A weekly publication of University of Illinois Extension, Oct. 13, 2006, Vol. 8 No. 25

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• Surprises came Thursday when USDA released its October Crop Report pushing corn production down and soybean production up, relative to its September Crop Report. The market was looking for crop production estimates higher than the USDA report provided.
• The 2006 corn crop was estimated at 10.905 bil. bu., down 2% from 2005. The yield was projected at 153.3 bu., second only to 2004. Because of the drought in many areas, USDA reduced harvested acreage to 71 mil. acres, 5% below the 2005 corn acreage. Feed will use 6.100 bil. bu, exports will need 2.250 bil. and 2.150 bil. for ethanol.
• Looking at state statistics, USDA estimates IA will have a 168 bu. average on 2.083 bil. bu. production. IL has a 171 bu. corn yield with 1.906 bil. production. The NE yield will be 161 bu. with 1.247 bil. production. MN has a 166 bu. average on 1.128 bil. bu.
• Total corn production will be down 209 mil. bu. from Sept. on less acres and lower yield. USDA cut harvested acres 794,000 with the biggest reductions in IL, NE, and OH. USDA cut beginning marketing year stocks by 41 mil. bu., and put ending stocks at 996 mil., a crop of 225 mil. bu. Feed use was lowered 25 mil. bu. reflecting higher prices and the smaller crop. The marketing year price was raised 25¢, to a range of $2.40-2.80/ bu.
• The 2006 bean crop was estimated at 3.189 bil. bu., up 4% from 2005 to set a new production record. The average yield was projected at 42.8 bu. USDA said late summer rains helped the soybean crop in the central and northern Cornbelt, raising yields in most states. USDA expects 74.5 mil. acres will be harvested, which is up 5% from 2005.
• Looking at state statistics, USDA projects IL will have a 51 bu. average yield with a 512 mil. bu. crop. IA as a 50 bu. average yield and a 502 mil. bu. crop. The MN yield was estimated at 42 bu. with a 304 mil. bu. crop. IN has a 289 mil bu. crop on 51 bu.
• Total soybean production was raised 96 mil. bu. from Sept., with the help of better yields and more acreage than previously thought. Since USDA lowered the volume of soybeans carried into the marketing year, that only raised the ending stocks next Aug. to 555 mil. USDA raised exports by 20 mil. bu. and domestic crush by 10 mil. bu. The season average price for beans was left unchanged from Sept. at $4.90-5.90 per bu.
• So, how accurate is the Oct. report? Univ. of IL specialist Darrel Good says in the past 5 years, the Oct. report has been with 1.2% of the Jan. final report for corn and 2.1% of the Jan. report for beans. Darrel says the accuracy is achieved by more and better crop measurements, in addition to having the benefit of FSA certified acreage to review.
• Darrel Good says the Oct. report is overshadowed in the market by strong exports, more corn being used for ethanol, and expansion of soybean oil use for biodiesel production. He says the marketing year low is probably in for corn, but probably not yet for soybeans. Read his newsletter: http://www.farmdoc.uiuc.edu/marketing/weekly/html/100906.html .
• Extreme volatility in the wheat market preceded the report, and Kansas State specialist Mike Woolverton said USDA confirmed the market's fears about declining wheat supplies. Global stocks will drop to the lowest in 25 years, and Woolverton says USDA is now estimating the average farm price for wheat between $4.10 and $4.60 per bu. Read more: http://www.agmanager.info/marketing/outlook/newletters/default.asp .
• Drought and poor pasture conditions caused more aggressive cattle culling this summer, says Kansas State specialist Jimmy Mintert, who says the July-Sept. quarter slaughter was 31% above 2005; but he doubts that herd expansion has shifted to herd liquidation. Mintert says steer slaughter is up 5.1%, but heifer slaughter is down 0.4%, meaning producers have been aggressively culling cows while holding back more heifers. Read more. http://www.lmic.info/memberspublic/InTheCattleMarket/cattlemarkets.pdf .
• El Nino is the great temperature moderation force for the Midwest, says Iowa State meteorologist Elwynn Taylor, who adds some winters with El Nino are actually warm, but none have been bitterly cold. "Precipitation tends to be a bit on the moist side but it is the moderate temperature that makes the difference in heating/cooling bills and crop yields." He says there are other seasonal factors that may overpower the effect of El Nino this fall, but he thanked it for keeping hurricanes at a low ebb this storm season.
• The check is in the mail, or FSA may soon be transferring it electronically to bank accounts of producers who will receive another 7¢ from counter-cyclical payments. The total payment for the 2005 corn crop is 35¢, and most producers have previously taken 28¢. Direct payments for corn will also be distributed, but soybeans have not earned CCP payments because prices have been too high. Address questions to FSA offices.
• No answers today, but in due time, from Univ. of IL researchers looking at consumer reactions to agricultural crises, such as mad cow disease or bird flu, which will help decision makers work either through the media to calm the populace, or decide if a product recall is necessary. They are building an economic model that includes foreign consumer decisions, as well as other disciplines, such as engineering and medicine.
• "Custom-designed end effector" is what Univ. of Il ag engineers call it, but you would label it as a mechanical weed killer. It is a solar-powered robot with 20/20 vision that travels row crops looking for weeds. Its software can identify non-crop plants and "effect their end" by cutting open the weed tissue and applying herbicide. The device also has a top of the line computer to record what it is doing and report to you over the Internet.