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.

Tight storage space? IL Extension’s Darrel Good says new corn and beans will share space with other fall crops, 2007 wheat, and all of the 2006 crop being carried over:
1) USDA says the 9/1 stocks of corn, beans, and sorghum will be about 1.75 bil. bu.
2) The 9/1 stocks of wheat, oats, and barley will be about 2.16 bil. bu.
3) USDA estimates the new crop of corn, beans, and sorghum will be 16.154 bil. bu.
4) So, 2007 stored grain will total 20.064 bil. bu.; 1.518 bil. larger than the 2006 crop.

The largest previously stored crop was in 2005 says Outlook Specialist Darrel Good, which was 19.288 bil. bu., or 4% less than the 2007 crop to be stored. He says more bins are added every year, and last Dec. 1 the total capacity was estimated by USDA at 20.347 bil. bu. Good believes if the current rate of construction of on-farm and off-farm storage parallels 2006, total 2007 storage capacity should exceed crop supplies by 675 mil. bu.

Local storage problems will contribute to the already historically weak basis, says Good. “With a $.32 carry from December 2007 to July 2008 futures, the average harvest bid is $.775 under July 2008 futures. It appears that the market is currently offering about $.60 per bushel to store corn from harvest to June in this region of the country.” Read more.

Is storage in your marketing plan? Michigan State’s Jim Hilker says move out old crop corn on any market rally, then store as much as possible of the new crop unpriced, on-farm, especially if you have already priced much of the new crop. For those without, or without enough, on-farm storage for corn, consider waiting for larger rallies, relative to the mid-August corn price, to price much of the 2007 expected corn production.”

Hilker’s soybean advice parallels corn. “$7-8 soybeans were just a dream a year ago. Now it appears we will have several years at these levels, with more upside potential than down, as long as the present energy policies stay the same. For those with remaining old crop soybeans consider pricing them on rallies before harvest. For those who may still want to price more 2007 crop before harvest, consider the same. Cash prices moving back towards $8.00 would appear to provide some really good pricing triggers.”

Soybean supplies will be much tighter in the year ahead says Iowa State’s Bob Wisner. “However, for soybeans, recent rains and the potential for slightly increased US yields in later crop reports point to modest down-side risk in soybean futures and cash prices into the harvest season. With recent failures of the soybean futures delivery mechanism, prospects for the soybean basis at harvest time are uncertain,” says Wisner.

Total use of US soybeans in the marketing year ending next Friday is expected to be about 3.07 bil. bu. Even with a 3-7% decline in 2008 exports, Wisner says production would cut next year’s ending carryover stocks 61-67% from the 2007 high. Declining exports very likely would require a sizeable increase in the So. American soybean crop.

Market volatility can be expected this winter in corn and beans predicts Wisner, as they compete for land in 2008 and 2009. Although bean stocks will be low, he says ethanol expansion will demand corn acres, and $6-7 wheat will also get its share of acreage. Read his newsletter.

The 2008 soy:corn ratio has recently been at 2.25:1 says Ohio State’s Matt Roberts. “In Jan/Feb 2007, new crop corn averaged $4.08 and beans averaged $7.96, for a ratio under 2:1, which led to a loss of 11.4 mil. acres of soybeans and a gain of 14.6 mil. acres of corn. Many analysts are already predicting that corn will lose up to 2 mil. acres in ’08.”

Roberts’ take on the bean market is bullish. “While soybean prices have rallied this summer, the fall in the US Dollar has offset some of those gains. At this point, it appears that South American plantings will rise 5% or less over last year, which is unlikely to significantly alter the balance of the global soybean market.” Read his newsletter.

Consider the options market to protect wheat prices says Extension Specialist Melvin Brees at Missouri. With Dec wheat over $7 on tight supplies, July ‘08 futures are over $5.75, and Brees says a 50¢ premium on a $5.70 strike price will protect an “opportunity to sell 2008 production at prices seldom offered at harvest time.” Read his newsletter.

Climate change in the American Midwest could be good for agriculture over the next 10 to 20 years, says atmospheric researcher Gene Takle at Iowa State. His trends include:
1) Annual precipitation has increased by about an inch over the past 30 years.
2) There are more 3-inch rains than there were 30 years ago.
3) Longer growing seasons with 8 more frost-free days than there were in the 1950s.
4) The summer heat isn't as intense as it was 30 years ago, but the humidity is rising.

Back home in Indiana, it is dry, says the National Weather Service. A dry spell that began during April has worsened, with much of central IN experiencing its driest period during this time frame since 1966. Some portions of Eastern IN experienced the driest conditions in 53 years. Soil moisture, groundwater levels & river levels are dropping.

While Iowa State says the US may eventually use 75% of its corn for ethanol, Purdue economist Phil Abbott says, “If you read between the lines, their study shows that the US will have to import corn to accommodate this demand for corn to make ethanol. We would flip from an exporting country to an importing country, if their study is correct."

Soybeans across many areas of the Midwest are in the R6 or full seed stage, and likely beyond the need for any fungicide treatment for soybean rust, should it reach the Cornbelt. That’s the recommendation of IL Extension’s Loretta Ortiz-Ribbing, who says vigilant scouting is still the watchword. Recent findings were at a TX research station, and in a soybean sentinel plot in a MS county bordering LA. Monitor the Rust website.

Spraying bugs, weeds, or disease regardless of their presence in your crop, is becoming common, but IL entomologist Kevin Steffey says don’t try to keep up with the neighbors. Steffey says higher crop prices are causing some farmers to abandon Integrated Pest Management practices they have previously used. He says some farmers are ignoring required Bt refuges as well as spending money on pesticides because they can afford it.

An increasing practice among farmers is to plant Bt corn that is toxic to rootworms and corn borers, regardless of the need, because of their higher yields, and not plant any refuges. IL Extension’s Steffey says insects can become resistant to the genetics, making it even more important to plant non-Bt refuges, despite their potential for lower yields.

As you agonize over slow filling soybean pods, Ohio State entomologists suggest you also scout for bean leaf beetles. Defoliation is not a big deal at this point in the season, but their warning is about pod damage, particularly for food grade or seed beans. They say if beetle populations are high, and 10% of pods are injured, a treatment is warranted.

Manage grain storage for higher profits, says MO Extension’s Bill Casady, who urges bin sanitation and control strategies for eliminating insects and disease from fines.
1) Remove all old crop refuse from bins, trucks, combines, and handling equipment.
2) Inspect fans, drying floors, and prepare and lubricate augers and other components.
3) Depending on length of storage, bins may need to be sprayed with residual insecticide.
4) Set the combine to harvest clean, high quality grain, and eliminate fines and BCFM.

Check your GPS receiver, if your yield monitor seems goofy. Two old satellites were replaced with upgrades, and older GPS receivers may not tune in PRN#135 & PRN#138. If you have trouble, visit the manufacturer’s website to determine if you are affected and there is a software upgrade. If your unit is too old, there may not be any alternatives.

Pork producers lose $560 to 762 mil. annually from PRRS, but 20 years after the viral disease was identified, little progress has been made toward a cure. National experts met recently to identify research needs toward an effective vaccine, but say it may be 5-10 years before an effective strategy to fight the disease can reach the market.

Pork producers don’t want bacterial diseases becoming resistant to tetracycline. But that is the potential outcome found by IL researchers who tracked bacteria from waste lagoons to nearby water wells through the specific genes in the bacteria that were resistant to tetracycline. They say if the resistance genes get into the right bacteria at the right time, they can confer resistance to an antibiotic used to treat the disease.

Placements of cattle on feed in July were 18% under 2006 with most of the drop in light weight feeders says Nebraska’s Darrel Mark, as the industry reacts to higher feed costs.