A weekly publication of University of Illinois Extension, Sept. 28, 2007, Vol. 9 No. 23

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• USDA's Quarterly Grain Stocks report Friday morning indicated the last marketing year ended with 1.303 bil. bu. of corn on hand, a 34% decline from levels a year ago. However the usage rate of 2.231 bil. bu. was much less than what the market expected.
• USDA's Quarterly Grain Stocks report released today indicated soybean carryout at the end of the last marketing year was 573 mil. bu. That means a use of 518 mil. bu. use of beans throughout the last quarter, less than the trade expectation of 555 mil. bu.
• USDA's Quarterly Grain Stocks report for wheat indicated we have 1.727 bil. bu. on hand, which was less than the market expectation of 1.835 bil. bu. The current wheat stocks were also less than the 1.751 bil. bu. that USDA reported at this time a year ago.
• The USDA's Small Grains Summary today reported less expected production for the current year, which was characterized as bullish to the market. Wheat production is now forecast at 2.07 bil. bu. in the 2007-2008 crop year. USDA reported that production of hard red winter wheat is expected to increase, but other classes will drop in production.
• Soybean marketing #1. Purdue University market outlook specialist Chris Hurt says, "Add a dollar a bushel during storage season which will push prices into the $9-$9.50 range and if there are growing problems in South America and export demand from China is stronger, we could see double digit soybean prices up in the $10 range."
• Soybean marketing #2. Missouri marketing specialist Melvin Brees says storing beans is more risky than corn. "In spite of weak basis, current soybean cash bids are well above the top end of the USDA's projected price range. This suggests that, if storage space is limited, storing corn would be favored over storing soybeans. If soybeans are stored, with limited futures market carry, it appears that capturing basis gain is a primary objective."
• Soybean marketing #3. Iowa State marketing specialist Bob Wisner says, "No one knows how high soybean prices will have to rise to encourage enough production to meet market demand. With a near normal growing season in So. America, it would not be surprising to see soybean futures prices reach a peak sometime between now and Feb."
• Soybean marketing #4. University of Illinois marketing specialist Darrel Good says, "The pricing and storage decisions for the 2007 soybean crop are being influenced by the current high price, the weak basis, and the availability of storage." Alternatives are:
  1) The weak basis suggests storing the crop to capture a post harvest basis strengthening.
  2) Hedging allows you to benefit from basis improvement and to capture current prices.
  3) Unpriced storage allows you to capture a higher basis, but at the risk of lower prices.
• Which crop do you store? Darrel Good says, "The weak basis and large carry in the corn market make storage of that crop attractive. In cases of limited storage capacity, producers may need to examine the relative returns to storing soybeans and corn. In central IL, the net return to corn storage, as measured by potential basis improvement, exceeds that of soybeans due to the high interest opportunity cost of holding soybeans."
• Futures will pay about 5 cents a month to store corn, says Jim Hilker at Michigan State. "That pays for on-farm storage, but does not pay for commercially stored corn. Those who do not have on-farm storage and still have unpriced 2007 corn should watch for pricing opportunities from now through harvest." Hilker says consider a basis contract, selling cash and buying futures or a call option, a minimum price contract, or a min-max contract. He tells farmers with on-farm storage to keep the basis open as long as it pays.
• Cash wheat prices are slightly above $8.00/bu now, says Michigan State's Hilker, so how can you go wrong selling some or all of your crop? The hard one is pricing your expected 2008 wheat crop. When you see the bids, think further back than today. July 2008 futures at $6.70 look very good historically, but not next to Dec 2007 at $9.33.
• If you have not yet ordered seed corn for 2008, you're smart, says Purdue's Bob Nielsen, because test plot data is important. "Seed selection is important and should not be based on advertising or a sales pitch, but on yield performance. I encourage folks to not be afraid to use the prior year's yield trial information and look for hybrids that performed well because it really comes down to consistency of hybrid performance."
• Protect your valuable stored corn in the bin, says Doug Johnson at KY, who provides several tips at: http://www.uky.edu/Ag/CornSoy/cornsoy7_8.htm#2 .
  1) Operate combine to minimize grain damage, trash and fines.
  2) Store corn at 15, 14 or 13% moisture when holding for 6, 9, or 9+ months respectively.
  3) Apply a protectant to the grain, but only after drying and cooling.
  4) Only apply a "cap out" treatment to the grain surface, but not if a protectant is used.
• If stored grain is over 50 degrees, insects will be feeding and reproducing immediately, says ND entomologist Janet Knodel. When grain temperatures exceed 50 degrees, bins should be inspected for insect activity every two weeks. Stored grain insect pests generally are inactive below 50 degrees. Use a grain probe to determine what species of insect pests are infesting the grain and the extent of infestation within the grain mass.
• USDA has not officially announced when the pilot program will begin or other details, but Monsanto reports farmers who use certain stacked trait biotech hybrids will be eligible for a 24% premium discount on crop insurance if they farm in IL, IN, IA, or MN, and purchase a minimum of 75% of their seed with those traits. The 20% biotech refuge is still required, says Monsanto, but USDA has not yet released any information.
• If dandelions are a problem in no-till or alfalfa, consider a fall herbicide application, say WI researchers, "The perennial nature of dandelions is a management challenge. Unfortunately, established dandelions are not consistently controlled with burndown applications of glyphosate or 2,4-D in the spring. The WI weed specialists evaluated 17 alternatives: http://ipcm.wisc.edu/WCMNews/tabid/53/EntryID/375/Default.aspx .
• Control winter annuals with a systematic approach says Mark Loux at Ohio State:
  1) Overwintering weeds interfere with crop establishment and early-season growth
  2) Prevent seed production by these weeds, which reduces future weed infestations.
  3) Effectiveness of the treatment is important – speed of control is not.
  4) Combinations of two herbicides are usually more effective than any single herbicide.
  5) Herbicide recipes and application tips are at: http://corn.osu.edu/ .
• Without winter annuals, black cutworm moths will have reduced locations to lay eggs, say Ohio State entomologists, and their larvae will have a reduced advantage in attacking new corn plants in the spring. The Extension specialists add, "With the various seed treatments not providing acceptable management of black cutworms, eliminating weeds is an excellent preventive tactic to begin your corn insect management for 2008."
• Asian soybean rust continues to spread, but because of the maturity of the soybean crop, plant pathologists say soybean rust will be a non-issue in the Cornbelt in 2007. Among the latest confirmed rust spots are in deep southern IL, and across the Ohio River in western KY, along with spots in MO and KS. Consult: www.sbrusa.net for updates.
• The last Cattle on Feed report revealed about 3,000 more head on Sept. 1 compared to Aug. 1, much less than the typical seasonal increase seen in inventory numbers, says NE livestock economist Darrel Mark. "The data continue to support the trend towards a feeding advantage in the northern states (IA, SD, and NE) relative to southern plains states brought on by the availability of ethanol byproducts and cheaper corn."
• Animals do not require specific feeds, they require nutrients, say Ohio State Extension specialists, who add, "If the value of nutrients can be determined then the value of a feed can be calculated by summing up the value of its nutrients. The value of nutrients can only be determined using market prices and those constantly change." Their decision aid at www.sesamesoft.com calculates the value of nutrients based on current feed prices.
• Cow-calf operators will want to attend an 11/28 conference in Springfield, IL, to learn feed alternatives to high priced hay and corn. Topics include storage, handling issues, and timely buying of co-products; using co-products in growing and backgrounding diets; cow and heifer rations using co-products; utilizing co-products in finishing diets; early weaning and feeding co-products; and new co-products from corn dry-grind ethanol production. $18 fee includes materials. Register by e-mailing: dseibert@uiuc.edu .
• In the haste of harvest, MO ag engineer Bill Casady reminds farmers that combines and tractors have to breathe just like people, and with the dust generated in harvest air filters will clog quicker than any other time. "A dirty air filter starves the engine of air and leads to poor performance, poor fuel efficiency, and increased emissions." Gasp!