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DTN Feeder Pig Index


13:28:00
03/20/2017

DTN Midday Grain Comments 03/23 11:15


11:47:00
03/23/2017
DTN Midday Grain Comments 03/23 11:15 Grains Trending Lower at Midday Trade is slightly lower at midday. By David Fiala DTN Contributing Analyst General Comments The U.S. stock market indices are higher with the Dow futures up 70 points. The interest rate products are lower. The dollar index is 15 points higher. Energies are lower with crude down $0.30. Livestock trade is lower. Precious metals are mixed with gold down $6.10. CORN Corn trade is flat to 2 cents lower in quiet midday trade with the market continuing to chop around range bound. The weekly ethanol production report showed production off 0.10%, and stocks were down 0.75%, and gasoline demand was down 0.58% with ethanol futures edging slightly lower today. Corn basis is expected to remain steady with bushels moving ahead of spring fieldwork, although the incoming rain could turn focus back to corn movement. South America does not have any major weather issues for corn in the near term picture with early double-crop corn progress continuing to move along. The chart picture remains negative in the short term with trade testing the low end of the range. The weekly export sales were strong at 1.35 million metric tons of old crop and 127,100 of new crop. On the May chart support nearby support is the overnight low at $3.57 then the $3.52 late December low. Resistance is the 10-day at $3.62, then the 200-day at $3.68 1/2. SOYBEANS Soybean trade is 2 to 5 cents lower at midday with trade looking to retest the lower end of the range. Meal is $1.50 to $2.50 lower and oil 15 to 25 points higher. South America looks to continue normal progress in the near term with any weather issues limited. Crush margins will need to improve to drive basis improvement as the export program slows seasonally with oil holding up better than meal in this week. The strength in the Real has supported US export competitiveness, which should limit near term downside despite rising production estimates from Brazil. The weekly export sales were strong at 738,200 metric tons of old crop, 79,900 of new, 134,300 of old crop meal, 26,100 of new meal, and 15,300 of oil. On the May soybean chart support is at the $9.92 low printed on last week, resistance is at the 10-day and lowest major moving average at $10.02. WHEAT Wheat trade is mixed at midday with Minneapolis showing the most strength while the heavier rain seems to have shifted out of western Kansas for the near term. New lows have been made in Kansas City trade by another 2 cents this morning. The recent warmer weather has stressed the crop on the Plains but concerns are limited at the moment with the rains expected to limit damage. The dollar remains below the 100 mark on the index this morning, which is supportive. The weekly export sales were OK at 418,500 metric tons of old crop, and 149,800 of new. The protein spreads are favoring Minneapolis trade overnight. On the May Kansas City contract support is the recent low at $4.29, with resistance the 100-day at $4.43. David Fiala is a DTN contributing analyst and the President of FuturesOne and a registered adviser. He can be reached at dfiala@futuresone.com Follow Fiala on Twitter @davidfiala (ES) Copyright 2017 DTN/The Progressive Farmer. All rights reserved.

DTN Midday Livestock Comments 03/23 12:01


12:33:00
03/23/2017
DTN Midday Livestock Comments 03/23 12:01 Cattle Futures Pull Back From Previous Gains Strong triple-digit losses have quickly developed in lean hog trade Thursday morning. The concern that additional pressure will develop in pork values and cash markets could lead to further losses late in the week. By Rick Kment DTN Analyst GENERAL COMMENTS: Moderate to strong pressure is seen through the entire livestock market as cattle traders try to adjust positions following the strong growth seen over the last couple of weeks. Hog markets on the other hand are focusing more on fundamental pressure with most contracts holding triple-digit losses at midday. Corn prices are lower in light trade. May corn futures are 1 cent lower. Stock markets are higher in light trade. The Dow Jones is 80 points higher while Nasdaq is up 15 points. LIVE CATTLE: Live cattle futures have quickly pulled back from the trend of posting triple-digit gains. Even though markets are lower, the firmer market trend still is holding as traders appear to be taking positions. This has limited selling to 50 to 70 cents per cwt through most of the morning as current market prices are likely to hold through the end of the session. Cash cattle activity remains sluggish early Thursday morning with bids of $212 to $215 redeveloping in the North. So far, trade is undeveloped with feedlot managers holding firm to asking prices. This could push trade into the day Friday. Asking prices remain at $132 and higher in the South and $217 to $218 in the North even with the moderate pullback in futures trade. Beef cut-outs at midday are mixed, $0.75 higher (select) and down $1.00 per cwt (choice) with active movement of 103 total loads reported (54 loads of choice cuts, 29 loads of select cuts, 4 loads of trimmings, 15 loads of ground beef). FEEDER CATTLE: Moderate pressure has quickly developed through feeder cattle futures Thursday morning. The pullback in trader activity is more focused on the desired need for a market correction following the rocket-like trend the feeder cattle chart has taken over the last two weeks than any change in market fundamentals. March futures remain lightly trade and holds a narrow loss, while the rest of the complex is trading 20 to 80 cents lower. LEAN HOGS: Nearby lean hog futures appear to be testing support levels following the latest round of market pressure seen Thursday morning. May through April 2018 contracts are holding triple-digit losses with traders focusing on recent pressure in cash markets while pork values continue to erode. The aggressive availability of pork on the market may continue to limit overall market support in all areas of the complex, and could lead to further market pressure. April contracts remain lightly traded with losses contained to 25 cents per cwt. But June futures are posting a $1.47 per cwt loss, trading at $74.27 per cwt. This has broken through the December 2016 low, and could spark additional losses if markets close at this level. Cash prices are unavailable on the National Direct morning cash hog report. Cash prices are unavailable on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 184 loads selling with prices falling $1.21 per cwt. Lean hog index for 3/21 is at $71.41 down $0.07 with a projected two-day index of $71.29 down $0.12. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2017 DTN/The Progressive Farmer. All rights reserved.

DTN Closing Grain Comments 03/23 13:54


14:26:00
03/23/2017
DTN Closing Grain Comments 03/23 13:54 Headline Row Crops March to New Lows May corn posted its lowest close in 2017 while May soybeans fell to its lowest close in five months as grain prices continue to suffer under the weight of favorable crop and harvest weather. May K.C. wheat fell to its lowest close in 11 weeks with rain headed toward the southwestern U.S. Plains.

DTN Chart Technical Points 03/23 16:30


16:30:00
03/23/2017
DTN Chart Technical Points 03/23 16:30 DTN FUTURES 10 3/23/17 SLOW STOCHASTIC PRICES ARE DECIMAL MOVING AVERAGES RSI'S 5 Day 20 Day CONTRACT CLOSE 4-Day 9-Day 18-Day 45-Day 9Day 14Day 30Day %K %D %K %D CBTWT MAY 421.00 425.00 429.92 440.15 444.57 25.99 33.78 42.98 8 15 7 11 CBTWT JUL 436.00 440.31 445.19 455.25 458.77 25.76 33.60 42.98 9 17 8 12 KC WT MAY 428.00 436.00 442.22 455.18 458.00 25.04 32.00 41.78 5 19 11 16 KC WT JUL 440.75 448.25 454.25 467.03 469.76 25.28 32.19 41.95 6 20 11 16 MN WT MAY 540.75 541.25 540.69 542.90 551.63 46.01 45.62 47.76 22 43 43 40 MN WT JUL 547.00 546.94 546.67 549.28 555.63 46.15 45.97 48.35 22 41 40 37 CORN MAY 356.75 360.06 362.28 368.58 372.42 28.49 34.46 43.18 7 22 10 14 CORN JUL 364.50 367.75 369.86 375.97 379.56 28.72 34.68 43.38 8 24 10 15 CORN SEP 372.00 375.19 377.00 382.69 385.88 29.49 35.17 43.62 9 26 12 16 OATS MAY 248.00 251.00 251.14 247.06 248.20 48.17 50.02 52.87 42 47 68 71 OATS JUL 237.75 240.75 242.50 240.17 243.54 42.66 45.23 49.31 29 31 51 60 BEANS MAY 991.00 997.94 999.611014.471036.92 24.86 31.57 41.31 28 39 10 10 BEANS JUL1001.501008.251009.691024.011045.43 25.37 31.91 41.59 30 41 10 11 BEANS AUG1003.751010.191011.111024.851044.23 26.83 32.87 42.10 34 45 11 11 S MEAL MAY 320.70 324.15 326.72 329.85 337.52 22.67 30.65 42.61 10 18 6 9 S MEAL JUL 324.00 327.53 330.09 333.09 340.28 22.49 30.52 42.69 12 18 6 9 B OIL MAY 33.22 33.16 32.65 33.24 33.88 52.45 48.42 45.85 78 80 41 28 B OIL JUL 33.48 33.42 32.92 33.51 34.13 52.30 48.35 45.89 78 81 41 28 CATTLE APR 121.78 120.76 119.26 117.88 116.60 71.32 67.11 61.22 86 87 91 87 CATTLE JUN 112.80 111.86 109.97 108.39 106.91 73.48 69.77 63.65 87 91 93 91 FEEDER MAR 133.70 132.79 130.97 127.89 126.20 80.57 73.36 62.67 77 84 92 94 FEEDER APR 135.35 134.19 131.46 127.53 125.98 78.22 72.92 63.83 81 84 92 93 HOGS APR 69.35 68.54 69.36 68.62 69.12 54.14 52.51 52.66 30 20 48 56 HOGS MAY 73.95 73.23 74.03 73.73 74.07 51.63 50.61 51.67 37 18 35 46 COTTON MAY 77.27 77.19 77.49 77.60 76.63 48.71 51.36 54.65 21 26 49 57 COTTON JUL 78.48 78.40 78.58 78.63 77.49 50.66 53.27 56.47 21 29 55 62 RICE MAY 9.85 9.81 9.81 9.71 9.78 58.33 55.41 50.45 45 55 75 78 RICE JUL 10.10 10.07 10.06 9.97 10.02 58.65 55.81 50.95 44 54 75 78

DTN Closing Livestock Comment 03/23 16:03


16:34:00
03/23/2017
DTN Closing Livestock Comment 03/23 16:03 Lean Hog Futures Unleash Bullish Reversal After trading lower through most of the session, lean hog contracts abruptly reversed to close with triple-digit gains. The cattle complex settled moderately lower, trimmed by profit-taking and the general lack of cash news.

DTN Early Word Grains 03/24 05:56


06:27:00
03/24/2017
DTN Early Word Grains 03/24 05:56 Soybeans' Bearish Slide Continues May corn was down 1/2 cent, May soybeans were down 7 cents, and May Chicago wheat was up 2 1/4 cents. By Todd Hultman DTN Analyst 6:00 a.m. CME Globex: May corn was down 1/2 cent, May soybeans were down 7 cents, and May Chicago wheat was up 2 1/4 cents. CME Globex Recap: May soybeans were under bearish pressure overnight, trading lower again after falling to a new five-month low on Thursday. Corn is slightly lower and winter wheat modestly higher while March's favorable weather continues to weigh on grain prices. OUTSIDE MARKETS: The Dow Jones Industrial Average closed down 4.72 points at 20,656.58. The NASDAQ Composite was down 3.95 points at 5,817.69 and the S&P 500 was down 2.49 points at 2,345.96 Thursday. DJIA futures were up 28 points early Friday morning. Asian markets were high with Japan's Nikkei up 177.22 points (0.9%), Hong Kong's Hang Seng up 30.57 points (0.1%), and China's Shanghai Composite up 20.90 points (0.6%). European markets were a little lower Friday with London's FTSE 100 down 1.13 points (-0.02%), Germany's DAX down 6.39 points (-0.05%), and France's CAC 40 down 15.04 points (-0.3%). The U.S. dollar index was down 0.11 at 99.65 while the June euro was up 0.00140 at 1.08445. June 30-year T-Bonds were down 5/32nds at 150'12 while April gold was down $3.40 at $1,243.80. May crude oil was up $0.36 at $48.06 while May Brent crude was up $0.35 at $50.91. Soybeans at the Dalian Exchange were steady to lower and Malaysian palm oil futures are down 0.7%.

DTN Early Word Opening Livestock 03/24 06:18


06:59:00
03/24/2017
DTN Early Word Opening Livestock 03/24 06:18 Meat Futures Likely to Open with Mixed Prices Look for the cattle complex to open on a mixed basis this morning as traders position ahead of cash news and the March 1 on feed report. Lean hog issues should also being with uneven price actions thanks to follow-through buying on one hand and nervousness over pork demand. By John Harrington DTN Livestock Analyst Cattle: $2-4 HR Futures: mixed Live Equiv $150.36 - 0.24* Hogs: Steady-$1 LR Futures: mixed Lean Equiv $ 82.90 - $1.55** * based on formula estimating live cattle equivalent of gross packer revenue ** based on formula estimating lean hog equivalent of gross packer revenue GENERAL COMMENTS: It's been weeks since cattle buyers and sellers have backed themselves into the 11th hour. Yet here we are. Light biz surfaced in part of the North on Thursday, but for the most part the country trade remains untested. Asking prices this morning should be restated around $132-134 in the South and $217-218 plus in the North. March 1 on feed report is set to be unveiled this afternoon at 2:00 CDT. Average trade guesses anticipate the following: on feed, 100-101 percent; placed in February, 98-99 percent; marketed in February, 103-104 percent. Live and feeder futures should open on a mixed basis as bulls and bears posturing before the development of feedlot cash and the release of new on-feed data.

DTN Cattle Prices/Trends 03/24 10:20


10:53:00
03/24/2017
DTN CATTLE PRICES/TRENDS 03/24 10:20 HEAD SOLD LIVE STEERS DRESSED LIVE HEIFERS DRESSED KANSAS . *126.00(BID) . *126.00(BID) . NEBRASKA . *126.00(BID) *210.00(BID) *126.00(BID) *210.00(BID) TEXAS . . . . . COLORADO . . . . . IOWA . . . . . *=PRIVATE SOURCES DTN COMMENTS: The country is quiet this morning with just a few scattered bids on the table, but we expect that will change over the next several hours. Asking prices are around 132.00 plus in the South and 217.00 plus in the North. For what it is worth, we have heard rumors that some packers are claiming that they won't be in the market for cattle this week. Beef cutouts are expected to be mixed with light to moderate box movement. NOTE: Feedlots are encouraged to call DTN with any cattle sales, at 1-800-369-7675, 1-402-399-6402, or 1-402-462-8897. All sales will be listed anonymously and organized by state. General trends and summaries from this data will be posted on the Daily Sales Reported to DTN page.

 

 DTN Headline News

 

Underground Movement - 15


07:44:00
03/24/2017

By Susan Winsor
Progressive Farmer Contributing Editor

Paul and John Dubbels parked their soil finisher and chisel plow in the 1980s after an inch of spring rain carved gullies in their newly finished field. They'd run a disc chisel the previous fall, but farm-rolling highly erodible land near Fergus Falls, Minnesota, and seeing that much erosion was unacceptable.

Today, they spring strip-till corn and continue to no-till soybeans. For farmers looking to streamline agronomics and cut soil loss, there are lessons aplenty in their 33-year tillage journey taken on their west-central Minnesota clay soils.

"Paul and John have successfully no-tilled and strip-tilled for many years," said Jodi DeJong-Hughes, University of Minnesota Extension educator, crops. "That's quite a feat, being so far north."

"People said you have to really work those eroded yellow clay hilltops to get a crop from them, but when we stopped tilling them is when we really got nice crops," Paul said. Besides farming with his brother, John, Paul Dubbels is a seed manager for CHS-New Horizons Ag, based in Herman, Minnesota.

TILLAGE TRANSITION

The Dubbels brothers tried no-till wheat and soybeans in 1982 and began ridge-tilling corn about the same time. When rainfall patterns became too wet to build ridges, they switched to no-till corn and soybeans for another couple of decades. However, trying to put enough fertilizer on with the planter was an ongoing issue. That's when they turned to strip-till.

Environmental Quality Incentives Program (EQIP) funding in 2007 helped the Dubbels purchase Dawn Pluribus spring strip-till units, making strips 8 inches wide and 5 inches deep. "We used it for tillage only and continued applying fertilizer with the planter," Paul said. "Adding more work and no yield gain [compared to no-till] made us pretty half-hearted strip-tillers for a few years."

In 2013, they decided to get the fertilizer off of their planter and set up a strip-till bar with a Montag cart. Paul likes the ability to put 100% of the fertilizer into the strip without additional trips. "We can carry 8 tons of fertilizer with the Montag compared to 2 tons on the planter," he said. "A big reason for strip-till's success is incorporating your fertilizer." Adding all of the nitrogen (N) in the strip didn't burn the seed, as long as they applied the total fertilizer blend (N, P, K, Su, Zn) below the seed.

The slopes the Dubbels farm have caused them to modify their strip-till unit to form slightly narrower strips to address the hilly terrain and erosion concerns. "The smaller strip also prevents the soil from drying out and forming clods [baking]," Paul said.

RESIDUE-FREE STRIP

Managing residue begins with a Case IH 1083 corn head (with knife rolls frequently replaced to keep a square, sharp edge) to chew stalks down to about knee-high. "In our no-till days, chewed-down corn stalks and rolling after soybean planting was all we needed to keep up with residue," Paul said. A chopping head isn't necessary. In a wet fall, it leaves a wet mat on the ground; and it takes more power, he added.

"The key to making strip-till work is row cleaners pushing residue aside, then the planter row cleaners move it further, creating a reasonably clean strip," Paul continued. "Some people think the 'till' part of strip-till makes it work, but it's actually the residue-free fertilized strip." Residue drifting back in the row after planting is less of an issue when strips start out clean and is the reason they strip in the spring.

The Dubbels went from an eight-row to a 16-row planter and didn't gain much. "Filling fertilizer boxes was a real drag -- something had to change," John said.

They traded their 16-row, pull-type planter for a new 12-row semimounted planter and strip-till bar because they didn't think 3-point-hitch implement steering could handle 16 rows. The brothers removed the fertilizer openers from the old planter, stripped everything off the old Pluribus units, put single-disc openers on and fed them with a Montag cart.

After various configurations, they ended up putting on Ausherman/Great Plains single-disc fertilizer openers the third year. They've used them since the 1980s on their planter for both ridge-till and no-till.

"After easily running 12 rows for a year, we thought returning to 16 rows would be easy," Paul said. "Steering 16 rows worked fine, but turning on steep headlands didn't work well. We removed the row-unit gauge wheels to shed weight and now run without any -- openers will go to the depth of their hubs and run OK. We may add some type of closing wheel to break up occasional ribboning in wet clay. Our current configuration probably doesn't pull much harder than a central-fill planter."

It's so hilly in west-central Minnesota they have RTK (Real-Time Kinematic) steerable 3-point hitches on their strip-till bar and planter. "No question, no-till is easier and far simpler," Paul said.

THE TRADE-OFFS

The bottom line is the Dubbels' system allows them to stick with spring strip-till to get all of their fertilizer down in one spring strip-till pass and "to get the fertilizer off the planter," Paul said. "We never tried fall strips since our lightweight units would not penetrate fall soils, and shank machines in the area had issues with conditions being too dry or too wet. After years of no-till, we weren't interested in going back to fall tillage. We are also concerned with washouts from spring snowmelt."

One issue with spring strip-till is wet soil. "In our no-till days, if we could walk across the wet areas, it was firm enough to plant, even if it was squishy," Paul said. "We could never make that work in our tillage days -- our soil structure wasn't there. We were concerned that strip-till would lead to clod problems like we had with tillage."

In extremely wet fields, they leave the strips to dry out for a day or two before planting. "We keep working on settings and modifications such as fertilizer-tube adjustments to accommodate wet conditions," Paul said. "We typically follow with the planter hours after a strip-till pass, which is often enough time to see a little dust."

ADD COVERS

The brothers began experimenting with cover crops two years ago. Although it can be a challenge to establish cover crops before a frost, their experience no-tilling into pasture convinced them of the merits. "Thanks to outstanding soil structure with internal soil drainage, the corn emerged looking green without issues. Harvesting 200-bushel corn and 50-bushel beans with sod and cowpies still intact was as good as it gets," Paul said.

He sees cover crops are one way to mimic the prairie with year-round growth, building soil structure with internal drainage and allowing soil to warm up while remaining covered. The year-round roots also improve soil structure and organic matter, even on hilltops.

"I think over time, cover crops might take soil structure to a new level and allow a switch back to no-till," he added. Increasing earthworm populations are further confirmation of improved soil structure and soil health.

Jill Clapperton, principal Rhizoterra Inc. scientist, called worms ecosystem engineers. "They dramatically improve soil structure, they're severely affected by disturbance, and they benefit strongly from crop diversity and rotation," she said. "If a shovelful of Corn Belt soil has fewer than five earthworms, you have work to do [to improve soil health]. If it has eight, you're good. If you have 10 to 12 earthworms, that's excellent; and if you have more than 12, that's outstanding."

Worm castings and heavy residue are a new look and language for many farmers. "We're fortunate to have understanding landlords with an interest in soil conservation who are strong supporters of maintaining residue-covered soil and appreciate seeing their farm survive heavy rains without gullies," Paul said. "Many are lifelong farmers who understand that high-residue farming looks a little different."

(ES/AG)

2017 Wheat Contest


07:43:00
03/24/2017
By Emily Unglesbee
DTN Staff Reporter

ROCKVILLE, Md. (DTN) -- Wondering how your wheat management stacks up against other growers? Now is your chance to find out: The National Wheat Yield Contest is open and accepting entries for its second year.

"We're going into the year with a lot of excitement among wheat leaders," said Steve Joehl, executive director of the wheat contest for the National Wheat Foundation, which hosts the contest. "A lot of growers are starting to understand how [the contest] can help transfer technology among growers so they can improve their productivity."

Because it was new, last year's contest flew slightly under the radar but still ended up with 169 entries, Joehl said. He's optimistic that this year's participation will double and possibly even triple that number. Registration is already far ahead of last year's pace, with 50 growers signed up and months to go before the May 1 deadline for winter wheat and the August 1 deadline for spring wheat.

Entries will likely pick up as growers get a sense of the crop's potential as it comes out of dormancy. David Eickholt, who placed in the contest last year with a dryland winter wheat yield of 147.74 bushels per acre (bpa), is already eying his central Michigan fields for the 2017 contest.

"We're planning on entering, but it just depends on how the spring plays out," he told DTN. "We started scouting last week and some of it looks very good."

Last year delivered ideal wheat-growing weather for much of the country, and the overall national yield winner, Phillip Gross of Warden, Washington, hit 192.85 bpa with an irrigated WestBred winter wheat variety.

The 2016 contest helped cast a spotlight on an innovative group of wheat farmers who manage wheat as intensively as they do corn and soybeans. "I can't tell you how much I learn from these growers," Joehl said. "They're scouting their wheat weekly and -- in critical times of the season -- two or three times a week."

Among the inputs and management tactics that were highlighted by the winners of last year's contest were fungicide applications, nitrogen use and seeding rates carefully calibrated to each growers' region. This year, Eickholt has his eye on a new variety from the Michigan Crop Improvement Association, and says the spring weather will determine how he manages fungicides and micronutrients in any contest fields.

"We do more scouting on wheat and we use more fungicides, and that's been very successful," he said of his operation.

Growers must be members of either a state wheat association or the National Association of Wheat Growers to participate in the contest. Youth is no barrier; the minimum age is 14, and last year's national winner for irrigated winter wheat was Jagger Borth, a high school senior from Meade, Kansas.

The contest will be divided into the same four categories as last year: dryland winter wheat, irrigated winter wheat, dryland spring wheat and irrigated spring wheat. The winner of each category will be determined by how many percentage points the crop yields above the county average, and an overall highest yield winner will also be recognized. The contest also recognizes the growers recording the highest yield above the county average within each state.

The entered field must have at least five continuous acres of a certified or branded wheat variety. Growers who are planning to enter should keep careful records of every planting metric and input throughout the growing season. The entry fee is $100.

The contest has very specific rules on how to harvest and check yield for the entered field, and a recheck is required if your field yields above 150 bpa. You can find those specifics, along with all the rest of the contest's rules and regulations, here: http://bit.ly/…

The contest's original four sponsors of BASF, Monsanto, John Deere and Croplan are joined by Syngenta, Indigo Agriculture and The McGregor Company this year.

For more information, see the contest website here: http://yieldcontest.wheatfoundation.org/…

Emily Unglesbee can be reached at Emily.unglesbee@dtn.com

Follow Emily Unglesbee on Twitter @Emily_Unglesbee

(PS/BAS)

Crop Tech Corner


07:40:00
03/24/2017

By Emily Unglesbee
DTN Staff Reporter

ROCKVILLE, Md. (DTN) -- This bi-monthly column condenses the latest news in the field of crop technology, research and products.

A NEW KIND OF APHID REPELLENT

Illinois researchers are taking the concept of "spraying for aphids" to a whole new genetic level, according to an Illinois News Bureau press release. University of Illinois entomologist Allison Hansen and her graduate student Margaret Thairu have found a way to aerosolize RNA, the tiny genetic molecules that regulate the expression of our genes. They can be used to shut specific genes off in a target pest in a process called RNA-interference (RNAi). In the past, this has been achieved by injecting the RNA into the pest or genetically engineering a plant to produce the RNA in its tissues and then waiting for the pest to feed on it. The size of the soybean aphid (think a grain of pollen) makes both techniques extremely tedious and difficult.

So Hansen and Thairu created a spray made up of nanoparticles coated with RNA. They then blasted the unsuspecting aphids -- who hate getting wet -- to see if the insects would take up the RNA through tiny breathing tubes called tracheoles. It worked; the RNA in the spray appeared to block the targeted gene's expression and the resulting aphid adults were significantly smaller than the control aphids. The experiment was not a complete homerun; other species of aphid did not react the same way, and another RNAi spray targeting a different gene failed. But the Illinois scientists are optimistic that they have uncovered a valuable new pest control tool, particularly for small, sap-sucking insects like the aphid. "This method is going to propel our field forward, especially for insects where other techniques fall short," Hansen concluded in the news release.

See the release here: http://bit.ly/… and the researcher's study here: http://bit.ly/….

AFLATOXIN-RESISTANT CORN

In another triumph for RNAi technology, University of Arizona scientists have engineered corn plants that express RNA molecules that prevent fungi from producing aflatoxin. All corn producers -- and especially Southern growers -- struggle with aflatoxin, a dangerous toxin produced by the Aspergillus fungus. It is deadly to both livestock and humans at very low levels and can render an entire corn harvest useless.

According to a University of Arizona news release, UA plant scientist Monica Schmidt worked with a team of scientists to produce corn plants that pass RNA from their kernels into the Aspergillus fungus when the plant is infected. Once in the fungus, the RNA targets a gene that produces an enzyme that is key to the toxin production. The RNA switches the gene off, and although the Aspergillus fungus continues to grow, it produces no aflatoxin.

The scientists did extensive testing to ensure that the GMO corn plants didn't produce any undesirable side effects. "This corn plant would be like any other," Schmidt said in the news release. "The only trait that sets it apart is its ability to shut down the toxin production. It shouldn't have any other effects, but obviously, a lot of downstream testing will be required before it could be grown in the fields."

See the news release here: http://bit.ly/… and the scientists' study here: http://bit.ly/….

A BETTER GENE EDITING TOOL FOR AGRICULTURE

CRISPR-Cas9, a fast-developing gene editing technology, has taken the world of genetics and breeding by storm. The technique allows scientists to cut and paste genes in and out of the DNA of plants, animals and even humans. However, gene editing with CRISPR is not always perfectly precise, and the potential for mistakes to slip into the targeted genome remains a concern. Now, a University of Maryland scientist has fine-tuned a version of CRISPR specifically for use in plants, with a great improvement in accuracy, according to a UMD news release. UMD plant scientist Yiping Qi tinkered with a CRISPR version called CRISPR-Cpf1 and incorporated a specific RNA molecule that can act as an enzyme. Using this new method, Qi and his team of researchers were able to produce 100% of the desired targeted gene changes in a transgenic rice crop. "This represents a new and cost-effective breeding tool that will help generate elite plant varieties in agriculture within a few generations," the UMD release concluded.

See the press release here: http://bit.ly/… and Qi's study here: http://go.nature.com/….

Emily Unglesbee can be reached at emily.unglesbee@dtn.com.

Follow Emily Unglesbee on Twitter @Emily_Unglesbee.

(ps\SK)

Cash Planted Into Cover Crops


10:45:00
03/23/2017
By Chris Clayton
DTN Ag Policy Editor

OMAHA (DTN) -- Research and promotion of soil health and cover crops got a major boost Wednesday as the Foundation for Food and Agriculture Research and The Samuel Roberts Noble Foundation announced a $6.6 million national cover crop initiative.

The foundation is jumpstarting the research initiative with a $2.2 million grant, which will focus on promoting soil health through the development and adoption of new cover crops across the country. The groups announced the foundation's grant at a press conference held at the National Press Club in Washington, D.C.

"The Foundation for Food and Agriculture Research is committed to improving the nation's soil health, which is essential to ensuring a productive and sustainable future for food and agriculture," said Sally Rockey, executive director of the foundation. "We look forward to working with the Noble Foundation and a talented team of researchers to develop better-than-ever, soil health-promoting cover crops that will contribute to thriving farms across the United States."

The announcement comes as agriculture has put increased emphasis on soil health and cover-cropping techniques in recent years. DTN/The Progressive Farmer highlighted several issues involved in the growing soil health movement in the mid-February issue of The Progressive Farmer magazine and on the DTN website over the past month. The array of articles from the magazine can be found here: http://dtnpf-digital.com/…

The Foundation for Food and Agriculture Research was created in the 2014 farm bill as a quasi-private group meant to take federal seed money to leverage more private investment in agricultural research. Congress established the group to recognize the need for greater agricultural science and studies. The foundation was based on a similar effort used to fund health-care research.

The Noble Foundation has taken a growing interest in both cover crops and soil health in recent years. The group spearheaded a new group, the Soil Health Institute, specifically to develop a better understanding of national soils and ways to boost agricultural productivity through soil improvement. Bill Buckner, president and CEO of the Noble Foundation, stressed the need for cover crops to help deal with soil erosion and fertility, preserve moisture content, and control weeds and diseases.

"Cover crops play a significant role in sustainable agriculture practices," Buckner said. "It's only fitting to help further research advancement in this area at the national level, which is made possible through the FFAR grant and our team of collaborators."

The groups noted there were multiple other collaborators in this new initiative, including groups involved in the seed industry, as well as USDA's Agricultural Research Service and Natural Resources Conservation Service. Further involvement will come from three land-grant universities, and an existing Legume Cover Crop Breeding Team, comprising another six land-grant universities, ARS sites and a producer network.

The groups stated the main focus of the initiative will be to identify cover crop species with the greatest potential to improve soil health and evaluate such species over a broad geography within three groups: small grains (wheat, rye, oat and triticale), annual legumes (hairy vetch, winter peas and clovers), and brassicas (turnips, radishes, kale and mustards).

"The majority of cover crops are forages," said Twain Butler, Noble Foundation research agronomist, who will serve as the project manager. "We will work with seed companies, a broad network of researchers and producers, and other evaluation sites to assess, evaluate and develop a broad solution to impact agriculture and soil health across a significant portion of the United States. Our goal is simple: to get new cover crop solutions into the hands of those who use them or will be using them."

Researchers will also look to identify and introduce key traits that can improve crop performance and soil enhancement. Scientists at the Noble Foundation plan to use advanced breeding techniques that largely have been limited to high-value row crops.

The American Seed Trade Association and its member companies will be involved in supporting the crop breeding, screening and evaluation of cover crops, said Andrew LaVigne, ASTA president and chief executive officer. "This initiative is a key step in helping foster the next generation of cover crop innovation," LaVigne said.

Field trials will be conducted in Maryland for the Northeast, North Carolina for the Southeast, Oklahoma for the Southern Plains, Nebraska for the Northern Plains and Missouri for the Midwest.

Among the universities involved is the University of Nebraska. John Guretzky, associate professor in the department of agronomy and horticulture, is a co-leader on the project. Guretzky said that once Noble identifies superior germplasm for some cover crops, the trial sites will test the germplasm regionally.

"We'll be evaluating the germplasm to see how it performs in different environments," Guretzky said.

The groups stated that researchers involved in the project will share results from this project with the public through national meetings and peer-reviewed publications. Certain outcomes, including molecular markers, will be made available through publication and publicly accessible databases, the groups added.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(AG/BAS)

White House Adviser Talks Ag


10:41:00
03/23/2017
By Jerry Hagstrom
DTN Political Correspondent

WASHINGTON (DTN) -- President Donald Trump's No. 1 priority for agriculture is international trade, followed by a "reliable, affordable workforce," Ray Starling, special assistant to the president for agriculture on the National Economic Council, told a National Ag Day event at the National Press Club on Tuesday.

In what appears to be his first public speech since taking the job at the White House about four weeks ago, Starling also announced that Trump had issued a proclamation of National Agriculture Day and also talked about regulation, infrastructure and nominations for subcabinet positions.

The president's proclamation stated, "American farmers and ranchers are the heart and soul of America and they represent the determined, self-reliant character of our Nation. We are proud of American agriculture and we recognize agriculture's critical role to our Nation's bright future."

Starling, who grew up in North Carolina, previously worked for Sen. Thom Tillis, R-N.C. He told reporters afterward that the White House realizes there has been "angst" among farmers and ranchers due to some of Trump's statements about foreign countries and trade agreements, but that the administration recognizes the importance of trade to agriculture and intends to pursue trade agreements that will help the sector.

Starling also told reporters, "Over the course of the last couple of weeks, we have been cycling ag groups into the White House to make their case and what their priorities are. A lot of people on the ag front think what we got out of NAFTA [the North American Free Trade Agreement] was generally good and that we certainly don't want to regress any of the gains we made there for agriculture."

Starling noted that Tillis, his former boss, had problems with the Trans Pacific Partnership agreement from which Trump has withdrawn, but that when he was on Capitol Hill "certainly we heard from the ag community [that] TPP was this great thing for ag, was going essentially to be a bit of our nirvana in terms helping us raise prices. All of that is instructive. I hope that we don't retreat from that. I don't get a sense that we will."

Many of the provisions that were in the TPP agreement "will become a floor as opposed to a ceiling," Starling said. But he acknowledged that other countries have "fierce negotiators" and that the Trump administration "will still have to work hard to get there" and that he hopes "to get back to some of those wins we already negotiated."

Starling said farmers and ranchers should be reassured that what's said inside the White House about agriculture and trade is "nothing but good stuff" about how agriculture is contributing to lessening the trade deficit.

"The president has talked a lot about our manufacturing imbalance on trade, but that is not meant to neglect ag. That is essentially to say we know ag is doing a good job, we are making strides there, we need to do more," he said.

"One of the quickest things" that could increase exports is for the value of the dollar to drop or world demand to increase, he added. But given the level of world stocks, "we won't clear the backlog anytime soon," he concluded.

When asked about immigration policy, Starling said, "I am pretty sure I did not use the word immigration; I used access to a reliable, affordable workforce."

The most important goal, he said, is to secure the current workforce. Farmers are worried about potential raids on fruit and vegetable and dairy farms that have a lot of undocumented workers, but Starling did not say how workers would be secured.

The issue of the farm workforce must begin "early on, just admitting that ag has to be part of that conversation," he said, adding that "there are really two things ag is looking for as part of that conversation."

One, he said, is "how do we stabilize the current workers to the extent that there are people currently engaged in agriculture and farming activities whose legal status may not be sure -- how we stabilize that and create a situation where we don't lose all those workers or they don't move to another industry?"

The second part, Starling added, is that "we are going to take a look at these temporary guest worker programs to reform them in a way that they are more secure, they are more reliable, and that, frankly, for the users that are trying to follow the rules and do it right, to make sure they are not as cumbersome, that they are easier to use."

But Starling said that he and others on the National Economic Council have been charged with determining "what are the factors inhibiting economic growth in the sector you represent" and that, in agriculture "we are coming to a point of push comes to shove when it comes to a reliable workforce."

After trade and the workforce, Trump's third policy priority for agriculture is to "evaluate the existing regulatory landscape and make it less onerous," Starling said. Trump also wants to create "a systemic mechanism" across the government so agriculture has a voice in all the agencies after he leaves office, he added.

Starling noted that agriculture already has a voice within the Agriculture Department, but the biggest problems have been with the Interior Department, the Environmental Protection Agency, the Labor Department and others. Farmers are not usually "hounded" by the Agriculture Department, he said.

Trump's fourth priority, Starling said, is improving the infrastructure in rural America. That includes everything from the land grant colleges to ports, roads and bridges, he said.

"Rural America may need different solutions," Starling said.

On whether infrastructure will be a package, Starling said he would defer to D.J. Gribbin, the special assistant to the president for infrastructure policy. Starling noted that he and Gribbin had met with a group of ag and rural leaders on the infrastructure issues, and he said that Gribbin has already incorporated what he learned in that meeting into his presentations at the White House.

"We are still weeks away from really revealing how that is going to unfold," Starling said. "The key message there is that ag is going to have a seat at the table."

In fact, he added, agriculture is a "key part" of conversations about health care and tax reform as well as infrastructure.

Starling also said it was just as important to tell the attendees celebrating National Agriculture Day what the administration won't do, and in that vein made a series of pronouncements:

"This administration has already taken steps to minimize the implications of the last president's WOTUS [Waters of the United States or Clean Water rule] proposal, and we will never propose an expansive reading of the Clean Water Act that gives the federal government an opportunity and jurisdiction to regulate every ditch and mud hole on your private property.

"This administration will not use the Endangered Species Act to regulate in a way that doesn't respect the peaceful co-existence of productive agriculture.

"This administration will not release sensitive and private data on farmers just because ecologically driven fanatics and lawyers want it.

"This administration will not allow the EPA [Environmental Protection Agency] to give taxpayer dollars to activist groups who then turn around and put up billboards that attack our farmers and ranchers.

"This administration will never lose sight of the fact that the No. 1 farm preservation tool we have is farm profitability -- not buzzwords, not catchphrases, or a federal grant program."

Speaking of "smart" farming, Starling said that agriculture "is always innovating, always looking to keep its environmental footprint as soft as possible" while creating the safest, most affordable food supply in the world.

On the issue of the nomination of subcabinet level officials at USDA, Starling said the administration's priority is to get the Senate to confirm Sonny Perdue, the former Republican Georgia governor who is Trump's nominee for Agriculture secretary. The administration wants Perdue to "weigh in" on the other appointments, he said.

Talking about all these proposals in his first weeks on the job is "fun," Starling said, but "nothing will be very fun if we don't actually get things done."

The president's full proclamation on National Ag Day: https://www.whitehouse.gov/…

Follow Jerry on Twitter @HagstromReport

(CC/AG)

Ag's HR Coach


07:23:00
03/23/2017
By Lori Culler
DTN HR Columnist

When working with new clients, one of the questions we ask is, what's your farm culture? Job seekers want to know what it will be like to work there on a daily basis. The typical answer from most clients is, "Hmm ... I haven't given that much thought before."

Whether you have a team of 20 or two brothers operating on your farm, you have a company culture. It has either been created on purpose or most likely just developed over time. The definitions for company culture are vast, but in its simplest form it's the personality of the organization. It's the shared values, behaviors, and communication styles from the team. The real question is whether your culture is driving increased performance and creating an environment that attracts and retains strong employees or is hurting your full potential as an organization. It is amazing what a group of highly motivated individuals can do when they are all contributing at their highest level, bringing more ideas and value than you had ever imagined.

As owners and managers, we can consciously accept the current culture or choose to change it into something more desirable.

EVALUATING CURRENT CULTURE

It's hard to see what your culture is when you're there in the thick of it. Understand your environment by doing these three activities:

1. Be an observer. Watch for interactions between employees; how are they speaking to one another? Listen carefully to the wording your team uses when interacting with one another. Watch for body languages. Look around you; if someone walked in today, what would they have to say about your farm?

2. Ask your employees. You can do this on an individual basis or in small teams depending on your farm size. Ask questions such as: If a friend were applying for a job here, how would you describe what's it like working here? Name one thing you do not like about working here. What do you love about working on our farm?

3. Conduct a confidential survey. Create your own survey or pull a template online to gather feedback from the team. Another option is to use an employee satisfaction survey to gauge your current team's view of their job and the company.

DEFINE YOUR IDEAL CULTURE

After a careful review of your current culture and taking a deep dive into what really drives performance in your organization, define your ideal culture. Start to list what elements you would like to see present in your culture. Those elements might be something like an environment of continuous learning, and defining what that would look like. There might be an element focused on driving creativity and innovative thinkers in the group. I would encourage an element that focuses on ensuring employees are valued for their efforts. Write down what elements you would like to see in your culture and communicate that to the team.

MAKING THE CHANGE

Analyzing and working toward an improved company culture is not a one-time event. It doesn't have to take a lot of time, but it does require a continuous focus and evaluation. Determine which changes and activities will have the most impact. Communicate with your employees where you would like to take the culture and what areas you will be focusing on to get there. Get your employees involved; create a team-committee with an employee as the lead to focus on initiatives that support the new culture. You may even consider giving the committee a budget to use toward their initiatives.

Just like old habits take time to break, so does changing a culture that has been entrenched for years, if not decades. The top farm cultures I know of say it's a constant work in progress.

TIPS FOR IMPROVING CULTURE

AgHires recently presented on a DTN/Progressive Farmer webinar with Sally Hollis of Lanehaven Farms called "Think Like Big Business: Creative Employee Benefits and Bonuses." Much of the discussion was focused on the intangible benefits farms can offer employees. I encourage you to watch the full webinar at https://goo.gl/….

You'll be amazed at how small changes and a focused effort will improve your overall culture and productivity on your farm.

**

Editor's note: Lori Culler grew up on a vegetable and grain farm and is the founder of AgHires (https://aghires.com/…), a national employment recruiting service and online ag job board based in Temperance, Michigan. Email lori@aghires.com and find other labor management tips under Resources at www.dtnpf.com

(AG/SK)

EQIP for Plains Fire Victims


06:37:00
03/22/2017
By Chris Clayton
DTN Ag Policy Editor

OMAHA (DTN) -- USDA on Tuesday announced $6 million in conservation program funds has been set aside specifically for farmers and ranchers hit by wildfires in Kansas, Oklahoma and Texas.

The $6 million comes from the Environmental Quality Incentives Program (EQIP). The funding can be used by farmers and ranchers to pay for grazing lands, rebuild fences and protect damaged watersheds.

"I am pleased USDA has acted swiftly to aid producers recovering from the largest wildfire in state history," said Sen. Pat Roberts, R-Kan., chairman of the Senate Agriculture Committee. "For many Kansans, the impacts are devastating because the fires not only consumed livestock, grazing lands, and fencing -- but in some cases, homes, machinery, and equipment, too."

Roberts said, "We are still learning lessons from the response to the Anderson Creek fires from last year that can be applied to this response and recovery effort."

There are few hard numbers on the total losses from the wildfires, some of which continue to break out in parts of the Southern Plains.

Wildfires in Texas caused at least $21 million in damage, according to Texas A&M economist Steve Amosson, who gave that figure to the San Antonio Express News.

According to the Texas Animal Health Commission, roughly 2,500 cattle and 1,900 hogs were killed in the fires in that state.

"We have seen the devastating effects of these wildfires on agricultural operations, and the funding announced today can help communities of farmers and ranchers start the process of recovery," said Acting Deputy Agriculture Secretary Michael Young. "USDA is here to offer assistance, and I encourage producers who experienced losses to take full advantage of our financial and technical assistance to aid in their recovery efforts and alleviate part of the financial burden caused by these tragic events."

DTN Senior Ag Meteorologist Bryce Anderson said rain in the affected areas will vary over the next week or so. Southern Plains rain will occur in the next week, but will be quite varied in the next week and a half. Western and southern Kansas should see light moisture this week of 0.10 to 0.40 inch, Anderson said. The lightest amounts will be in the southwest around Dodge City and Garden City. Next week brings a couple additional systems with total precipitation in the March 26-April 5 time frame of 1 to 1.5 inches, he said.

Oklahoma is expected to see lighter precipitation with 0.25 to 0.40 inch this week and up to a half-inch next week in the Panhandle, with maybe up to an inch in north-central areas, Anderson said.

Texas Panhandle locations are lightest on precipitation, Anderson said. The northern Panhandle may get 0.20 to 0.30 inch this week and up to a half-inch next week. The southern Panhandle, around Lubbock, is only in line for about 0.20 inch this week and another 0.10 inch next week, he said.

EQIP, administered by USDA's Natural Resource Conservation Service, is a conservation program that provides financial and technical assistance to agricultural producers to help plan and implement conservation practices that address priority local and state resource concerns.

Farmers and ranchers affected by the disaster should also check with the local Farm Service Agency office about disaster programs.

Producers in the affected counties are encouraged to check with their local NRCS service centers for additional information. Step-by-step assistance can be found at http://www.nrcs.usda.gov/….

Oklahoma has some information about providing relief for the northwest Oklahoma fires that affected both Oklahoma and Kansas. http://www.oda.state.ok.us/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(AG)

By the Numbers


06:29:00
03/22/2017

By Danny Klinefelter
DTN Farm Business Adviser

I recently attended a Farm Credit Director Development program in Charleston, South Carolina, where Dave Kohl presented an agricultural economic update. I thought his presentation was exceptional.

He described agricultural producers as fitting into one of three categories: 1) still profitable and cash flowing, still managing tighter margins; 2) those with low leverage ratios, but facing declining working capital and being forced to refinance; and 3) zombies -- those still managing the business pretty much as they always have, but being forced to sell property, digging into core equity, and experiencing multiple refinancing.

He also noted that large borrowers were falling into two categories: 1) those that were still profitable because they got where they are because they were better business managers, and 2) those that were beginning to face severe financial problems because they had gotten bigger before they got better during the boom period that ended three years ago.

He pointed out that producers in the latter two categories in group one and the last category of large borrowers in group two tended to exhibit several characteristics:

1. They were using out-of-date methods of preparing and analyzing financial information;

2. Didn't know their true cost of production by enterprise or individual farm units;

3. Weren't controlling family living costs;

4. Hadn't shed non-productive or non-economical assets;

5. Didn't have a written improvement plan;

6. Didn't practice the four cornerstones of business success -- plan, strategize, execute and monitor;

7. Didn't have or execute a marketing plan;

8. Didn't have a good handle on record keeping;

9. Didn't "sweat the small stuff" and weren't employing the 5% rule I've been stressing for the last 25 years; and,

10. Have not focused on developing or preparing for the next generation.

All of this makes it clear to me that unless lenders and Extension immediately begin educating borrowers about finance and the basics of management, the situation could get really ugly if this downturn in the ag economy extends for another three years as many are predicting.

While USDA's Farm Service Agency still has the borrower education requirements they instituted several years ago, most commercial lenders have shied away from requiring training and have only made it available for young and beginning farmers and established farmers who recognized they need it and sought it out. If FSA required farmers to go through training, they believe many/most of their borrowers would not be motivated to learn and apply what they heard, or if they did, those borrowers who could would leave and move to another lender.

Extension has been hampered by several things. Budget cuts have seriously cut into the number of financial specialists in many states. Even if Extension did offer in-depth training workshops, participation would be minimal. Most farmers fall into one or more of four categories:

1. They don't recognize what they don't know;

2. They don't like to work with numbers or other areas where they have a weakness;

3. They don't think they need it; or,

4. They are too embarrassed and fear it would stigmatize them because it would indicate to others that they have a problem.

If the training did occur, there are several things I believe definitely need to be covered in a workshop format, i.e., so participants have to work through exercises and not just listen:

1. The mechanics for adjusting cash to accrual net income and why it's critical.

2. How to calculate both earned and market value need worth and why it's important.

3. How to calculate the working capital burn rate.

4. How to calculate the equity capital burn rate.

5. The calculation and interpretation of the key financial ratios.

6. How to calculate and interpret the DuPont model so producers can determine where the real problems lie and where changes would generate the biggest benefit.

7. How to calculate actual family living withdrawals.

8. The importance of developing "what if" scenarios and strategies to dealing with events proactively.

9. The importance of monitoring actual versus plan performance on a regular basis throughout the year and focus on the variances so producers can address problems and opportunities in a timelier manner.

10. The need for farmers to be moving toward cost/managerial accounting so they know their costs at a farm, enterprise, and unit of production level.

11. Finally, understand the 5% rule and how a 5% increase in production, a decrease in costs and a 5% increase in net price received can affect the bottom line by over 100%, plus the addition to earned net worth can be compounded over time.

One approach might be to offer borrowers an incentive, such as a rate reduction, if they participated in a meaningful way and demonstrated that they learned and were adopting what they learned.

Unless something dramatically changes, I'm afraid we could be headed for a repeat of what happened in the 1980s. It probably won't be as severe, because there have been some significant changes; but, it could still be disastrous in some regions of the country.

There are tools available now that were not there in the 1980s. The Farm Financial Standards Council has financial reporting and analysis guidelines that didn't exist. Many state Extension services did develop educational materials following the financial crisis that could be resurrected and updated with current information. Also, lenders like Ag Choice Farm Credit Services are using the modules developed by Dave Kohl in their Ag Biz Planner Program that could be used by other lenders. This might even be a place where Farm Credit, commercial banks, and Extension could collaborate for the good of the farm community.

Something needs to be done soon, before it's too late for many farmers and many ag lenders, as well.

**

Editor's Note: Danny Klinefelter is an agricultural finance professor and economist with Texas AgriLIFE Extension and Texas A&M University. He also is the founder of the mid-career Texas A&M management course for executive farmers called TEPAP. To read all of Klinefelter's recent DTN columns go to https://www.dtnpf.com/….

(AG/ES)

Todd's Take


06:25:00
03/22/2017
By Todd Hultman
DTN Analyst

Similar to last week's column on corn's seasonal influence, this week takes a look at the numbers for soybeans. Using the same logic of trying to identify a time of year when the market is not focused on new soybeans being added to supplies, we start again at Nov. 30, after most of the U.S. harvest is typically over.

Finding an exit date for soybeans' drawdown season is tricky as Brazil's exports have become more competitive with U.S. supplies in the past 10 years. Empirically, however, we can look at the 10-year seasonal average for soybeans in DTN's ProphetX and see that the seasonal peak still comes on July 4, later than many might expect.

Why hasn't Brazil's production shifted the seasonal peak to an earlier date yet? My guess is because neither Brazil nor the U.S. has the ability to supply the world's needs by itself. In other words, Brazil's soybean crop is needed, but can't be declared bearish until we know more about how big the U.S. crop turns out to be.

Since soybeans' seasonal peak has been arriving roughly one month later than corn's, I decided to compare two holding periods for soybeans. The first period tested covered the same six months after Nov. 30 that we tested for corn. The results were impressive.

Using DTN's national index of cash soybean prices from 1993 through 2016, owning soybeans perpetually produced a theoretical gain of $3.96 a bushel, or roughly 16 cents per year. Restricting the holding period from Nov. 30 to May 31 each year increased the theoretical gain to $18.70 a bushel, or nearly 13 cents a bushel per month held, excluding slippage and commissions.

If we extend the holding period one month longer to June 30, the theoretical gain increases to $22.64 a bushel, or slightly more than 13 cents a bushel per month held. Both scenarios suggest that storing soybeans has been a profitable venture even after deducting storage costs.

While holding soybeans for seven months increased the total gain by nearly $4.00 a bushel, it should be noted that equity changes for the six-month scenario showed a more consistent upward path. I mention that because storing soybeans wasn't profitable every year and stress is always a factor. Emotionally speaking, some will find it easier to follow a strategy that has a more consistent, positive performance.

As with corn, if you get nothing else out of this study, be aware of how dangerous it has been to own cash soybeans from July 1 to the end of November. A 24-year loss of $18.68 a bushel, plus storage, plus interest speaks for itself and should top any marketing list of things not to do.

We can never guarantee that the future will unfold the same way it has in the past, and each year will have its own challenges. But for both corn and soybeans, it seems safe to say that the seasonal ebb and flow of prices should always be one of the first factors to consider, as past prices have shown a distinct change in behavior between the two different times of the year.

Todd Hultman can be reached at todd.hultman@dtn.com

Follow Todd Hultman on Twitter @ToddHultman1

(AG/BAS)


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