• Lower oil prices equals lower ethanol prices equals lower corn prices. IL Extension's Darrel Good says corn prices have a 90% correlation to ethanol prices, and ethanol has dropped from $2.82 per gal. in July to $1.57 last week. Corn prices are down as a result his newsletter says. http://www.farmdoc.uiuc.edu/marketing/weekly/html/111708.html
• Lower hog prices equals lower corn prices also, says Darrel Good, who says that means a reduced demand for corn as livestock feed. Once $85 last summer, lean hog futures are now $62. He says despite lower corn costs, lower hog prices imply more liquidation. Similarly, cattle futures that were once $117 are now near $89 with feedlots emptying.
• Compared to 2007, corn exports have turned inside out, says Good. The record 2.4 bil. bu. of exports last year resulted from two years of short crops and the low value of the US dollar which made exports attractive. He says feed supplies have increased, demand has weakened, the dollar has strengthened, and 2008-09 exports will be closer to 1.9 bil.
• Will corn prices increase? Darrel Good says despite some optimism for higher prices, he says it is not clear where the market fundamentals will improve to push up prices, and he adds it will still take recovery in the financial and energy markets to achieve that.
• "It is kind of a strange situation when you have to hope for an increase in the price of oil to hope for an increase in the price of corn," says MI Extension's Jim Hilker. "Given lower oil prices, I suspect it will take a drop in input prices, to make the 2009 corn crop profitable. We would expect to see at least the nitrogen prices to drop off sharply." His focus is on net, not price. Read more at: https://www.msu.edu/user/hilker/outlook.htm
• Will corn and beans fight for 2009 acreage? That is a question that MSU's Jim Hilker asks, "We will need 5-6 million more corn acres in 2009 versus 2008. Prospects on input prices will play a big role, in addition to output prices, but that is always the case. Perceived corn versus soybean yield potential may be the harder call to make. Corn yields relative to bean yields seem to be improving quicker, and seem to be less risky."
• Wheat did not have to bid as high to keep new crop acreage, says Hilker because of less demand. He says lack of market convergence remains an issue. "In the US soft red wheat sector we still have the disconnect between cash and futures. And while forced load out would tie the two back together, it is unclear how much futures would come down versus cash up, but at least we would have a price risk management tool again."
• The Nov bean contract expired Nov. 14 ranging from a low of $6.23 in mid-Jan. 2006 to a high of $16.31 on July 3, 2008. MN Extension's Ed Usset says the $10+ spread may be the largest spread ever for soybeans between the life of contract high and low.
• Beans have not lost as much value as corn, says Purdue economist Chris Hurt because beans have more "star power." He says soybeans do not have as many negative fundamentals as does corn, although both are subject to the financial crisis and the value of the dollar. But he says soybeans are not hit as hard by declining crude oil prices.
• Exports are helping the soybean market, says Hurt, which are 15% above year ago levels. And he says if the current pace holds, USDA may have to set a higher target. One of the positives is the fact that China is the top soybean customer and it is holding $2 trillion in foreign currency, enabling it to buy in an economy where cash is king.
• Save $8-10 per acre by eliminating one field pass says NE Extension's Gary Zoubek. He suggests forgetting about shredding stalks, since NE planter researchers found no advantage to removing corn stalk residue if the planter is weighted and downpressure springs are used to keep the proper planting depth. More: http://cropwatch.unl.edu/
• If you buy the new Roundup Ready 2 Yield seed beans, you are buying a bag with a specific number of beans inside, not bags with a uniform weight. That is the industry trend, says MO Extension's Bill Wiebold, who says you will get 140,000 beans, but not necessarily 50 lbs. of seed. Wiebold says a seed size of 2,800/lb. is about average, but seed size will vary by variety and will vary due to environmental conditions.
• The constant number of seeds per bag will not be welcomed by those farmers who buy smaller seeds, believing they will be able to plant more acres with fewer bags of seed beans. Those farmers may resist the change, says MO agronomist Bill Wiebold. But he says knowing the number of seeds per bag allows more precise calibration of planters.
• The size of seed beans is not as important as yield potential and pest resistance says Wiebold, who says seed size does not affect emergence percentage, seedling vigor, or yield potential. But he says smaller seeds have less reserves, and planting depth is more critical. More: http://ppp.missouri.edu/newsletters/ipcm/archives/fullissue/v18n17.pdf
• When soybean prices rose, did you feel more comfortable about applying fungicide to soybeans to prevent Asian rust? Or was the reason for more fungicide the fact that it has rained more in the past several years and ASR spores may have had a greater chance of survival? Iowa St. researchers believe the latter is the reason for more fungicide sprays.
• Iowa State's fungicide study found "that use of fungicide as a preventative measure can increase yields in a season when disease pressure is moderate or high. In such a season, many fungicide treatments yielded better and a few treatments increased yield over 10 bu." Read more at: http://www.extension.iastate.edu/CropNews/2008/1117yang.htm
• Foliar fungicide studies in Ohio had highly variable yields across several test plots, and treatments. Researchers recommend that foliar diseases in soybeans should be monitored at the R2 (full flower) stage to determine if fungicide applications may be profitable. They say if bean prices are close to application costs, then the application is warranted.
• Oh, you didn't know it is more rainy? That is the data collected by Iowa State weather guru Elwynn Taylor. Taylor says 100 years ago, it rained an average of 75 days per year, but that number increased to 100 days per year by the year 2000. Since 2004, Taylor says the number of rainy days in the Cornbelt has exceeded 120 days per year.
• The days may be numbered for soybean aphids. OSU researchers have piggybacked on a 2004 IL discovery of a gene that makes aphids not want a certain soybean plant. The IL gene was called Rag1, but when it was placed in soybeans grown in Ohio, the aphids were not driven off. Apparently, the Ohio aphid family was genetically different, but gene Rag2 successfully causes the Ohio aphids to migrate to other plants or die in place.
• Aphid populations in Ohio were low in 2008, predicted by a low population count late in 2007. But OSU entomologists express uncertainty about 2009 because their counts were high in the fall, yet the colonies overwintering on buckthorn are non-existent and they say they have not yet found a single egg for soybean aphids where expected.
• This is the best time of year to walk your fields and collect soil samples to determine the seriousness of your Soybean Cyst Nematode problem. The colder soil temperatures means the SCN eggs are in the cyst and they are readily countable for analysis. Today:
  1) Select a 10 acre plot to test, and walk a W or Z pattern collecting soil samples.
  2) Sample the soil with a shovel or probe about 8 inches down in 20 locations.
  3) Mix the samples and fill a one pint zip lock bag with a composite of the soil.
  4) Call your local Extension office for instructions to submit the sample without delay.
• European corn borers were unevenly distributed in 2008, say IL Extension specialists. NW IL which is usually a corn borer haven, had very few; and the southern third of the state had the most. Specialists suggest Bt corn use has been the main cause for declining populations, but heavy rainfalls are being thanked for increasing their 2008 mortality.
• Net returns to crop-share landlords, to no surprise, have increased over the past 10 years, including dips in 2001 & 2002. However, IL Extension economist Dale Lattz says net returns for 2006 & 2007 have been significantly above previous years' returns. His study of only IL farms warns, "Farmland with the highest net return per acre does not necessarily have the highest return on investment." He says future returns on crop-share farms will largely depend on corn and soybean prices and trends in the cost of inputs.
• Hog contracts based on the futures market have paid better than contracts keyed to the spot market say MO livestock economists Glenn Grimes and Ron Plain. For late Oct that represented $18.26 more per hog, and for early Nov. the difference was $31.40. They say on average, the futures market has offered a much better price since late 2007. Within the past month, they say 12-15% of producers use futures-based production contracts.

The Logan County date for Private Pesticide Applicator Training and Testing will be Tuesday, December 2, 2008. The session will be held at the Lincoln Recreation Center. Training will begin at 8:30 a.m., and testing should be concluded by 12:30 a.m. Once again, by statewide policy, there will be a $30 fee to attend the training. This is in addition to the license fee required by the Illinois Department of Agriculture. If you are interested in taking the exam only, and not attending the training session, please contact the office for the arrival time and to register separately. The other option is to take the exam by appointment in Springfield.

This session will allow training and testing for private applicators only. Attendees who successfully pass the exam would be allowed to purchase and apply restricted use products on ground they own or operate. Restricted use products include atrazine and most rootworm insecticides.

Pre-registration is required. Payment may be made at the door. Registration is limited. Online registration is also available from the home page for the Logan County site. If you are unable to attend our session, here is the web address of the entire schedule http://www.pesticidesafety.uiuc.edu/training/training.html .

• Monday's USDA crop report for Nov. was a minor adjustment pushing the corn crop 13 mil. bu. higher compared to Oct. estimates. Ethanol use of corn was raised 26 mil. bu., while feed use dropped 25 mil. bu. Exports will be 50 mil. bu. less, down to 1.9 bil., which is 536 mil. bu. less than 2007 exports. Ending stocks rose a bit to 1.124 bil. bu.
• The Nov. crop report pushed soybean production down by 17 mil. bu. and USDA cut the domestic crush estimate by 15 mil. bu., leaving ending stocks and exports unchanged. USDA adjusted state average yields slightly, pushing IN up 2 bu., IL up 1 bu., and cutting 1 bu. in MN and NE, 2 bu. in ND, OH, and WI, and 3 bu. in SD.
• Until the final report is released in Jan., IL Extension's Darrel Good says prices will be a function of So. American production prospects, the pace of consumption, and the impact on overall demand by the financial, currency, and energy markets. He says they must recover "to fuel a meaningful post-harvest recovery of crop prices." Read his newsletter at: http://www.farmdoc.uiuc.edu/marketing/weekly/html/111008.html
• There will be low stocks-to-use ratios for corn and beans in the coming year observes Chad Hart at Iowa State. He says corn ending stocks will put the ratio at 9%, well below the 15.2% average of the past 16 years, and the soybean stocks-to-use ratio will be 7%, which Chad Hart says is also below the 16 year average of 10.8% for soybeans. More: http://www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/info/info2008/S811.pdf
• To help your marketing plan, Hart says both corn and beans have price strength going into next summer. The Dec to July carry in the corn market is 42 cents, and the Nov to July carry in the bean market is 37 cents. However, he says commercial storage costs and interest will consume about all of the carry and expected basis improvement. As a result, Hart says paper ownership of the crop looks more attractive than physical ownership.
• Despite the cut in bean production, Mike Woolverton at Kansas State expects USDA to cut more in Jan. He says that will be bullish, given the potential for Brazilian soybean production estimates to also be reduced. Woolverton says farmers there are curtailing some planting because of the difficulty in getting credit to buy soybean crop inputs. Read more at: http://www.agmanager.info/marketing/outlook/newletters/default.asp .
• Woolverton also takes note of ocean freight rates, which indicates weak global demand and says they have fallen to record low levels. He says tight credit could be part of the problem since exporters may have had trouble borrowing money to buy grain and ship it abroad, as well as some reluctance to accept letters of credit from overseas banks.
• Tight grain stocks will support prices, says Extension's Alan May at South Dakota State, who says, "If demand does not fall off significantly between now and the growing season next year supplies will remain tight until harvest of 2009. These more traditional supply and demand factors still should provide a foundation for buyers and sellers even though potential price rallies and price declines could be as pronounced as the price movement in the last year." Read more: http://econ.sdstate.edu/Extension/corn.htm
• Alan May agrees with his colleagues that prices will eventually be driven by market fundamentals, "Once buyers and sellers begin to take a harder look at market fundamentals, it seems apparent that they should realize that current price levels do not necessarily reflect how strong those supply and demand fundamentals really are. If this would be the case, then one might expect a bidding war for acres to begin for the 2009 cropping year." He says it will take time to shore up the US and global economy.
• In the meantime, Alan May says farmers will find conflicting crop budgets and marketing plans, "In addition, while the cost of inputs such as fuel and fertilizer has fallen, land values/rents along with other costs may not keep pace with the current decline in corn prices. This means that it may be more difficult to evaluate breakeven and profitability due to the more pronounced volatility in input costs and corn prices."
• Cash lease provisions were loosened in the 2008 Farm Bill says MN ag economist Gary Hachfeld. Previously, direct payments had to be split between operator and landowner, but he says the County FSA committee has the authority to review a lease and payments will not have to be split, if the committee determines the flexible lease is a cash lease.
• Hachfeld says, a flexible lease under the 2002 Farm Bill that allowed base rents to be adjusted up or down by yield or price, required the direct payments to be shared because it was determined to be a shared lease. He says the 2008 Farm Bill eliminates that requirement, if the FSA committee considers it to be a "reasonable" base rent being paid.
• If you are budgeting, check out the Nebraska Extension retail price list of herbicides for 2009 along with the comparative price from 2008. About the only herbicides without a higher price are the ones just now being introduced. See: http://cropwatch.unl.edu/
• Diesel fuel prices should be lower each month for the next year, compared to that month a year earlier. That is the estimation of Kansas St. economist Kevin Dhuyvetter, based on crude oil futures. You'll pay 11 to 18% less through February, then beginning with spring tillage season, diesel prices will range 28% to 40% less than 2008 price levels.
• Corn quality is different this year because of the growing season, says grain quality specialist Charles Hurburgh at Iowa State, and he says breakage will increase, with a subsequent increase in the amount of BCFM. Hurburgh says discounts usually begin at 5% BCFM for #2 corn, and it has not been a major issue in recent years. However, he expects many elevators to be checking for BCFM this year due to breakage susceptibility.
• The increased potential for BCFM also raises another nasty issue, and Hurburgh says that is increased chances for mold that produce fumonisin, vomitoxin, and other toxins. Farmers pulling cores out of bins to improve quality, speed drying, and lower mold potential can usually sell BCFM for 50%-75% of the price of corn. Hurburgh says it can be used by ethanol plants, but farmers should not be surprised at thorough mold testing.
• Ethanol plants have seen their economics reverse, and now the DDGS co-product may help many of them keep their bottom line in the black, says Purdue swine specialist Scott Radcliffe. But he quickly adds the fact that DDGS nutritional content is different from plant to plant. He suggests future ethanol plant profitability may be keyed upon customizing DDGS for individual livestock species, since they are digested differently.
• Corn drydown rates can vary widely, depending on hybrid, but also nitrogen deficiency and drought conditions can be blamed, say Ohio State specialists. They also blame premature plant death, stalk rots, and severe stalk lodging for grain moisture variation. Find more drydown information: http://www.agecon.purdue.edu/topfarmer/update.asp .
• Winter weather should be close to normal, says Ohio State meteorologist Jim Noel. He looked back at his records for winters with minimum sunspot activity and neutral La Nina and El Nino conditions and found that temperatures will be close to normal, and trends for precipitation are near normal for the northern Cornbelt and transitioning to below normal in the southern part of the Cornbelt. Here are temperature and precipitation maps:
  1) http://agcrops.osu.edu/images/newsimages/Sunspot_Min_ENSO_neutral_Temp.gif
  2) http://agcrops.osu.edu/images/newsimages/Sunspot_Min_ENSO_neutral_Precip.gif
• Farmgate milk prices have dropped 20% in the past 2 months and IL Extension dairy specialist Mike Hutjens anticipates another $2 drop in futures prices in 2009, because of the economic downturn. He says higher feed costs are contributing to a shift from 2007 profitability to a $2.25 loss for every 100 lbs of milk produced in 2008. Hutjens says consumers have not seen any reduction in prices for milk or other dairy products.
• Hutjens suggests some cost cutting: Look at by-product feeds to lower feed costs, along with forage quality and supply. Dairy managers need to maintain high milk production which favors efficiency and profitability. Avoid making economically bad decisions such as pulling out minerals and purchased feeds from the herd's diet or feeding less.
• The swine breeding herd for both the US and Canada is down 3.7% compared to October 2007 levels, with Canada alone down 8.3%, says MO livestock economist Glenn Grimes. He says, "A good start, but with productivity growth, it is not nearly enough decline to get production in line with demand and profitably for producers."
• Regarding exchange rates, he says, "The current rate shows 8% strength in the US dollar compared to the Canadian dollar. This is not good news for US hog producers. (Southbound hog numbers increase.) However, the Japanese yen has strengthened 5% in the last month compared to the US dollar. This is good news for pork exports to Japan."

• Compared to October when investors sold commodities to raise cash, fundamentals in the grain markets seemed to have regained control. That's the thinking of Darrel Good, IL Extension Specialist, who says corn and bean prices are now influenced by financial, energy, and currency markets, as well as export business. Read his latest newsletter at: http://www.farmdoc.uiuc.edu/marketing/weekly/html/110308.html .
• Good says soybean exports have been 14% larger than year ago levels, with the help of a 16% increase in business with China. However, the bloom may fade since Chinese purchases are expected to be less than last year, and US soybean exports are expected to be 12% less than last year, by the time the year ends. While corn exports have been weak, prices have responded to USDA's reduction in 2008 corn production estimates.
• Monday Nov. 10 is the date for the next USDA crop production report, which Darrel Good says will refine yield estimates. Based on the last crop condition report, Good says beans should average 42.7 bu. ave., 3 bu. more than the USDA Oct. estimate. He says the last rating for corn indicates a 154.4 bu., compared to USDA's 153.9 bu. estimate.
• If USDA's crop estimates grow, Good expects a slow recovery in grain prices. But, a lower production estimate would support prices somewhat. He says to get a stronger recovery, then financial and energy fundamentals will have to create additional demand.
• Regarding energy fundamentals, Iowa State's Chad Hart says the ethanol industry is still growing, but the pace has slowed. While lower corn prices mean lower production costs for ethanol plants, plants are also impacted by lower ethanol prices because the motoring public is driving fewer miles, has more fuel efficient cars, and needs less fuel.
• Chad Hart says ethanol will need 4 bil. bu. of corn, and livestock feeders will need 5.3 bil. bu., which is up 100 mil. bu. from September. He says the reason for the increased demand is due to the erosion of corn prices, and that reversed USDA's demand estimates. http://www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/IFO_2008/ifo110108.pdf
• Fear not, agriculture is not facing a return to the tough times of the 1980's, say Purdue economists Mike Boehlje and Chris Hurt. That is when high prices in the 1970's quickly changed to a recession and a myriad of farm failures. They say the difference is the current very low interest rates, along with very low debt being carried by farmers. Read more at: http://www.agecon.purdue.edu/news/financial/crisis_return_80s.pdf .
• The Purdue economists make a number of comparisons of now and the 80's economy:
  1) In the 80's farmers had $22 of debt for each $100 in assets, and today debt is $9.
  2) Before the 80's farm income averaged $51.8 bil. per year, now it is $63 bil. per year.
• But what about tomorrow? The Purdue economists say even with lower incomes, fewer debt servicing and loan default problems are expected. That means fewer forced sales of farmland, but the first stage of a downward adjustment is no sales, and they say that is happening now. But they say, "The prospects of forced farm asset sales compounding the asset depreciation problem are much less likely now." (Compared to the 1980's)
• If farm input suppliers are asking for pre-payment before supplies are ordered and delivered, Penn State Extension specialist John Berry suggests farmers consider the risk:
  1) Spread risk by buying inputs in increments, so if prices decline you can take advantage
  2) Be certain of the solvency of the company with whom you are doing business.
• Calling the 2008 growing season, "on-and-off, unevenly distributed poor conditions," IL Extension specialist Emerson Nafziger is amazed at the 45 bu. bean and 177 corn yields, and says, "The only reasonable explanation for such yields is that the season was much extended, with maturity occurring weeks to a month or more later than average, and a great deal of grain filling after September 1, during the weeks before maturity."
• Nafziger admits, "The predictions I made in June about how crops would respond to late planting were completely inaccurate as a result of the unusual season." And he says that is a dilemma because, "If such a season will never happen again, then including it in the database means less accuracy in future predictions of planting date effects."
• Corn kernels are different this year, according to Iowa State grain quality specialist Charles Hurburgh. They are wet, soft, and have more soft white starch. That means lower test weight, and reduced storability because of more opportunity for mold to invade the kernel. He says you will also find that it takes more energy to dry softer corn kernels. Read more at: http://www.extension.iastate.edu/CropNews/2008/1105hurburg.htm .
• By taking 8 to 10 percentage points of moisture out of the corn, Hurburgh warns if you are drying it with heat the kernels will become brittle, more sensitive to breakage, and the amount of fines will increase. The breakage will occur when it is handled, from the dryer to the bin, and out of the bin to the elevator. He says avoid corn temperatures above 140F, and let it cool slowly in a bin, instead of in the dryer, increasing dryer capacity.