2017 Market Outlook
CornSouth ONE GROWER PUBLISHING, LLC
Southern Production & Marketing Strategies
A Supplement to Cotton Farming and The Peanut Grower Magazines
February 2017
CornSouth One Gutsy Extension Agent
Contents
Summer gardens here on the farm have rows as long as some of your corn rows, if not longer. Peas from A to Z, (White) Acres to Zippers, are planted and the bounty fills the freezers of many families, including mine. Because of the size of this garden, it tends to be moved around a lot from the edges of this field to that. The winter garden is much smaller. A small row of mustard greens, one of collards and turnips as well, plus a split row of brocolli and radishes and that’s about the extent of the winter garden. With the need for much less space, it isn’t moved around as much so that it is nearer my parent’s Amanda Huber house. Editor After a few years of the winter garden not doing well, encountering all types of pest problems that Sevin-dust, the traditional garden cure-all, couldn’t solve, my mom put in a call to the Extension agent. “Mrs. McKoy,” this bold fella said after hearing all the garden-related issues, “You haven’t been reading your Bible.” At that moment, I can only imagine that every angel in heaven stopped what they were doing and a collective “Gasp!” rang out. The Lord, however, knew that was not the case. The problem was she just did not remember the one cultural practice so important it is mentioned in the Bible – crop rotation. Since then, the winter garden has been moved around more frequently and problems have been less prevalent. Today, crop rotation is usually the first practice mentioned for weed, disease and even insect control, and with each new crop pest, researchers continue to show the effectiveness of this practice. Recently, I read about some work on herbicide-resistant giant ragweed. Even though this weed has not been a problem in the Southeast or Delta region yet, it has caused significant yield losses in Midwest corn and soybean crops. Therefore, researchers at the University of Minnesota set out to determine the impact of alternative control strategies on both the emergence of giant ragweed and the number of giant ragweed seeds in the weed seedbank. They evaluated six three-year crop rotation systems, including continuous corn, soybean-corn-corn, corn-soybean-corn, soybean-wheat-corn, soybean-alfalfa-corn and alfalfa-alfalfa-corn. Researchers found that corn and soybean rotations were more conducive to giant ragweed emergence, and 38 percent fewer giant ragweed plants emerged when the crop rotation system included wheat or alfalfa. Crops in the rotation may be different in our region, but the need for crop rotation is just as important. Bob Kemerait, University of Georgia Extension plant pathologist, says, “The amount of disease growers experience in corn will largely be the combined result of weather, crop rotation, use of fungicides, variety selection and planting date. Shorter corn rotations will increase the threat from northern corn leaf blight, southern corn leaf blight and plant-parasitic nematodes.” Bottom line, as best you can in the economics of your farm and crop prices, it pays to practice crop rotation.
3 Market Factors
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CORN SOUTH | FEBRUARY 2017
Extension ag economist Mark Welch offers an early look at 2017.
4 Disease Watch: Bacterial Leaf Streak What to look for with this spreading problem.
Digital Content
Corn South: Covering Southern Corn Production Corn South is a supplement to the Mid-South and Southeast versions of Cotton Farming magazine and The Peanut Grower magazine for producers in Florida, Georgia, Alabama and Mississippi. If you would like to receive Corn South, visit www.CornSouth.com and click on “Subscribe to Corn South.” You can also add your email address to the E-News List to have exclusive content delivered to your inbox. Cover photo by Amanda Huber
If you have comments, send them to Corn South, 6515 Goodman Rd., Box 360, Olive Branch, MS, 38654. You may also call (901) 767-4020 or contact Lia Guthrie at lguthrie@onegrower.com or Amanda Huber at ahuber@onegrower.com.
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2017 Early Outlook
Market Factors
M
ark Welch, Texas A&M ag Extension economist says in his mid-January Market Grain Outlook, that USDA has made only minor changes to the U.S. and world corn supply and demand balance sheets in their first World Agricultural Supply and Demand Estimates for 2017. His market report continued as follows: Overall production was lowered 78 million bushels on lower yields, but use was down on a drop in feed use. The impact on ending stocks was a decrease from 2.403 billion bushels last month to 2.355 billion. The mid-point of the season average farm price increased a nickel from $3.35 to $3.40. The drop in U.S. production was the dominant feature of world corn supply and use. World corn supplies in the 2016/17 marketing year were reduced 700,000 metric tons, use was up 500,000 metric tons, which lowered world ending stocks by 1.3 million metric tons. Estimated days-of-use on hand at the marketing year end fell from 79 to 78½.
Grain Stocks
Corn stocks in all positions as of Dec. 1 were 12.4 billion bushels. That is 10 percent above last year and 22 percent above average. This level of carryover will likely serve to dampen upward price movement in response to minor adjustments to acres or yields in 2017. The current year ending-stock estimate is the highest since 4.3 billion bushels in 1987/88 and marketing year stocks-to-use ratio, the highest since 2005/06.
Marketing Strategies
Though every year is different, the seasonal index for December corn futures contract indicates favorable pricing opportunities are more likely in the first half of the crop year. With no pre-harvest pricing of the 2017 crop, I look for growing conditions in South America and estimates of next year’s acreage to shape the early season price for next year’s crop. Conditions in Brazil are generally favorable and USDA made no adjustment to production numbers from South America.
Market Overview ■■ A drop in U.S. corn production is expected ■■ Carryover will sap upward price movement ■■ Soybean returns favored over corn returns The soybean-to-corn price ratio suggests a significant shift in acres in the U.S. next year. The 20-day average of the November soybean to December corn price ratio for 2017 is 2.6. That is a level that favors soybean over corn returns in many Midwest crop budgets. Last year the price ratio of the RMA base prices was 2.29; the ratio during the survey period for planting intentions was 2.35. In the early ethanol era, the January crop report was a source of significant market volatility; limit moves were the norm. The past several years have been more subdued with the futures price of the December contract in January about what you would expect given seasonal price patterns, some risk premium early in the year with lower prices at contract expiration. CS
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Production Management
Disease Watch: Bacterial Leaf Streak
B
acterial leaf streak, caused by Xanthomonas vasicola pv. vasculorum (synonym X. campestris pv. zeae), was confirmed for the first time in the United States in many counties across Nebraska in 2016, and it was also confirmed in Colorado, Illinois, Iowa and Kansas. As yet, it has not been found in the Delta region or the Southeast; however, it is always best to be on the lookout. Symptoms on infected plants may look similar to other common diseases, sometimes causing confusion and misdiagnoses. Narrow stripes between leaf veins may initially look like the common fungal disease, gray leaf spot. Lesions can be brown, orange, and/or yellow and are often yellow when backlit. Lesions usually have slightly wavy edges in contrast to the smooth, linear lesion margins of gray leaf spot.
Epidemiology
Bacterial leaf streak has been observed on field (dent) corn, seed corn, popcorn, and sweet corn in Nebraska. The pathogen biology and disease epidemiology have not been studied enough to be well understood. Its potential impact on yield is not known in commercially available hybrids. The pathogen survives in infected corn debris from previous seasons and is thought to infect the plant through natural openings in the leaves. Irrigation and wind-driven rain, as well as warm temperatures, are thought to exacerbate the disease.
Management
Foliar fungicides used to manage gray leaf spot and other fungal diseases are not expected to effectively control this bacterial pathogen. Until more research has been conducted to determine the most effective management strategies for this disease, corn producers are advised to use standard management practices for bacterial diseases.
Cultural Practices
Sanitation practices such as cleaning debris from combines and other equipment be-
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CORN SOUTH | FEBRUARY 2017
PHOTOS BY K. BRODERS
Symptoms
This photo shows the elongated lesions of bacterial leaf streak on corn. When backlit, bacterial leaf streak has bright yellow, wavy margins.
tween fields can help slow its spread to unaffected fields. In some cropping systems use of crop rotation or tillage may help degrade infected corn debris and reduce the surviving bacteria. However, neither practice will
eradicate the bacterium and eliminate the risk of disease. CS Information provided by University of Nebraska Extension.
10 Disease Management Tips 1. Plant seed treated with a fungicide to reduce seed rots. A seed-treatment nematicide is also effective for management of nematodes at low to moderate populations. 2. Rotate to non-cereal crops to prevent a buildup of certain disease organisms, including fungi, bacteria and nematodes. 3. Plant hybrids that are resistant to problematic diseases. By selecting resistant hybrids, producers can significantly reduce the threat of diseases, such as northern corn leaf blight, southern rust and Diplodia ear rot. 4. Plant early to help reduce stalk and ear rot problems. Charcoal rot, a disease that can cause serious damage to the stalk and significant lodging, is most severe under drought stress and, thus, typically more problematic on later-planted corn. 5. Destroy old crop residue to help reduce problems from disease organisms. 6. Follow good fertilization practices, including starter fertilizers and a good liming program, to promote vigorous seedling growth. 7. Subsoil under the row to reduce compaction and promote root growth. 8. Use approved fungicides on susceptible hybrids to reduce losses to disease and protect yield. Timing of fungicide applications is critical for disease management. 9. Chemigation has proven effective in management of foliar diseases of corn in recent studies. 10. Plant-parasitic nematodes are often an under-recognized problem for corn growers in Georgia. Growers should soil sample appropriately and use nematicides to minimize losses. Source: Bob Kemerait, Extension plant pathologist, University of Georgia Corn Production Guide.
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