Marketing

Grain Outlook USDA’s world corn estimates may be high

Livestock Angles Livestock markets ripe for change in direction

The following marketing 90,000 metric tons from the The livestock markets are Covid lockdowns are being analysis is for the week end- survey’s February outlook. at a very interesting juncture relaxed. The other reason has ing April 23. There has been chatter in the as we approach the end of the been the fear of increased CORN — Let’s just take a moment and absorb this week’s impressive rally to prices not seen since July 2013! Old crop corn contracts locked up the 25-cent limit on April 22. The nearby contract closed above $6.00 for the first time since 2013. A combination of demand (high basis levels), PHYLLIS NYSTROM CHS Hedging inC. St. Paul trade that Brazil’s total corn crop may drop closer to 100 mmt. Does anyone buy the USDA’s 109 mmt outlook? Brazil has also suspended their import duty on non-Mercosur corn, soybeans, meal, and soyoil through 2021 as they try to slow food inflation. In Argentina, the Buenos month of April. The cattle market (including feeder cattle) has been under some pretty good selling pressure and has appeared to establish a top at this time. On the other hand, the hog market has been on a streak to the upside through the month. The volatility in the liveJOE TEALE Broker Great Plains Commodity Afton, Minn. inflation due to the heavy government spending which is taking place at the present and in the future. The interesting point to this is the movement of boxed beef has slowed as the prices have risen — which is indicating a slowing demand for beef at higher prices. cool temperatures in the United States (which will slow germination), stress on Brazil’s safrinha corn crop caused by a lack of moisture, and the willingness of money to flow into the market on the long side combined to punch prices to multi-year highs. Brazil’s forecast is dry into May when their normal dry season begins. This year, a higher-than-normal percentage of the safrinha corn crop will pollinate Aires Grain Exchange put the corn harvest at 17 percent complete vs. the average of 28 percent complete. The crop rating fell 1 percent to 37 percent good/excellent; but they kept the production estimate unchanged at 46 mmt. The Rosario Grains Exchange lifted their corn estimate from 47.5 mmt to 50 mmt. The USDA attaché in Argentina put their corn crop at 47 mmt. The USDA is at 47 mmt. stock markets has picked up immensely during the month and is likely to continue in the weeks ahead. Each category, whether it be the hog complex or the cattle complex, is at levels that could see a sharp change in their respective direction at any time during the weeks ahead. This could make for an interesting change in these respective markets as we move into the month of May. A temporary plus to the cattle market was the release of the U.S. Department of Agriculture’s Cattle on Feed report released April 23. This report was seen as slightly friendly as the placement number was lower than expected. This could bring back some optimism to the market on a short term basis. However, the market will be focusing on the demand side of the market to bring about a return to in May due to late planting outside the U.S. corn planting as of April 18 was The cattle market has definitely higher prices. “ideal” window. Private estimates are beginning to suggest Brazil’s corn crop will drop below 100 million metric tons. As of April 16, Brazil’s first corn harvest was 79 percent complete vs. 76 percent on average. 8 percent complete, spot on the average and slightly less than the 9 percent expected. Illinois corn planting was 12 percent complete, 4 percent ahead of average. Corn emergence was 2 percent vs. 1 percent on average. changed direction over the past several weeks as it would appear the cattle have topped during the first week of April. The interesting point is that the beef cutout has continued to rise to levels not seen for many months. The hog market has continued the streak to higher prices since the month of November last year to levels not seen since 2014. Demand for pork — both domestic and foreign — has been one of the catalysts behind the strength

The U.S. attaché in China projected Weekly export sales were on the Demand has driven the beef cutouts in the market through this rally. China will import 28 mmt of corn this lower end of expectations at 15.3 mil- for several reasons. The firs is the Another reason was the contrast in year which compares to the official U.S. Department of Agriculture forecast for See NYSTROM, pg. 17 reopening of many restaurants as the price between beef and pork during the past year enticed more buying in pork 24 mmt. Other private thoughts are closer to 30 mmt. China issued new guidelines for feed rations to reduce Cash Grain Markets than in beef. However, as the prices between beef and pork have narrowed during the past several months, pork the use of corn and meal in hog and corn/change* soybeans/change* demand has shown signs of weakening. poultry feed. They suggest using wheat, Stewartville $6.30 +.98 $14.97 +1.63 With the hog market overbought, the rice, DDGs, barley, sorghum, corn pro- Edgerton $6.55 +.96 $15.40 +1.70 possibility of a correction in the near tein powder, and amino acids, etc. as Jackson $6.52 +.96 $15.11 +1.46 future looms over the market as we substitutes where appropriate. Janesville $6.52 +.79 $15.11 +1.55 approach the summer months. History

Private estimates for Brazil’s total Cannon Falls $6.50 +1.02 $15.05 +1.45 would suggest the hog market (on a corn crop slid lower this week with one Sleepy Eye $6.64 +1.04 $15.27 +1.63 percentage basis) typically weakens prominent private consultant falling 2 into the fall months after spring rallies. mmt to 103 mmt. Rabobank cut their Average: $6.51 $15.15 At this point, chances are increasing forecast 2 mmt to 105 mmt. AgRural dropped their outlook 3 mmt to 103.4 Year Ago Average: $2.57 $7.80 that prices could weaken in the future weeks. v mmt. A Reuters survey of analysts put Grain prices are effective cash close on April 27. Brazil’s corn crop at 107.3 mmt, down *Cash grain price change represents a two-week period.

NYSTROM, from pg. 16

lion bushels, bringing total export commitments to 2.645 billion bushels. The USDA is forecasting sales this year at 2.675 billion bushels. We have 1.1 billion of the sales left to ship. China accounts for 539 million bushels of the unshipped bushels. Corn inspections, what is actually shipped, are up 84 percent for the year vs. last year while the USDA is expecting a 50 percent increase in exports year-on-year.

U.S. ethanol production for the week held steady at 941,000 barrels per day. Stocks fell 100,000 barrels to 20.4 million barrels while margins improved 6 cents to 16 cents per gallon. Gasoline demand hit a 34-week high at 9.1 million bpd. Over the last five weeks, gasoline demand was an average of 5.4 percent below 2019 levels. (Last year was Covid, so it’s hard to compare to last year.)

Political events are rising once again as Russia amassed its largest military presence since 2014 along the Ukrainian border. Any issues in this area put a strategic waterway at risk. Also this week, Russia “recommended” the U.S. ambassador leave the country as tensions between the United States and Russia escalate. Russia banned several U.S. officials — including members of the U.S. Cabinet — in retaliation for recent sanctions the United States placed on some Russian diplomats and companies.

And in the United States, the administration is signaling they want to add 4 million Conservation Reserve Program (CRP) acres to bring the total to 25 million acres. This comes at a time when we are fighting for additional corn and soybean acres to solve the tight ending stocks situation and futures prices are at eight-year highs. It’s surmised they will have to increase incentives to accomplish their goal. Outlook: Demand has not subsided as noted with the huge inverse between the May and July futures contracts. It traded out 23.5 cents as May options expired. Posted basis levels aren’t meaningless, but pushes are getting paid for nearby and new crop supplies. Corn closed higher in seven of the last nine trading sessions. Weather and demand, demand and weather. Growers are holding tight to the old crop stocks they have left, seemingly more willing to part with a few new crop bushels at these multi-year highs. We saw a few old and new crop export sales announced this week and we have yet to see any wholesale export cancellations.

The market is in an uptrend and no one wants to stand in front of a steaming freight train. Funds are believed to hold record length, but after the exchange increased their allowed position limits last month there’s no current reason why they can’t add to their length. And there hasn’t been any reason for them yet to liquidate. Keep in mind, when (and if) the market does turn, it may go down a lot quicker than it went up. But for now, the uptrend is intact.

For the week, May corn skyrocketed 70 cents higher to close at $6.55.5 — the highest prices seen since 2013. The highest price a nearby contract traded in 2013 was $7.48.75 per bushel. The new contract high in the May contract is $6.58.5 per bushel. July corn rallied 58.75 cents to close at $6.32.5 with a new contract high of $6.36.5 per bushel. December corn closed 38.5 cents higher at $5.50.75 with a new contract high of $5.57.25 per bushel.

We will see our first 2021-22 balance sheets on the May 12 World Agriculture Supply and Demand Estimates report. SOYBEANS — Fresh contract highs across the soybean contracts and soyoil (highest since 2008) contracts set the stage for another leg higher at a time of strengthening basis and wider board inverses as we have not satisfied nearby demand. On the continuous soybean chart, prices rose to their highest since July 2013 and closed higher for nine consecutive sessions. The 2013 high on the continuous soybean chart was $16.30 per bushel. November 2021 soybeans are the first new crop soybean contract to reach $13.00 since 2013. The May/July soybean inverse pushed out to 25.25 cents on demand for physical soybeans. Basis levels have risen along with the spread inverse, indicating how tight the situation is.

In March, China imported 7.18 mmt of U.S. soybeans, up 320 percent from last year as Brazil’s shipments were delayed by a later harvest. China imported 315,300 metric tons of Brazilian soybeans in March, down 85 percent from last year. China’s total March soybean imports at 7.77 mmt were up 82 percent from last year. Brazil has the cheapest soybeans into China through September.

Weekly export sales were within expectations at 2.4 million bushels as Brazil has the cheapest soybeans. Total export commitments are 2.23 billion bushels compared with the USDA’s outlook for 2.28 billion bushels of exports. We only need to sell 4 million bushels per week to hit the target. The unshipped sales are just 187 million bushels with China accounting for 26.2 million of those bushels. New crop soybean sales were 11.6 million bushels. Total new crop sales are 227.5 million bushels vs. 34.6 million last year at this time. Soybean inspections are up 67 percent from last year when the USDA is estimating exports to be 36 percent higher year-on-year.

As of April 16, Brazil’s soybean harvest was 88 percent complete compared to 89 percent on average. The BAGE put Argentina’s soybean harvest at 18.5 percent vs. the five-year average of 43.5 percent complete. The U.S. attaché in Argentina put their soybean crop at 45 mmt compared to the USDA’s 47.5 mmt forecast. The attaché also put their 2021-22 crop at a record 51.5 mmt. They rated the soybean crop at 9 percent good/excellent. Argentina is considering raising its export taxes on commodities. Their current export tax on soybeans is 33 percent, 31 percent on meal and soyoil, and 12 percent on corn and wheat.

U.S. soybean planting in the first report of the season was 3 percent complete, right on the average and slightly ahead of the 2 percent trade estimate. Illinois soybean planting was 5 percent complete, Indiana 4 percent, and Iowa 5 percent complete. Outlook: I can’t remember when soybeans gained over a dollar in a single trading week! It was the same song, different verse this week as demand stays strong; i.e. translated by big basis and wide board inverses, extremely small supplies held in even tighter hands, and uncertainty over how we solve the issue in the short term. Soyoil prices have surged to levels not seen since 2008 and crush margins are profitable. The market will let us know when enough is enough and I will not pretend to know where that will occur. Manage your risk and don’t let it manage you. There are several available marketing tools to assist you. Be familiar with them.

For the week, May soybeans soared $1.06.5 to close at $15.39.75 with a new contract high at $15.49.75 per bushel. The July contract settled 93.5 cents higher at $15.16 with a new contract high at $15.25.5 per bushel. November soybeans managed a 67.5 cent gain to close at $13.41.5 with a new contract high at $13.46.75 per bushel.

Nystrom’s notes: Contract changes for the week as of the close on April 23 (May contracts): Chicago wheat jumped 57.75 cents to close at $7.10.25, Kansas City was 64 cents higher at $6.73.25, and Minneapolis rallied 54.25 cents to close at $7.18.5 per bushel. All these contracts set new contract highs. v

WCROC earns water quality certification

MORRIS, Minn. — The University of Minnesota’s West Central Research and Outreach Center (WCROC) is the first University of Minnesota entity to achieve certification through the Minnesota Agricultural Water Quality Certification Program. Administered through the Minnesota Department of Agriculture, this voluntary program allows farmers and landowners to demonstrate practices which can positively impact water quality and conservation practices that help protect our environment.

The WCROC has changed to no-till farming practices on erodible land and has installed a biofilter at a tile discharge point to reduce nitrogen flow into the watershed.

A MAWQCP certificate signifies that participants will be deemed in compliance with any new water quality rules or laws during the period of certification, are taking a proactive approach to future water quality issues and concerns in Minnesota, and are using conservation practices to protect Minnesota’s lakes, rivers and streams. Currently, over 1,050 producers and 750,000 acres are water quality certified in Minnesota. Certification is for ten years.

This article was submitted by the University of Minnesota. v

WORTHINGTON, Minn. — It is well known that planting date plays a key role in determining yield potential in corn and soybean. Long-term University of Minnesota trials demonstrate, for example, corn yield is usually optimized when corn is planted from April 25 to May 10. Long-term data also shows soybean yield is optimized when planting occurs around May 1. Planting earlier than these guidelines rarely leads to greater yields, but does increase risk of stand loss from frost or cool conditions after planting. This can lead to reduced yield or even the need to replant. Soil conditions at planting are also a big factor to consider.

Let’s revisit 2019 (only for a little while). Many of us have been trying to forget the excessively wet conditions of 2019. Many farmers faced the decision to plant into sub-optimal conditions, plant very late (e.g. corn and soybeans into June) or to take prevent plant. Information on very late planting dates in corn and soybean in Minnesota is limited, so University of Minnesota Extension requested farmer input in a planting date survey following the 2019 season. The goal was to determine how those decisions turned out.

Not surprisingly, planting date was the most important factor influencing yield of corn and soybean in 2019. As expected, yield on average decreased as planting was delayed, but there was a lot of variability in the data. Variability increased as planting was delayed into mid-May and beyond, corresponding to an increase in fields planted into wet or very wet conditions.

Yield variability within fields was considerable, with some fields ranging from 0 to 265 bushels per acre in corn and 0 to 70 bu./acre in soybean. Variable soil conditions and drown-out spots were a significant contributor to this extreme range in yield within a field.

One of the key sources of variability when looking at corn yield on a particular date was the condition of the field at planting. Average yield in fields where farmers reported conditions at planting were “good” was 188 bu./acre. Yield was 8 percent lower when conditions were “slightly wet” at planting, and plummeted to 144 bu./acre when fields were planted under “very wet” conditions. Nearly all of the fields planted in “very wet” conditions were also planted

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after May 14 when many started pushing field conditions given the continued wet forecast in 2019. When adjusted for planting date, planting into “good” conditions resulted in the greatest corn yield. Yields dropped 2 bu./acre when conditions were “slightly wet,” and dropped 10 bu./acre when conditions were described as “very wet.”

On average, soybean yields were greatest when fields were planted under “good” conditions. Average yields were 7 percent lower where planting conditions were “slightly wet,” and 18 percent lower when “very wet.” Similar to corn, soybeans planted into wetter conditions also tended to be planted later. When adjusted for planting date, “good” conditions still resulted in the greatest yields, where “slightly wet” conditions yielded 1.5 bu./acre less and “wet” conditions yielded 2.5 bu./acre less. Soybean fields planted under wet or slightly wet conditions that had poor stands (less than 80 percent of normal) were the lowest yielding. These fields tended to have other issues as well, such as symptoms of nutrient deficiency.

Out of the 215 fields reported on, only 20 percent were planted into “good” conditions. One of the lessons learned from 2019 is that it can be okay to push field conditions a little but don’t push it too much. Survey comments were telling, such as “Remind me to never plant corn in June again!” and “I should have taken prevent plant”.

Outlook for 2021 — Many factors that influence yield potential were not addressed in this survey, including genetics, crop maturity, disease tolerance, agronomic traits, and pest pressure. Field conditions this spring are looking to be much drier than in 2019, but as the season progresses we don’t want to forget lessons learned from the past.

Thank you to everyone who participated in the survey – your valuable input was much appreciated and will help us provide better guidance if/when we are faced with planting delays again in the future!

This article was submitted by Lizabeth Stahl and Jared Goplen, University of Minnesota Extension. v

Markets better equipped this time around

ZEMAN, from pg. 13

ucts and other necessities like money from customers to vendors? What are safe limits in terms of numbers of customers that should be allowed at one time at the market? Can we safely offer food sampling?”

The questions were myriad and seemingly insurmountable — especially because people couldn’t get together to talk them through. The MFMA, like so many organizations, took to zooming.

“We regularly had over 150 people weekly,” Guenther said.

The key to the success of those Zoom conferences was that state regulators were invited to attend and work through the implementation of the protocols with the farmers and market managers. University of Minnesota Extension was there. So were the Departments of Health and Agriculture.

“We’d start those Zooms by saying what we know today and things were changing rapidly,”

Zeman said. “Then somebody would say, ‘what about this?’ and we’d problem-solve on the spot. We’d welcome people to say what are you worried about, what are you thinking about. If the regulators couldn’t answer questions, they’d get back to us later and then we’d send out emails to about 3,000 people as fast as we could. The State was very responsive.” This coming market season will open with a clearer understanding of the science necessary to protect ourselves from Covid-19. Outdoor markets with adequate spacing for vendors won’t require people to wear masks. In general, live music, food sampling, and food service won’t be allowed. Masks will be required for indoor markets. “We are trying to keep people from lingering,” Zeman said. You can learn more about the Minnesota Farmers Market Association and its services — such as vendor training and group liability insurance — by visiting their web site at https://www.mfma.org. v City Nature Challenge begins April 30

ST. PAUL — Backyard naturalists can share their nature observations with an international community of researchers, academics and conservationists starting April 30 in a ten-day project called City Nature Challenge.

City Nature Challenge 2021 invites members of the public to observe nature locally — whether it’s birds, insects, animals, fungi, plants or tree species — then post their photos and observations to a website, iNaturalist (www.inaturalist.org). Their observations go into an international database used by scientists and land managers across the globe to study and preserve nature and wildlife.

City Nature Challenge continues through May 3. From May 4 to 9, anyone can go to iNaturalist.org to help identify what was found.

This article was submitted by University of Minnesota Extension. v