Corn Chart: Climbing a wall of worry? Repeat: You might need to be a little creative to see this… but do we have the start of a very ugly head and shoulders working here? Hang with me here… we have lows on Nov 19 / 20 at 375 ¼ and 375 ¾. We then take 25 trade sessions to get us a short, stubby head with no neck – and in half the time, 1 sessions, we are back down to back to back 376 lows on Jan 14 / 15. To firm up here – CH needs to take out the 388 level, the high of the previous 2 sessions. If CH can accomplish this, we should see a good bit of resistance in the 396 to 407 strip… 100 day MA of 377 ½ provides support. We have additional support at the 375 ¼ low from 11/20, and 371 ½ – the low from 11/5. This range strongly resembles the long sideways trade the market saw from late July to mid-August. Sell CH on a stop under 376.

March Corn Chart:

By: Amy Hayes -Mercer Landmark High Yield Specialist

Sudden Death Syndrome has contributed an annual yield loss of over $540,000,000.00/year throughout the United States since 2009 and is continuing to rise. It is the 4th yield robbing pest when it comes to soybeans, following soybean cyst nematode (#1), seedling diseases (#2), and charcoal rot (#3).

SDS is a soil-borne pathogen, meaning once it is present in a field it can easily be spread with soil movement. Sudden death syndrome is persistent in ALL soil types, and overwinters on corn, making traditional rotational practices less effective. The infection can occur at any time, however the first noticeable symptoms of sudden death syndrome occur at the R2 growth stage. When there are visual symptoms present, yield loss can exceed 70%, however even when there are no visual symptoms of sudden death syndrome, root rot can still cause a 20-30% yield loss. Currently our only fight against SDS is selecting resistant soybean varieties and reducing compaction.

On the bright side – help is soon on the way! Bayer CropScience has developed a new seed treatment, ILeVO – the only solution for sudden death syndrome on the market that has activity against nematodes. Based on the last 3 years of testing throughout the United States, Bayer research is showing a 2 bu/ac average yield increase when there are NO foliar symptoms of SDS present, and 4-10 bu/ac yield increase when SDS symptoms were present depending on the level of infection.

The photo below is showing yield differences between soybeans treated with and without ILeVO, as well as comparing SDS tolerant vs. Susceptible soybean varieties.

Look for additional information about ILeVO seed treatment coming soon! This is a very exciting product that could drastically increase your soybean profitability. Talk with your local Mercer Landmark Agronomist today about testing ILeVO on your farm.

BY: Ben Stoller – Mercer Landmark Agronomist

Mercer Landmark’s 2014 plant health guide is now available!

See how various fungicide, insecticide, seed treatments and growth regulator applications on corn, soybeans and wheat within our geography affected yields and overall plant health versus untreated acres.

Read short testimonials of area growers’ experiences with fungicides and their plans on future use.

Please ask your local Mercer Landmark Agronomy advisor for a guide and see for yourself how different treatments have contributed to local growers’ yield gains and healthier crops.

Now is the best time to plan for giving your crops the best environment and potential to maximize yield and your profits.

The Huebner report from 1-8-2015

As I sit down to write the commentary this morning we are T-Minus 72 ½ hours until the January USDA reports and it would seem that just about everything else becomes a side issue at this point.  I have often lamented the fact that we seem to place an inordinate amount of emphasis on each and every report issued by the USDA but have to admit that this one is a bit more crucial as it will include a quarterly stocks report and theoretically will set the tone and market parameters into the spring.  While there is the possibility of an element of surprise in the production figures, unless the USDA elects to make a big shift in the harvested acreage, that figure I believe is of a lessor concern to what may show up on the grain stock figure, particularly for beans.  If you recall, it was back in October the government surprised us with a cut in the ending stock of beans for the 2013/14 crop year to 92 million bushels market from the previously estimated 130 million which had been around that level for months of reports.  The question is will the usage for the last three-months now appear 40 million bushels stronger than is realistic due to the fact the we needed to refill this depleted pipeline?  We witnessed a similar situation a year ago in corn.  I guess we shall have to wait until Monday to find out.

While they may be taking a back seat to pre-report anticipation, there are other elements that we need to keep track of.  The weekly ethanol production figures did raise a few concerns.  While you cannot call a production of 279 million gallons poor, that was the lowest number recorded since the last week of October.  This still represents around 100 million bushels of corn usage but was 2 ½ % below the 4-week average and 2% below the 10-week average.  Possibly more telling is the fact the ethanol inventories climbed another 32 million gallons and over the past two months have increased 70 million.

Exports sales were released this morning and were solid on beans but for corn and wheat…not so much.  Corn sales came in at 387,700 MT or 15.3 million bushels, which was down 57% from last week, 55% from the 10-week average and set a marketing year low.  Even though that was a shortened week, it was disappointing.  Top purchasers were Mexico with 251.3k MT, Columbia at 63.4k MT and Japan buying 50.1k MT.  Year to date total sales stand at 1.076 billion, which is about 3% behind the same time last year.  Beans in turn posted a surprisingly strong 910,600 MT or 33.5 million bushels.  This figure was up 49% from last week, 39% over the 4-week average but was still 4% below the 10-week average.  I am sure you will be shocked to hear again that China was the top purchasers with 550.1k MT or 60% followed by the Netherlands at 134.4k MT and then unknown destinations at 60k MT.  The wheat demand appeared to have fallen off a cliff this past week as we sold a mere 151,000 MT or 5.5 million bushels.  This figure was down 57% from the previous week, 61% from the 4-week average and like corn, set a marketing year low.  Evidently no one around the world is having problems securing wheat even in face of all the hype about restrictions coming up in Russia.  The top purchasers were the Philippines with 201.4k MT, Iraq buying 50k MT and Japan for 28.3k MT but much of this was offset by cancellations of 116.8k MT by unknown.

Looking out to Monday, we have a couple more surveys released.  Reuters averages have corn production at 14.349 billion, ending stocks at 1.927 billion and December 1st stock of 11.123 billion.  For beans they came up with total production of 3.956 billion, a carryout of 393 and Dec.1 stocks of 2.59 billion.  Wheat ending stocks at an evil 666 and all acreage at 42.56 million.   The other and we believe more important estimate, particularly seeing that we participate in it, was conducted and released by the Wall Street Journal.  Here we find an average corn production estimate of 14.366 billion with and average yield at 173.5. Carryout at 1.94 billion and December 1st stocks at 11.161 billion. For beans the average estimate for production came in at 3.965 billion with a yield of 47.7.  Projected carryout at 402 million and a December 1st inventory of 2.608 billion.  Wheat ending stocks are estimated to be 663 million.

I suspect we will look at choppy, generally range bound trade between now and Monday.

By: Brad Miller

2 questions I get asked when meeting with growers this winter is how they can maximize their profits with the reduced commodity prices and what should they  spray this spring for control of Marestail  since very little fall spraying was done.   1 way to maximize the return on investment is with fungicide on soybeans.  Mercer Landmark had 20 Side X Sides out in Van Wert, Mercer and Paulding Counties and the areas treated with fungicide avg 4.9 bu more per acre on average than the untreated area.  So at $10/bu beans, after taking out the cost of the fungicide, you are adding approx. $26.00/ac to your bottom line.  To control Marestail in the spring Ohio State recommends using a residual such as metribuzin, Valor XLT, Sonic, Boundary or the Authority products with  your 2,4-D and Glyphosate.  For more information contact your Local Mercer Landmark representative.

For those not keeping track, this is the 12th and final day of Christmas but the first full week trading for 2015 and it’s, a very cold one at that.  Today the markets saw a solid rebound across the grain and soy complex and while the reasons given for the bounce are varied, I have to believe realistically this is little more than a reaction to harsh selloff we experienced last week.

The two most positive elements that were felt today are the cold temperatures across the Northern Hemisphere and a few dry spots showing up in Brazil but I do not believe we will see much traction from either.  Thankfully we did see snow cover arrive before temperatures took a nosedive and the overall weather outlook for South American remains favorable for good crop development.

We should begin to see the volume of trade pick up gradually over the next few days as everyone returns to their offices but the limiting factor will likely be the impending USDA final crop report due next Monday.  This report could realistically set the tone for the market through at least the first quarter and possibly the first half of the year.

Things are not quite as positive in all commodity markets though as crude oil is under pressure again this morning with spot futures zeroing in on the $50 mark. So far the corn market has been somewhat impervious to the trade in energies as good margins have kept ethanol production strong but one has to wonder for how long?  It was not too many years ago that the general sentiment was the corn market would be regarded more as an energy market than a feedstuff but thankfully that has not been the case recently.  Also this morning we have the U.S. Dollar racing into higher highs, equity markets lower and metals higher.

Technically we did suffered damage last week and could see two to three days of corrective action to balance some of this and there will be fund rebalancing later this week but unless we find a story that the bulls can really sink their teeth into, extended strength could be a challenge.  The biggest uncertainty that we have right now would appear what the reports on the 12th will have to tell us.