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 May, 2017

Market Report
Wednesday May 31st, 2017

July corn closed up 5 at $3.72 and December 17 corn closed up 5 ¼ at $3.91. July beans closed up 3 ¼ at $9.16 and November 17 closed down 1 ½ at $9.18 ¼. July wheat closed down ¼ at $4.29 ¼ and September 17 closed down ¼ at $4.43 ¾. Crude oil down $.14 at $48.56.

The corn market featured some rare excitement today, leaving Tuesday’s close overnight and never really revisiting those levels. A mid-day attempt to turn the bounce into “something more” struggled to hold, but corn still managed to close $.05 higher on the day. The funds were viewed net buyers today putting them close to 200,000 contracts short. No doubt the surprisingly poor start to the year in Tuesday afternoon’s corn conditions report helped get the market started. The first glance at the crop found 65% of the US corn crop started the year in “Good to Excellent” condition, which is down from last year’s 72% G-E start, and was worse than trade expectations for 68-70% G-E. Given that there are also roughly 7.5 million unplanted acres (not including replant), this did not sit well with weaker shorts in the market. The short-run weather picture is actually decent – dry and slightly warmer than it has been – though it remains to be seen whether some of the really wet spots was able to dry off in time to see progress.

Soybeans posted their first higher close in 6 sessions with support from a bounce in the spreads as the market tries to stabilize its slide. The break on the board has tended to firm basis in many markets and that helped the spread firm back out of new lows established yesterday. The soybean daily charts are approaching their next downside objective on a near term basis with the $9.00 area being the target for both old and new crop beans. On a longer term basis the charts suggest additional downside potential with the weekly chart breaking down support last week and today the monthly chart also stuck an outside month lower. After a stretch of drier conditions for much of the corn belt in recent days and for early this week, rains will return later in the week with the heaviest totals forecast east of the Mississippi over the weekend.

The wheat complex finished the day mixed with once again protein concerns leading the wheat trade. Today was maybe a friendly reminder that with harvest picking up steam in the southern parts of the hard wheat belt, it will make it tough for the HRW and SRW markets to sustain any inner day strength. There were a couple positive influences Tuesday, with Egypt back in for wheat and overall wheat conditions down 2% from a week ago. However, by the morning break, any thoughts of the US winning some business in the GASC tender quickly faded once the offers were released. With the US pricing themselves out, it offsets any of the positives influences gained by the conditions report Tuesday afternoon. The strength in the corn market tried to keep the wheat markets bid, but as corn slipped off its highs, the wheat rally quickly fizzled.

Anna Kaverman

anna@mercerlandmark.com

Market Report
Tuesday May 30th, 2017

July corn closed down 7 ¼ at $3.67 and December 17 corn closed down 6 ¾ at $3.85 ¾. July beans closed down 13 ¾ at $9.12 ¾ and November 17 closed down 9 ½ at $9.19 ¾. July wheat closed down 8 ¾ at $4.29 ½ and September 17 closed down 7 ¼ at $4.44. Crude oil down $.14 at $49.91.

Shorts who exited the market ahead of the long weekend apparently wanted back in once the “all-clear” was sounded Tuesday. Futures made their lows early, but never really attempted a serious recovery effort intraday. The funds were viewed net sellers of 15,000 corn, which would take them back over 200,000 net shorts heading into Wednesday. In a broad sense, Midwest weather played out better-than-expected over the holiday weekend, as rains were more erratic than feared and took a welcome southerly turn in some cases. Temps still lean cooler-than-usual, but are expected to be more “seasonable” in the days ahead. 6-10 & 8-14 day maps are not quite as wet as they have been, which is welcome at this juncture. The first look at national corn condition ratings found just 65% of the crop in “Good-Excellent” shape.  This compares to last year’s 72% G-E start.  Notable declines were seen in Indiana (43% G-E vs. 69% last year), Illinois (52% G-E vs. 71% last year), and Wisconsin (61% G-E vs. 85% last year).  All in all, the market was looking for a G-E rating closer to 68-70%, so the results were clearly worse than expected. 91% of the crop was planted, which was close to expected.  This would imply 7.5 million acres left to go (not counting necessary re-plantings).  There are roughly 1 million acres left in IN, KS, and WI.

Soybeans extended their slide to fresh lows led by weakness up front in the old crop new crop spread despite a fresh old crop export sales announcement. July soybeans point to a $9.00 near term objective area which is not that far off and charts are now oversold – note there is additional downside potential on the weekly. Soybean planting progress came in at 67% vs. 66% avg. for this date and expectations of 65-70%.  The states trailing the 5 yr. avg. the most are IL (-9%), IN (-17%), MI (-12%), OH (-17%) and WI (-21%). Keep in mind acres in need of replanting are not reflected in the above numbers. The states struggling with slow emergence closely resembles the above states as well.  Overall no surprises and the data reflects the struggles some states are having this planting season. Elsewhere in the news, the USDA flashed 130 MT of beans sold to unknown.  Weekly inspections totaled 336 MT which was just a shade below expectations and compares to 354 MT last week.

Overnight price action across the wheat complex was slightly lower, but the selling intensified during the day as talk of harvest picking up steam in the southern parts of the hard wheat belt made its way through trade. Reports still have strong yields and poor protein. We have to remember last year’s crop was low protein as well, and if this year’s crop stays the course it is on, blending any high protein wheat just to make specs on previous sales will be hard to come by. Looking ahead to tomorrow, there are a couple of positive influences, with Egypt back in for wheat. Maybe the US can win some business again and add to the positive tone. Overall wheat conditions were a bit of a surprise, coming in down 2% from a week ago at 50% Good/excellent.

Anna Kaverman

anna@mercerlandmark.com

By~ Josh Henderson

The wet conditions we continue to encounter have made pre-emergence and early post-emergence herbicide timing difficult. It has also caused us to change the herbicides we are applying due to crops emerging.

While crusting has seemed to halt or set back growth on some of our crops, it hasn’t seemed to hinder weed growth. Depending on a glyphosate product alone to clean up emerged broadleaf weeds may seem enticing, but can also be setting yourself up for weed escapes. A good residual should no longer be looked at as a luxury or added cost, but instead as a necessity. A good residual program is the best way to prevent running weeds through the combine come harvest.

Choose the correct spray tips and adjuvants for the crop protection products used will ensure that they are working to its full ability. Increasing your spray volume will give you better coverage and can be vital for the efficacy in certain chemistries.

Be safe and contact your Mercer Landmark yield specialist with finding the solutions that best suits your fields.

Market Report
Thursday May 25th, 2017

July corn closed down 2 at $3.69 ¼ and December 17 corn closed down 2 ¼ at $3.87 ½. July beans closed down 8 ¾ at $9.39 ½ and November 17 closed down 8 ¾ at $9.39 ¼. July wheat closed down 1 ¾ at $4.30 ¾ and September 17 closed down 1 ¾ at $4.44 ¼. Crude oil down $2.45 at $49.14.

More of the same quiet trade today in corn, though today’s action featured a touch more volatility. Futures spent most of the early-going trading a touch higher, but ended up getting dragged down by a new low in the bean market. Volumes remain quiet, and head counts will likely be significantly less tomorrow ahead of the three day holiday weekend. The funds were believed to be small net sellers of 5,000 contracts today, which would put them 210,000 contract net short in corn. A poor weekly export sales report put corn traders in a bad mood to start the day. Net new sales of 457,200 MT were 33% below the four week average, and not that far away from the marketing year low made two weeks ago. Japan accounted for half the sales, and small cargos were shipped to Mexico, Taiwan, Korea, and featured a rare appearance by Bangladesh.

July soybeans dropped to a new 13-month low with an outside day lower after we were unable to hold modest overnight strength in flat price and the bull spread. Planting concerns persist although forecasts today suggested a better drying opportunity for the upper and western belt in the 5 day outlook and for most of the corn belt in the 6-10 day outlook. Perhaps more relevant to today’s price action though was news of the Chinese cancellations of US imports. Chinese news wires reported that importers resold 3-4 cargoes and cancelled 5-7 cargoes of US soybean purchases for May and June due to negative crush margins. On last week’s flush of the Brazilian real which led to heavy cash sales by the farmer down there the importers replaced the US beans for later shipping dates of Brazilian beans. Soybean export sales today were within expectations totaling 479 MT which is up 33% from last week and up 9% from the 4-week average.  The featured buyers were unknown with 149 MT and 130 MT to China of which 66 MT were moved over from previously announced sales.

Protein concerns continue to be the buzz around the wheat complex. Weather also has been getting more attention, as cool and wet conditions continues to persist over the belt. If nothing else, this has been supportive to trade on breaks. Export sales this morning were solid once again, and one thing to point out about the report. The Egyptian business from last week did not show up on the report. Export lineup going into the three day Holiday weekend is limited, so the focus will continue to revolve around wheat conditions, protein levels and weather.  Export sales this morning were in line with expectations, coming in at 202 MT for old crop, with an additional 343 MT of new crop sales for a combined total of 545 MT.

Anna Kaverman

anna@mercerlandmark.com

Market Report
Wednesday May 24th, 2017

July corn closed up 1 ¾ at $3.71 ¼ and December 17 corn closed up 2 at $3.89 ¾. July beans closed unchanged at $9.48 ¼ and November 17 closed down ½ at $9.48. July wheat closed up 3 at $4.32 ½ and September 17 closed up 2 at $4.46. Crude oil down $.13 at $51.59.

The corn market remains nothing if not choppy, battling back from Tuesday’s break to close two cents higher. Volumes were poor in a tight three cent intraday trading range. The funds were believed small net buyers of the day, as they hang with a near 200,000 contract net short in corn. The government finally gave ethanol some good news for once. Production slipped -1.7% to 1.01 mil bbl/day as we expected. Inventory featured a welcome -3.1% draw to 953 million gallons. The markets rewarded ethanol with a penny plus bounce today, which may have helped put more producers in the “breakeven” column. Weekly export sales report tomorrow could offer some good news for corn.  Net new sales could tickle 1 MMT for the first time in seven weeks. This would be quite welcome, as tender activity has been quite low, as many buyers await South American supplies. World weather remains a bearish anchor on the markets, with excellent finishing weather noted in Brazil.

The soybean trade was two-sided today and while the market managed an unchanged close in the old crop and a slightly lower finish in the new crop. The feature was the flat price bounce off of a test of the lows one more time and showing some resiliency for a moment. It was another very light volume session with limited inputs to keep the trade engaged.  Keep in mind we are heading into a 3-day weekend where weather forecasts can have an influence on the market with some power one way or another on Monday evening’s opening so both the bull and the bear have a reason for some caution and that also was reflected in today’s indecisive choppy action. The Brazilian real continues to have an influence as overnight weakness and a morning reversal higher appeared to lead the soybean market action with perhaps a bigger influence than normal in a market that has little other fresh inputs fundamentally.  The dollar slipped lower late in the session after the Fed meeting minutes and also provided a touch of support into the close.

The wheat markets battled both sides of unchanged overnight and during the early part of the day, but trade over the latter half of the session was mostly higher. Today was a very light volume trading session across the entire grain complex, not too surprising as there was not a lot of fresh news to talk about over the past 24 hours. Much of the talk today revolved around wheat conditions, protein levels and weather. Looking ahead to tomorrow, we have export sales in the morning. Last week saw a strong week, with sales coming in at 248 MT for old crop, with an additional 393 MT of new crop sales for a combined total of 641 MT. Expectations tomorrow are for sales in old crop to come in between 0 and 200 MT and new crop between 250 and 450 MT.

Anna Kaverman

anna@mererlandmark.com

By~ Ryan Edwards

With the recent amounts of rainfall and cool wet mornings many farmers have been looking at their wheat and deciding if a foliar fungicide treatment would be their best option in protecting the wheat crop. The fungicide will not necessarily increase yields but will protect the potential yields in the field. Walking the wheat it has been noted that there is powdery mildew and some rust beginning to develop. Coupling this with the potential for fusarium head blight this year it may be advantageous to consider applying a foliar fungicide to your wheat crop either by air or by ground to provide another 14 to 21 days of protection. While harvest restrictions are around 30 days for many of the wheat fungicides there is still time to consider application and much of the wheat has headed (Feekes 10.5) out with only a small percentage beginning the pollination phase. At this point protecting the flag leaf with a triazole from any further degradation with some rain still in the forecast can still net a 7 to 11% yield increase versus not treating from historical yield data. Also consider an application of insecticide tank mixed as well with the mild winter to control insects such as armyworm from feeding on your wheat crop. See your local Mercer Landmark agronomy team to discuss a plan in getting your wheat crop treated.

By~ Steve Heckler

Following the mild winter, overwintering survival of pests like flea beetle, bean leaf beetle, and stink bug will be higher than normal. We also had higher than normal catches of black cutworm and armyworm moths in the state. This should cause us all to pay close attention to signs of insect damage. Pay close attention to cover crop fields and no-till fields that had a lot of green vegetation.

Alfalfa fields are going to need to be closely monitored for potatoe leaf hopper and weevil this year. If you are seeing insect damage and are unsure of the insect or the management steps, please contact your Mercer Landmark Agronomist.

I pray that everyone has a SAFE spring doing farm work and servicing the farmers.

By~ Brian Mitchem

Very warm and dry conditions across most of the area have launched the 2017 planting season for most farms. Planting into moist soils with warm soil temps allow for the crop to get off to a strong start.

The germination process in seed starts with the seed being exposed to moisture. This starts a cavalcade of hormonal changes that moves the seed from storage to growth. The initial moisture that the seed imbibes rushes through the outer membranes of the seed at a very fast speed. If the initial water is warm, the process tends to go very smooth. If the initial water is cold the seed can be exposed to stresses that cause damage to the membranes and cells of the seed. The cell contents can leak out of the seed and invite seedling disease pathogens.

Once the seed has taken in 50-55% of its weight in moisture the germ process begins. Once the process starts in a seed it can not be stopped. If moisture were a limiting factor and the seed has the process interrupted due to lack of moisture the seed will not survive. In our area adequate soil moisture at planting is very rarely an issue.

Seed tags list warm germ scores, not cold germ. It is common to see individual lots of seed that have excellent warm germ scores but relatively low cold germ scores. This does not make the seed a risk to plant if conditions are good but can pose risk if conditions are poor.

My advice is to have seed lots sent to an independent seed testing lab to perform a cold germ test to determine if any seed lot is at risk. If a lot has lower cold scores simply hold until warmer soil conditions exist.

Crop Condition

Wheat – vast majority of the area wheat looks very good and has high yield potential much like 2016. The wheat is relatively short for the growth stage with most fields having flag leaf present.

Low levels of powdery mildew can be found in the lower canopy in some fields. Low levels of aphids can be found as well. Very heavy early flights of armyworm and black cutworm moths have been measured across the area. The better wheat fields have a high presence of moths. They will mate and lay eggs which have the potential to impact grass crops. We have had heavy flights in the past that did not materialize into a major problem. Diligent scouting of wheat and other grass crops will be needed this spring.

Fall applied herbicide programs look exceptional this spring as opposed to fields that were untreated last fall. The purpose for fall programs is to control several problem weeds that are present in the fall like Chickweed, Dandelion and Marestail plus it allows spring emerged weeds to be very small and easily controllable in the spring.

The picture included shows a field where fall applied Brash® plus a residual herbicide was applied. From the road the field looks perfect but closer inspection shows a very light level of weeds emerging including some annual weeds like lambsquarters. This would be expected with the very moist and very mild temperatures we experienced over the fall and winter since application.

Fall applied programs remain one of the most consistent and profitable herbicide programs made each year. However, fall applied programs do not eliminate the need to include an effective burndown product in the spring along with residual products.