Loan rate? PCP? What are they? How soon we forget! With a glut of corn and beans coming out of the field, local cash prices have fallen to the levels of the seemingly distant past when we checked LDP's daily. It is time to reminisce and refresh your memory.

Darrel Good says the relevant pricing alternatives to consider are influenced by a number of factors, including the portion of the crop already priced, the magnitude of storage costs, the relationship between the local cash price and the posted county price, the magnitude of price premiums for later delivery, the willingness to use futures and options contracts, and the general outlook for post-harvest price direction.

His alternatives are at: www.farmdoc.uiuc.edu/marketing/weekly/html/092004.html
1) Collect LDP (loan rate minus PCP) and sell over the scale for cash.
2) Store grain unpriced, with loan rate protection minus storage & drying charges.
3) Collect LDP & store grain unpriced, but storage costs reduce LDP benefits.
4) Store grain unpriced, lock in LDP rate, but if LDP not taken, loan can be taken out.
5) Collect LDP, and sell for 05 delivery if forward price premium pays storage costs.
6) Forward price or hedge, wait for LDP to increase, and collect LDP at that time.
7) Collect LDP, sell or forward contract, and replace cash with futures or call options.

With beans still above the loan rate, Darrel suggests a different marketing plan:
1) Soybeans can be sold at harvest, since elevator prices exceed the loan rate.
2) Forward contract for future delivery, if the premium gained exceeds storage costs.
3) Store unpriced, and either collect LDP if it is available, or keep loan option open.
4) Call option premiums are expensive, but provide protection if prices decline further.

Watch out for hidden problems. Darrel Good recommends that producers become familiar with the rules associated with the CCC loan program. In particular, the criteria for establishing beneficial interest, the procedure for establishing multiple loans, and the rules for determining the order in which loans are repaid should be reviewed.

Current trade talk is bearish. Corn has made new contract lows for 10 consecutive days (as of 9/23). Basis continues to fall (IL-IA LDP's at 30-cents) with traders expecting 11.3 Bil. bu. crop and DEC futures under $2. "Best ever" yields may push carryout to 15%. Traders are also forecasting NOV beans at $5 as they nudge loan rate territory. A marketing loan mentality with higher stocks will push long term soybean values lower.

Collect your LDP from your combine cab if you have a laptop and a wireless modem, or wait until you get home that night. FSA will set you up for e-mail LDP. Fill out form CCC-634-E at: www.sc.egov.usda.gov or your FSA office. The eAuthentication Level 2 access can be completed at: www.eauth.egov.usda.gov. One FSA office visit is needed.

Counter-cyclical payments are expected to be available, after USDA calculates them based on projections from the Oct. 12 crop report. The counter-cyclical payment equals the counter-cyclical payment rate times 85% of the base acreage times counter-cyclical payment yield. The counter-cyclical payment rate is the amount by which the corn and bean target price exceeds its effective price. The effective price equals the direct payment rate plus the higher of: (1) the national average market price received by producers during the marketing year for the commodity, or (2) the national average loan rate for the commodity. The first CC payment will be 35% of the estimated amount for the year.

If you had SDS problems in your soybeans this year, join the growing club. U of I and SIU researchers say the problem this year was similar to the severe year of 1997. Expert Glenn Hartman said the high incidence of SDS in the survey is likely related to the cooler than normal temperatures and wetter conditions during the current growing season.

11,000 down and 5,000 to go, but U of I geneticists looking for soybean varieties without the protein that causes some infants to be allergic to soy baby formulas have found one, and 91 others with reduced allergenic tendencies. The lack of the gene does not compromise the soybean nutritional quality. The next step will be to transfer the trait that suppresses the protein into a high yielding, disease-resistant soybean cultivar.

Manure application is going high tech with a GPS-aided system which not only tracks flow rates and where it is has been applied for record keeping, but can turn the spreader off if you are nearing a well site. Extension ag engineer Jay Solomon said such a system will help defend against complaints, and may also be useful for chemical application.

Ethanol advocates say California has been using ethanol as it's exclusive oxygenate since 1/1/04 and that state has exceeded ozone pollution standards the fewest number of times in a decade in every major city in the state. They compare it to the MTBE era.

"Home Grown" is the name of a new pro-ag effort in Washington, composed of AFBF, and corn, cotton, rice, soybeans, sugar and wheat trade associations which are all pushing to keep farm programs in place. They say US farmers have depended on USDA for over 25% of their income in the past 15 years and for 41% of their income in the past 5 years.