farmgate: Extension Update
Extension Update is a weekly summary of news from Extension, government, and other attributable sources, focused on marketing, farm management, and other issues that are of interest to Midwestern farm owners and operators.
The US average farm price for old crop soybeans will be near $5.65, says Extension Marketing Specialist Darrel Good, which is about $.25 higher than would be expected based on the size of the US and world surplus. Most of the unexpected price strength has been generated by soybean oil prices, and that is a function of growing biodiesel demand. Read his newsletter.
Darrel Good’s quarterly summary suggests soybean consumption has been healthy in the past year. “If crush is following an average pattern this year, the total should reach 1.707 bil. bu., about 11 mil.above last year’s crush and about 7 mil. above the record crush of 2001-02. The estimated June crush reported by members of the National Oilseed Processors Assn. suggests that the domestic crush is proceeding a bit more rapidly.”
Soybean exports began the year slowly, says Darrel, but have picked up. “Since early May, however, export sales have been larger than expected and have exceeded those of last year, due in part to strong Chinese demand, a smaller than expected Brazilian crop, and delays in shipping Brazilian soybeans.” He says exports will exceed 905 mil. bu.
Watch the weekly crop ratings. Extension’s Darrel Good says a good to excellent rating of 54% projects to an average yield of 41.2 bu. per acre. The USDA calculates trend yield at 40.7 bu. The portion of the crop rated good or excellent will have to decline to about 51% to point to a trend yield. A trend yield would produce a crop of 3.01 bil. bu.
Based on the futures market new crop beans will average near $6.00 for the coming year, says Darrel Good. But he expects price deterioration if crop ratings point to a trend yield, or at the least a very weak basis. He says, “Longer term, there is some expectation that US producers will plant more corn and fewer beans due to demand. If that is the case, South American producers will have to expand production. Increasingly, soybean prices will be determined by the price required to encourage production in Brazil.”
The corn basis will deteriorate, but marketing opportunities will improve, says Darrel. “The large carry in the market also makes storage of the 2006 crop look attractive. In central Illinois, for example, the harvest bid on July 19 was $.67 under July 2007 futures price. That large basis implies a large return to storage, depending on the magnitude of basis next spring. At a historical level of $.10 under in May, the market would be offering $.57 to cover interest and storage costs.” Read his quarterly corn market summary.
Darrel Good believes corn exports will possibly surpass USDA expectations; a trend yield is attainable, but critical weather remains ahead; feed use will be supported by livestock profitability and expansion; and 2007 corn acreage will increase over 2006.
Growth dominates the cattle market, says Purdue Livestock Specialist Chris Hurt, “Given the dismal financial performance for feedlot cattle so far this summer, there was an anticipation that placements would be down about 1 percent. However, USDA reports June placements rising 10% above year-previous figures.” Which was a surprise.
Beef demand has held well this year with supplies 7% higher and prices only down 3%. Chris Hurt says, “Finished cattle prices will likely trade lower, into the higher $70s, for the end of the summer. Prices are expected to recover into the lower-to-mid-$80s by fall, with prices somewhat above the mid-$80s by the end of the year.”
Bean leaf beetles are expected to create havoc soon. When soybean leaves grow old, they will make their way to pods, where soft tissue appears. Although they will not eat clear through the inside pod wall, their scars are excellent places for disease to breed. A rescue treatment is warranted with 5-10% of pods damaged and 10 beetles per row foot.
Two soybean diseases are afoot. Sudden Death Syndrome is caused by the fusarium fungus, as indicated in the pest bulletin. Also, bacterial blight is being found in some locations, which also defoliates the soybean plant. Compare your soybeans with the pest bulletin.
Time now to visit Midwest Extension Specialists to find out about seasonal pestilence:
Illinois: A lot of corn rootworm damage with lodging apparent, and adults are moving to soybeans to lay eggs. Soybean aphid numbers are increasing, but densities remain low.
Iowa: Drought conditions are prevailing. Aphids are present in all bean fields. Minimal lodging caused by corn rootworms, but plants are wind damaged. Historically large densities of bean leaf beetles. Large densities of potato leafhoppers are in alfalfa.
Kansas: Soybean aphid numbers are low. But sunflower head moths are populous.
Kentucky: 2006 has been a slow insect year. Only one report of a soybean aphid.
Michigan: Large numbers of adult corn rootworms, and corn has begun to lodge. Soybean aphid densities remain small and the winged versions have not been found.
Minnesota: Drought conditions prevail. Aphid densities are large in soybean fields but do not seem to be increasing. Some soybeans have been infested with two spotted mites.
North Dakota: Drought conditions prevail. Cutworms and weevils have hurt alfalfa crops. Aphids have been troublesome in many crops, with numbers still large.
Ohio: corn rootworms are causing some spotty problems. Soybean aphid numbers remain small. Alfalfa fields are turning yellow from potato leafhoppers.
Your summer checklist may include brush control. Although President Bush is shown doing it by hand during his Texas ranch vacations, chemical control is also an alternative you may want to consider. A wide variety of chemical applications are described on the U of IL Pest Management website.
Posted by Stu Ellis on July 28, 2006 06:41 AM to farmgate