A weekly publication of University of Illinois Extension, Oct. 12, 2007, Vol. 9 No. 25

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• USDA's October Crop Report nudged 2007 corn production higher to 13.318 bil. bu, up from 13.308 bil. in Sept. The change results from a new acreage estimate of 93.6 mil planted which is up from the 92.888 mil. acre estimate released at the end of June. But USDA also reduced the average yield estimate to 154.7 bu. from the 155.8 bu. in Sept. The market was looking for a production estimate ranging from 13.232 to 13.600 bil. bu.
• USDA's October Crop Report reduced the soybean production estimate to 2.598 bil. bu. down from the 2.619 bil. estimate in Sept. and compared to the trade estimate of 2.648 bil. bu. The lower production estimate was calculated with a new acreage estimate of 63.699 mil., compared to 64.081 mil. estimated in June. Ave. yield remained at 41.4.
• The October Supply and Demand Report lowered the corn use to 12.640 bil. bu. which raised the carryout to 1.997 bil. bu. at the end of next August. USDA reduced feed demand by 150 mil. bu. reduced ethanol use by 100 mil. bu., and reduced exports by 150 mil. bu. The average seasonal cash price was raised 10¢ to a range of $2.90 to $3.50.
• The October Supply and Demand Report rebalanced its soybean estimates. With less 2007 production, USDA adjusted beginning stocks upward and calculated 2.962 bil. bu. total supply, compared to the 2.964 bil. Sept. estimate. Aug. 2008 ending stocks remained at 215 mil bu. Cash prices were raised 50¢ to a range of $7.85 to $8.85.
• Other notes from today's USDA October Crop and Supply and Demand Reports:
  1) The 86.1 mil. corn acres estimated for 2007 harvest will be the most since 1933.
  2) Ear counts in IL, IN, IA, NE, and WI surpasses the 2004 record.
  3) Overall, soybean pod counts are lower in 2007 than in 2006 for the Cornbelt states.
  4) Compared to 2006, pod counts are up in IA, MN, & NE; down in IL, IN, OH, & MO.
• Corn prices are high, relative to history says Michigan State's Jim Hilker. "The market is still saying it will pay storage for 2007 on-farm stored corn, as shown by the basis and the spreads between futures going out through July. This is not saying the market will go up, but the rated basis will strengthen more than enough to pay for on-farm storage."
• Soybean prices are high, regardless of basis problems, says Hilker. The market appears to want to pay storage into Jan., then puts the brakes on. The problem with trying to take advantage of the storage opportunities is the unpredictable basis we have seen since Mar. However, if you have unpriced soybeans, and have adequate on-farm storage, consider some hedges or H-T-A's to try and take advantage of the weak basis. I suspect the worse you will do is breakeven, and if the basis corrects itself, there may be a nice return."
• "Wheat prices appear to have peaked at least for now," says Extension's Darrel Good, but he says prices may remain generally high and very volatile until 2008 crop prospects are better defined. http://www.farmdoc.uiuc.edu/marketing/weekly/html/100807.html .
  1) US wheat seeding is about 60% complete, with more soft wheat acreage expected.
  2) So. Hemisphere producers will plant based on No. Hemisphere acreage reports.
• Darrel Good says yields will be as important as wheat acreage, since world average yields have ranged from 39.3 to 42.8 bu. "A modest increase in world wheat acreage and yields near the low end of recent experience would point to the need to ration wheat consumption in 2008-09, while a larger acreage increase and yields near the upper end of recent experience would allow some rebuilding of world inventories," says Good.
• A good wheat crop begins with a good stand says Kansas St. agronomist Jim Shroyer, "If you planted 90 lbs/A in 7 ½-inch rows, for example, you could expect to have about 11 to 13 plants per ft. of row, depending on seed size. If you planted 60 lbs/A in 12-inch rows, you could expect an emergence of about 14 seedlings per ft. of row," he said. He gives emergence tips: http://www.oznet.ksu.edu/news/sty/2007/wheat_stand100407.htm
• Despite bickering among trade negotiators, Univ. of IL trade specialist Bob Thompson says consensus has been reached in the World Trade talks, "to ban agricultural export subsidies and to reduce import tariffs and domestic support linked to the production of specific commodities. While there is still some disagreement concerning the depth of the cuts and how many exceptions should be allowed for politically sensitive commodities, the differences are narrowing rapidly." He says an agreement this year is possible.
• The Farm Bill is an opportunity to address trade issues, says Bob Thompson, but he says, "The House farm bill sends a message to the rest of the world that the US is not very serious about the trade negotiations. In fact, the House action is seen by the rest of the world as yet another example of the US arrogance and unilateralist approach when it comes to international relations." He says it creates trade problems in 5 different areas.
• "The same old thing," is what Purdue trade specialist Allan Gray calls the House proposal, but he says the Senate is making changes in pocketbook issues. He says direct payments may be cut slightly, specialty crops will be allowed on acreage previously reserved for program crops, and the ceiling will be lowered on farm program payments.
• Are farmland prices in line with returns to farmland? IL Extension Specialist Gary Schnitkey says that depends on the capitalized value of the land, which is driven up by either higher cash rents or by lower interest rates. Read his capitalization analysis at: http://www.farmdoc.uiuc.edu/manage/newsletters/fefo07_15/fefo07_15.html .
• Schnitkey's contention is that "While farmland prices exceed capitalized values currently, likely increases in cash rents will bring farmland prices and capitalized values more closely in line with historical average difference. It is not likely, however, that increasing cash rents will cause farmland prices to equal 1.07 times capitalized values, the historical average from 1986 through 2004." He says, "Either a new relationship between farmland prices and capitalized values exists where farmland prices exceed capitalized values by a large margin, possibly caused by urban sprawl, or growth in farmland prices must slow so that capitalized values catch up with farmland prices."
• Blue eye mold can over-winter in your stored corn, says Purdue's Dirk Maier. "Blue eye mold can grow at lower moisture contents and may stay in the grain even after it's been cooled. When temperatures become warm in the spring the mold can continue to grow and create problems that can result in quality discounts at the time of sale." He says removing some grain from each bin will pull out the center core with fines and molds.
• Soybean aphids might be a rarity in 2008, if Ohio State analysis holds true. Bug folks there have been finding only small colonies preparing to over-winter, "The significance of these low numbers point to the possibility that, even though we did not have the large populations anticipated this past summer, we might still be in for a low aphid year in 2008." But before coming to conclusions they want to hear from other states.
• Kill off some SCN this winter by eradicating winter annual weeds that play host to the cysts until 2008 soybeans arrive. Winter hosts include: Purple deadnettle (strong host), Henbit (strong host), Field pennycress (moderate host), Shepherd's-purse (weak host), Small-flowered bittercress (weak host), and Common chickweed (weak host).
• Corn stalks are not very palatable, but crop residue provides grazing options where forage is tight. Ohio State Specialist Jeff McCutcheon says 1 acre of corn residue will provide enough for a 1,000 lb animal for up to 2 months. The animal will begin with the grain, and husks, then resort to cobs and stalks. He says stalks have a 60 day limit. Read more on crop residue and stover nutrients at: http://fairfield.osu.edu/ag/beef/beef.html .
• Selling "pre-conditioned" calves nets an additional return of $23.50 per head according to an Oklahoma State study: sickness declined from 36.4% to 9.2%, death loss decreased from 4.3% to 1.5%, average daily gain increased from 2.6 to 2.9 pounds, and percent grading USDA Choice increased from 36% to 50% for precondition calves versus non preconditioned calves in Texas feedlots. Info: http://cattlemarketanalysis.org/index.html .
• Time for soil testing, managing fertility, and IL Extension's Mike Roegge says it takes $50 to maintain P & K for 175 bu. corn. He says a corn-soy-wheat rotation can use 40 lbs of P, but lower that by 10 lbs if the rotation is only corn-soy. Potassium soil test levels of 240 lb/A (on high CEC soils) will provide 95% of optimal yield for all crops.
• Don't guess your limestone needs says IL Extensions Jim Morrison, but take a soil test every 4 years. In a cash-grain system a pH of at least 6.0 to 6.5 would be suggested. With alfalfa and clover in the rotation, the pH needs to be at least 6.5, preferably closer to 7.0. He says liming enhances nitrogen fixation and may improve soil structure and tilth.
• Mark your calendar for the IL Crop Protection Technology Conf. on Jan. 9 & 10 in Urbana, IL. The focus will be on high production corn and soybean management, nutrient management and water quality, pest resistance management, and IPM.