• Corn prices have declined $2 since the June highs, and IL Extension's Darrel Good says that has revived ethanol profitability. "Lower crude oil prices have resulted in lower prices for ethanol. The average price of ethanol at Iowa plants declined from $2.82 per gallon on July 3, 2008 to $2.57 per gallon on July 18. The drop in ethanol prices over the past two weeks has been more than offset by the decline in corn prices. Spot cash prices for corn, ethanol, and distillers' grain suggest that the current gross crush margin is at the high end of the margins experienced over the past 11 months. Corn consumption for ethanol should continue to increase as forecast as corn prices follow crude oil prices."
• Good is also watching crop ratings, and says, "As of July 13, only 13% of the corn crop was in the silk stage, compared to 50% on the same date last year and the 5-year average of 36%. Recent weather conditions, however, suggest that maturity will progress rapidly." He's expecting volatility to continue in the corn market. Read his weekly newsletter at: http://www.farmdoc.uiuc.edu/marketing/weekly/html/072108.html .
• Agreement on the weather comes from Kansas State's Mike Woolverton, who says, "We are dodging the bullet of excessive July heat damaging late pollinating corn," and he expects the national average yield to be higher than currently projected. Read his newsletter at: http://www.agmanager.info/marketing/outlook/newletters/default.asp .
• Woolverton says wheat has been damaged the least by the current price slide and has only dropped $1.50 since harvest began. "The surprise was price didn't fall further in the face of a projected 9% increase in global wheat production this year." He says the current Kansas City cash bid of $7.82 has held up because of low global stocks, high global demand, and it will take a large amount of wheat to fill pipelines and warehouses.
• Of the $4 increase in corn prices, $3 is due to oil prices and $1 is attributable to the ethanol subsidy, according to Purdue economist Wally Tyner in a new study for the Farm Foundation. His colleague Phil Abbott says the weak dollar has caused all commodity prices to rise, and whatever affects the dollar will also influence food prices. He said since 2002 the dollar has depreciated 45% and agricultural exports have increased 54%.
• The Purdue study on food and fuel prices says decreased investment in agricultural research has lead to lower production growth, reduced stocks, and set the stage for higher commodity prices. But they said speculators have not had an impact. They believe the market is more volatile, but price levels have not increased because of speculators.
• Heading into August, Ohio State meteorologist Jim Noel expects near normal rainfall and temperatures. But he says the August and September pattern may be slightly drier than normal. He does not see any long stretches of 90 degree days, and says it might be one of the cooler summers in that regard. He says the heat will stay in the western US.
• Count your GDD's. Extension specialist Emerson Nafziger says early May corn has accumulated 1,500 growing degree days since planting and only needs 1,200 more to reach maturity. He says it takes about 50 days to do that at this point in the season. Nafziger says so far the summer has been good in overcoming late planting problems.
• You cannot cure uneven cornfields says Emerson Nafziger caused by unevenly wet soil conditions where corn will more quickly show water and nutrient stress. Before hiring a commercial sprayer, he suggests scouting the field to map out the greatest area for yield potential and focus any rescue spray on that instead of corn that may not mature.
• Corn silking is 12 days late in Iowa, says Iowa State specialist Roger Elmore, and he says June 30^th replanted acres will be silking in mid-August. Elmore says a late frost could allow 96% of optimum yield, but an early frost means a 45% yield. He's warning farmers not to apply fungicides until after tasseling or it will damage the ear formation.
• Aerial sprayers are busy as farmers try to control rust and fungus in corn. Extension's Carl Bradley says the timeframe is from tasseling to blister stage if you are going to spray. He urges you to check the susceptibility of your hybrids to rust and fungus before spending the money. But he says with late corn, the risk for yield loss due to rust and other foliar diseases does increase. http://www.ipm.uiuc.edu/bulletin/article.php?id=998
• If you applied N earlier and your corn looks healthy, Extension fertility specialist Fabian Fernandez says there should be no concern about it running out of N. If the corn was late, your concern should be on kernel development, and a short crop will not need as much N as in a typical year. Corn deficient in N can benefit if applied before tasseling.
• Soybean prospects are questionable says Emerson Nafziger at Illinois because of the late blooming and podding, unless it can be sustained over a long period of time and a friendly September. He says pods and seeds fill faster with 80 degree days and 70 degree nights, but divergence from that means fewer pods, seeds, and lower yields.
• Japanese beetles are more of a problem this year than last say Extension entomologists, who report 417,102 caught in 1 trap over the course of a week. However, specialists say populations are highly variable, and are worse in some areas and less of a problem in others. Read more at: http://www.ipm.uiuc.edu/bulletin/article.php?id=992 .
• Keep your fingers crossed that California researchers may have found a chemical to keep male Japanese beetles from finding females, and when their formula was tested, captures of Japanese beetles declined. IL Extension's Mike Gray calls that "exciting."
• If you need to control Japanese beetles, Mike Gray and Kevin Steffey at Illinois suggest:
  1) Pyrethroids kill Japanese beetles on contact, but they also are repellent to beetles.
  2) High temperatures may reduce the efficacy of some pyrethroids
  3) Tank-mixing different insecticides should not be necessary in most situations.
  4) Assess the situation for the entire field, and spray only where necessary.
  5) Japanese beetles become a non-issue in cornfields after pollination is complete.
• Soybean aphid populations are increasing say crop scouts participating in a survey. Specialists say if a plant is found with numerous aphids, it warrants being vigilant well into August. The 2006 aphid population began to increase beginning late August into mid-September, and at that point beans were beyond being affected by aphids.
• The cold, wet spring did have a detrimental impact on insects in IN and OH says Purdue entomologist John Obermeyer. He says the floods drowned corn rootworms and Japanese beetles, and very few are being found this year, and he expects low numbers in 2009 also.
• IL corn rootworms apparently were not seriously affected by the cool temperatures, cold, wet soils, and late planting. Entomologists at the University of Illinois report "respectable levels of pruning" as they dig rootballs on corn stalks to assign root ratings to various insecticides. The analysis and insecticide evaluation is several weeks away.
• Western bean cutworms are being found more frequently, and in increasing numbers. Extension Specialist Kevin Steffey says any corn that does not have the Herculex I Insect Protection trait should be scouted for the adults. He says look for eggs and larvae on the top side of corn leaves from the ear to the tassel, and the objective is to kill the larvae before they reach the ear. An 8% infestation of plants is the threshold for spraying.
• You may be bumping the calendar in spraying weedy beans says Weed Scientist Aaron Hager, because of the lateness of planting. He says post emergent sprays are restricted to either a developmental stage of the soybean or days prior to harvest. Hager says violation of the label means chemical residue may be on harvested beans or yields may be reduced. Check his chart before spraying: http://www.ipm.uiuc.edu/bulletin/article.php?id=997
• The decline in corn prices means it is time for cattle feeders to "pencil out some break-evens and see if feeding yearlings or calves could be profitable," says Nebraska livestock economist Darrell Mark. "And, for those with cattle on feed and purchasing corn, it is a time to watch for a bottom in the corn market and consider making purchases."
• Since corn prices dropped, Darrell Mark says the spread between calf and yearling prices has not widened as would have been expected. Instead, he says calves have become cheaper compared to yearlings. "And, that current benefit is reflected in a bottom-line for feeding calves that is almost $40/head better than yearlings," he says. Read his newsletter at: http://www.lmic.info/memberspublic/InTheCattleMarket.html .
• The export market is doing more than its share for the price of hogs says Ron Plain at Missouri. May pork exports were almost double that of May 2007 and contributed $43.62 per head slaughtered. For Jan. to May, exports averaged $33.51 per head in value; and Plain says 26.5% of every hog slaughtered in the US is exported.

"These cost increases will lead to higher breakeven prices for both corn and soybeans," said Gary D. Schnitkey, U of I Extension farm financial management specialist. "Higher costs will cause farmers to more closely examine how much to adjust cash rent bids. Higher costs also may influence marketing and crop insurance decisions."

Schnitkey's report, "Dramatic Increases in Corn and Soybean Costs in 2009," (http://www.farmdoc.uiuc.edu/manage/newsletters/fefo08_13/fefo08_13.html) is available on U of I Extension's farmdoc website.

The cost increases were projected for central Illinois farms having high-productivity farmland.

"Input prices, particularly for fertilizers, are uncertain and could be different than those we used in the study," he said. "It is safe, however, to estimate large production cost increases for both corn and soybeans in 2009."

For corn, non-land production costs for 2009 are projected at $529 per acre, a $141 per acre increase from 2008 levels of $388 per acre. Between 2003 and 2007, non-land production costs averaged $286 per acre. Production costs for 2009 are projected to be $243 per acre higher than the 2003-07 average, an increase of 85 percent.

For soybeans, non-land production costs for 2009 are projected at $321 per acre, up by $82 over 2008 costs of $239 per acre. Between 2003 and 2007, non-land costs for soybeans averaged $180 per acre. Productions costs for 2009 are projected to be $4141 higher than 2003-07 levels, an increase of 78 percent.

"Fertilizer is the input with the large cost increase," said Schnitkey. "For corn, fertilizer costs in 2009 are projected at $215 per acre, an increase of $97 per acre over the 2008 projected level of $118 per acre.

"For soybeans, fertilizer costs in 2009 are projected at $98 per acre, a $53 increase over the 2008 level of $45 per acre."

He noted that projected 2009 fertilizer prices are significantly above fertilizer prices in recent years.

"Besides fertilizer, seed costs are projected to increase," he noted.

Also up in the 2009 projections are insurance and power costs.

Based on yield expectations of 191 bushels per acre, the 2009 breakeven price for corn is $3.82 per bushel. The soybean breakeven price is $9.65 per bushel.

"These breakeven prices are significantly higher than historic commodity prices," Schnitkey said. "Corn, for example, averaged close to $2.40 per bushel between the mid-1970s to the middle 2000s.

"Large income losses would occur if commodity prices returned to historical averages."

• Watch for today's USDA Supply and Demand Report to provide some yield estimates that will take the flooding into account. USDA last estimated corn at 149 bu., based on the slow planting rate, but not on lost acres or ponded fields. Soybean yields will get some attention, based also on acreage, but little on plant development and maturity.
• The yield and production estimates from the July report will figure prominently in the market moves over the next few weeks, says ag economist Chad Hart at Iowa State. "Another yield adjustment in corn could push estimated production below 11.5 billion bushels, well below last year's record production. This would tighten the outlook for corn as projected usage was already above estimated production and similarly for soybeans.
• Regarding beans, even at trend yields, if demand holds as projected, 2008 ending stocks could approach 100 million bushels, below the carryout projected for 2007. Any sort of downward yield adjustment would continue to tighten an already tight market.
• Have you looked inside a corn whorl lately? That is the home to a wide range of bugs that are defoliating corn from the inside out. Unfortunately, Extension entomologists in the Cornbelt agree that little is known about such an impact, and have had to use data from hail defoliation to provide insight about how badly corn can be damaged.
• Corn growers and researchers have found whorls to be harboring fall armyworms, Japanese beetles, and first generation European corn borer. Specialists say the winter did not increase their mortality, and the delayed planting and delayed corn development this year have synchronized V6-VT stages of corn with a host of defoliating insects.
• So what do you do? Specialists say the defoliation looks worse than the effect it will have on yields. Species should be identified and evaluations made of their damage, which they add, tassel destruction is not an issue. But silk clipping needs to be monitored. Find out more: http://www.ipm.uiuc.edu/bulletin/article.php?id=979 .
• High valued corn is even in more jeopardy from silk clipping insects, such as Japanese beetles and corn rootworm beetles. "An insecticide application may be warranted when there are 5 or more rootworm beetles per plant, pollination is not complete, and silk clipping is observed. An insecticide application may be warranted when there are 3 or more Japanese beetles per ear and pollination is not complete. Entomologists say the numbers of Japanese beetles may be overwhelming, but just protect the corn silks.
• Late planted corn and beans may be hosting black cutworms. Normally they hurt young corn, but this year, the late planted fields are giving them a second wind. Crop scouts report the population of a replanted soybean field was clipped about 50%.
• Western bean cutworms are becoming prevalent, and spreading quickly across the Cornbelt and even into Ontario, Canada. IL Extension entomologists say they are apparently replacing many of the insects killed off by YieldGard and Agrisure. So it seems that the western bean caterpillars are not hurt by those Bt genes. They say the Herculex Insect Protection products are an alternative. If an insecticide is needed, the determinant is when 8% of the plants are infected before larvae move to the ears.
• Soybean aphids remain in relative seclusion or in very small numbers that have escaped crop scouts. Some discoveries have also found predators along with the aphids that have helped keep populations down. However, IL Extension entomologist Kevin Steffey says temperatures from 70 to 86 degrees will allow aphid populations to double in 3-4 days.
• Is there a need to spray soybeans with a foliar fungicide? X.B. Yang at Iowa State says, "This year would be the year to see the benefits unless we are fooled by Mother Nature and the rest of season becomes hot and dry." He adds, "The chance to see yield benefits from a spray so far is much higher than most normal years."
• Is there a need to spray soybeans with a foliar fertilizer? Agronomist Antonio Mallarino says, "The short answer is that it may, but probably not in fields that have been well fertilized or where growth is limited by factors other than nutrient supply."
• If your county was one of those in which USDA released the CRP for early grazing, you need to evaluate the benefit of the additional pasture with the fact that your CRP rental payment will be reduced by 25%. That calculation will also have to include the cost of fences and water supply for the livestock. A modified conservation plan must be submitted, and the FSA office must approve the plan. Find the list of states & counties www.usda.gov/wps/portal/!ut/p/_s.7_0_A/7_0_1OB?contentidonly=true&contentid=2008/07/0179.xml .
• If you can wait until August 1, you can either graze or bale hay on your CRP for only a nominal fee. Iowa State agronomist Stephan Barnhart says most CRP is going to have weeds and brush along with any grass that will reduce the value of the hay and could damage baling equipment. He says the nutritive value of the crop is low, because plants have now begun to lose their protein content and have begun accumulating fibrous tissue.