Marketing

Grain Outlook Yield figures typically jump by harvest

The following marketing analysis is for the week ending July 15.

CORN — Corn saw a huge swing early in the week with a Sunday night gap higher reversed when prices cratered on July 12 before and after the July World Agriculture Supply and Demand Estimates report. September corn traded from $6.67 to $5.84.75 in the first three days of the week. December corn traded from $6.58.5 to $5.76.75 during that same time.

The push higher came from a warmer, drier outlook only to be offset by a slightly better longerterm forecast into the end of July. Forecasts later in the week still showed hot, dry conditions PHYLLIS NYSTROM for the Midwest. The July CHS Hedging inC. WASDE report, in my opinion, St. Paul didn’t warrant the 40-plus cent collapse in prices we experienced. The numbers weren’t overtly bearish, but neither were they strongly bullish.

The dollar’s rise to fresh 20-year highs during the week added to pressure on the agricultural sector. The Euro was at par with the U.S. dollar for the first time in nearly 20 years. The drop in crude oil prices lent pressure to the energy field, including biofuels. At mid-week, the fears of inflation once again took a step forward when the June Consumer Price Index showed a 9.1 percent increase to a 41-year high! The annualized Producer Price Index through June was up 11.3 percent year-on-year. This suggests the Federal Reserve may increase interest rates a full basis point at their July 26-27 meeting to combat inflation.

Talks between Ukraine, Russia, Turkey and United Nations officials in Istanbul at mid-week over a grain export corridor through the Black Sea reportedly reached a tentative agreement. According to Turkey, a coordination center will be formed with Russia, Ukraine, and the United States for grain exports. There will be joint controls for checking grain at the harbors and to ensure the safety of the export routes. The countries involved will meet in the next week to sign the agreement.

Some questions still need to be answered. What facilities can load the estimated 20 million metric tons of grain in Odessa’s silos? Will Ukraine demine the area which would lower their defenses? Is Russia willing to sign without at least some sanctions against them getting lifted?

China has reached an agreement with Brazil to import Brazilian corn. The phytosanitary agreement,

Cash Grain Markets

corn/change* soybeans/change*

Stewartville $6.46 -.18 $14.35 -.25 Edgerton $7.07 +.25 $14.73 +.04 Jackson $6.94 +.05 $14.55 -.06 Hope $6.87 -.05 $14.42 -.01 Cannon Falls $6.51 -.03 $14.57 -.11 Sleepy Eye $6.82 +.05 $14.58 +.19 Average: $6.78 $14.53 Year Ago Average: $6.39 $14.20

Grain prices are effective cash close on July 19. *Cash grain price change represents a two-week period.

however, won’t allow for shipment to begin until 2023 since China wasn’t able to certify this year’s crop. China wants information as the crop is grown and shipped, including pesticide and herbicide usage, crop conditions during development, etc. Previously, China sourced its corn imports from the United States and the Black Sea region.

The July WASDE report incorporated the June 20 acreage and stock numbers. On the 2021-22 balance sheet, the feed and residual line was lowered by 25 million bushels which fed to an increase in ending stocks by a similar amount to 1.51 billion bushels. This compared to the trade expectation for 1.49 billion bushels and 1.485 billion bushels last month. The average farm price was unchanged at $5.95 per bushel.

The 2022-23 balance sheet reflected the June 30 acreage number of 89.9 million acres vs. 89.5 million previously. Production was up 45 million bushels to 14.505 billion bushels (14.524 billion estimated) and the yield was unchanged at 177 bushels per acre. Ending stocks rose 70 million bushels to 1.47 billion bushels. The trade was expecting 1.428 billion bushels of ending stocks. The average farm price was cut a dime to $6.65 per bushel. The ending stocks to use ratio fell from 9.6 percent to 10.1 percent.

World ending stocks for 2021-22 were 312.3 mmt compared to 311.5 mmt estimated and 310.92 mmt in June. World ending stocks for 2022-23 at 312.9 mmt was 2.5 mmt above the trade estimate. Argentina’s and Brazil’s corn production figures were unchanged at 53 mmt and 116 mmt respectively, with exports steady at 39 mmt and 44.5 mmt respectively. Ukraine’s corn exports were unchanged at 9 mmt and China’s unchanged at 18 mmt. On China’s own balance sheet, they have corn imports at 18 mmt and soybean estimates at 95.2 mmt.

Weekly export sales were in line with expectations at 2.3 million bushels for old crop and 13.7 million bushels for new crop. Old crop sales need to average 9 million bushels per week to reach the U.S. Department of Agriculture’s 2.45 billion bushels target by the end of the marketing year. Total export commitments are down 13 percent from a year ago when the USDA is estimating an 11 percent year-onyear decline. New crop total commitments stand at 269 million bushels vs. 633 million last year.

On July 15 the USDA flashed a 5.2 million bushel new crop sale to China. However, at midday, the sale was withdrawn after the exporter provided additional information to the USDA. So, we still haven’t seen a daily export sales flash for corn since June 9. China’s new crop purchases are 114.2 million bushels compared to 421.2 million bushels last year. The strength of the US dollar and the weakness of the Brazilian real have kept U.S. commodities uncompetitive with South America.

Weekly ethanol production fell 39,000 barrels per day to 1 million bpd while stocks rose 100,000 barrels to 23.6 million barrels. Production hasn’t hit the weekly average needed for the last eight weeks. Ethanol margins improved by 7 cents per gallon to a negative 10 cents per gallon. Gasoline demand was 8 million bpd which was a 26-week low and down 13 percent from a year ago as high prices take a toll on consumers.

Outlook: Corn is headed into the gut slot of pollination and weather will be the key headline with inflation/recession talk barking at its heels. Without a crystal ball, determining the final yield is impossible. If history is any indication, the corn yield in seven of the last nine years has increased from July to the final report. Last year, the corn yield fell 2.5 bu./acre from July to the final report. Some traders are skeptical that corn will make the 177 bu./acre yield the USDA is using since we haven’t had ideal conditions. Put me in the Doubting Thomas category for any real changes to happen in the immediate future if the Black Sea Initiative gets signed in the coming week. We will continue to look for big swings and high volatility with the weather the leading factor. Buckle in folks, the ride has not come to a complete stop!

For the week, September corn dropped 29 cents to $6.04.25 and the December contract crumbled 19.75 cents to $6.03.75 per bushel.

SOYBEANS — Soybeans followed the same pattern as corn this week, but a weaker world vegetable oil lingered in the background. Increasing cases of Covid in Shanghai are also a concern that more lockdowns may be implemented. China’s soybean imports in June were down 23 percent vs. last year as their hog margins are under pressure and they seek to reduce inventories. This was their lowest June soybean import number in three years. China’s crude oil imports hit a four-year low in June as lockdowns slashed demand.

The refreshed 2021-22 soybean balance sheet saw a 10 million bushel reduction in crush with exports steady at 2.17 billion bushels. Ending stocks at 215 million bushels were 5 million higher than last month and the trade estimate. For 2022-23, the acreage number was raised to reflect the June 30 figure of 88.3 million acres. With the yield unchanged at 51.5 bu./acre, production dropped 135 million bushels to 4.505 billion bushels which was slightly below the 4.536 billion estimate. On the demand side, the crush was down 10 million, and exports reduced by 65 million bushels to 2.135 billion bushels. Ending stocks

See NYSTROM, pg. 9

To help assist agricultural workers in receiving state-of-the art equipment in farming communities throughout the state, the Minnesota Soybean Research & Promotion Council has joinedNationwide’s Grain Bin Safety advocacy efforts to unveil a nomination process for community members to recommend Minnesota first responders to receive an aluminum rescue tube and auger, accompanied by hands-on training at their respective location by experts at the National Education Center for Agricultural Safety.

The nomination window will remain open through Aug. 26. The form can be accessed via www.mnsoybean.org/soyrescue. Five grain entrapment rescue tubes and five augers will be donated, courtesy of the

Minnesota soybean checkoff. Winning participants will be required to undergo hands-on training later this fall. The grain tube is made of six panels, called “The Great Wal,” which slide into place around the victim. Once inserted, the tube halts the flow of grain and relieves the pressure on the trapped individual. One cubic foot for grain weighs 50 pounds; without the tube, grain can continue to collapse the victim as rescuers remove it. The grain entrapment rescue auger, which will also accompany the donated rescue tube, quickly aids in the removal of grain away from the victim. The highest rate of grain bin accidents occurs in Keep watch for tar spot in corn

CALEDONIA, Minn. — First identified in the United States in 2015, tar spot is a corn disease which has spread dramatically. Given the relatively recent nature of this disease, there is still a lot to learn. However, given that potential yield losses can range from no losses to 50 bushels an acre, this is a corn disease to watch.

Tar spot is a fungal disease of corn and primarily infects and damages leaves. Symptoms include irregularly shaped black structures on leaf surfaces. The black structures are firm, appear mostly smooth on the surface and the spots do not rub off or break open. Tar spot can also produce fisheye symptoms that have black spots surrounded by tan lesions with dark borders. The easiest way to differentiate tar spot from insect frass or other diseases is to wet the area and then rub vigorously with your fingers. Tar spot should not rub off, whereas other diseases that mimic tar spot should come off onto your hand.

Tar spot prefers relatively cool temperatures and humidity to develop and spread. If we begin to see hot dry weather, tar spot may slow or stop. You should scout fields for tar spot from now until harvest. Pay close attention to those areas which have had tar spot in the past.

When applied at the correct time, rate and combination, fungicides can reduce yield loss impact. Corn January and June. Within just four seconds, an adult can sink to their knees in flowing grain, creating a scenario in which they’re unable to free themselves without help. In 20 seconds, a farmer can sink into the grain inside a bin and become entrapped.

In 2020, Minnesota reported more than 220 grain bin entrapments and three fatalities. As recently as June, a cooperative employee was trapped in a grain bin and died at the scene.

Since 2014, Nationwide has awarded more than 200 grain bin rescue tubes to first responders.

This article was submitted by the Minnesota Soybean Growers Association. v

hybrids also vary in their susceptibility which will be something to consider when choosing next year’s seed — especially if you have fields with known tar spot populations.

Both crop rotation and tillage only play a minor role in reducing the risk of tar spot in fields. However, with both the length of rotation and the degree of which tillage helps, it is still a relative unknown.

If you suspect you have a field with tar spot, please contact your local County Extension office.

This article was submitted by Katie Drewitz, University of Minnesota Extension. v

Soybean yields remain uncertain

NYSTROM, from pg. 8

were 230 million bushels which was higher than the trade estimate of 210 million bushels but down from 280 million bushels last month. The average farm price dropped 30 cents to $14.40 per bushel. The ending stocks to use ratio fell 1 percent to 5.1 percent.

World ending stocks for 2021-22 increased to 88.7 mmt vs. 86.4 mmt estimated and 86.15 mmt in June. Ending stocks for 2022-23 were 99.6 mmt compared to 99.4 mmt estimated and 100.46 mmt in June. Brazil’s 2021-22 bean exports were lowered 1.3 mmt to 81 mmt with production unchanged at 126 mmt. Brazil’s 2022-23 production was unchanged at 149 mmt with exports up .5 mmt to 89 mmt. For Argentina, 2021-22 production was raised .6 mmt to 44 mmt and exports lowered .5 mmt to 2.3 mmt. Argentina’s 2022-23 production was steady at 51 mmt with exports at 4.7 mmt. China’s soybean imports were lowered 2 mmt to 90 mmt for the 202122 crop year and cut 1 mmt to 98 mmt for 2022-23.

Weekly export sales were a marketing year low with net cancellations in old crop of 13.3 million bushels. China canceled 4.8 million bushels. This drops total commitments to 2.185 billion bushels, but is still above the USDA’s 2.17 billion bushel forecast. This was the third week of net cancellations and may draw into question if our sales stay above the USDA projection. New crop sales were 4.2 million bushels with total commitments at 509 million bushels compared to 356 million last year. China has purchased a total of 290.3 million bushels of soybeans for the 2022-23 crop year vs. 150.6 million last year by this date. The last daily export sales flash for soybeans was June 17. There has been chatter that China may roll a higher than normal amount of old crop purchases into new crop this year.

The June National Oilseed Processors Association Soybean crush was leaked early this month, but it didn’t seem to have any impact on the market’s reaction. The crush was 164.7 million bushels compared to 164.5 million estimated. Soyoil stocks were much higher than anticipated at 1.767 billion pounds vs. 1.704 billion pounds estimated.

Outlook: Soybean basis at more processors rolled to the November this week. History shows in seven of the last eight years, the soybean yield has increased from July to the final report. Last year, the bean yield rose .5 bu./acre from July to the final report. August weather is the great determinator of soybean yields, so we have a long way to know what this crop will produce.

We’d like to see better demand for export soybeans after experiencing three weeks of net cancellations. Some are beginning to wonder if we will meet the USDA’s outlook. The market has shown us it can move fast and wide. There’s no reason to change that expectation. Keep your eyes peeled for any political gyrations that could move the needle on fund activity.

For the week, August soybeans tumbled 47.25 cents to close at $14.66 and the November contract slid 54.25 cents lower to $13.42.25 per bushel.

Weekly price changes in September wheat for the week ended July 15: Chicago wheat crashed $1.14.75 lower to $7.76.75, Kansas City plunged $1.08.25 to $8.37.5, and Minneapolis fell 85 cents to $9.06.75 per bushel.

All U.S. wheat production was 1.781 billion bushels vs. 1.745 billion estimated.

Phyllis Nystrom is a market analyst with CHS Hedging in St. Paul. v

News and information for Minnesota and Northern Iowa dairy producers

MIELKE MARKET WEEKLY By Lee Mielke

WASDE report shrinks milk production estimates

This column was written for the marketing week ending July 15.

The U.S. Department of Agriculture again lowered its milk production estimates for 2022 and 2023 in the latest World Agricultural Supply and Demand Estimates report, citing slower expected growth in milk per cow. It adds that the July 22 Cattle report will provide a mid-year estimate of the dairy cow inventory and producer intentions regarding retention of heifers for dairy cow replacement. 2022 production and marketings were estimated at 226 and 224.9 billion pounds respectively, down 400 million pounds on production and down 500 million on marketings from last month’s estimates. If realized, 2022 production and marketings would both be down 300 million pounds or 0.1 percent from 2021. 2023 production and marketings were estimated at 228.3 and 227.3 billion pounds respectively, down 1 billion pounds on production and 900,000 pounds less on marketings. If realized, 2023 production would be up 2.3 billion pounds or 1 percent from 2022.

The 2022 butter price forecast was raised from last month on firm demand, while the cheese price forecast was lowered on continued large stocks. Forecasts for nonfat dry milk and whey prices were unchanged.

With a lower cheese price, the 2022 Class III milk price was lowered while the Class IV price was raised due to higher butter prices. The 2022 Class III average was put at $22.80 per cwt., down a dime from last month’s projection, and compares to $17.08 in 2021 and $18.16 in 2020. The 2023 average is estimated at $20.85, up 20 cents from a month ago.

The 2022 Class IV average was estimated at $24.70, up a nickel from last month’s projection and compares to $16.09 in 2021 and $13.49 in 2020. The 2023 average is estimated at $22.30, up 40 cents from last month’s estimate.

The 2023, price forecasts for cheese, butter and nonfat dry milk were raised on expected lower production, but whey was lowered on expected weaker international prices.

The 2023 cheese price average was projected at $2.07 per pound, up 2 cents from last month’s estimate, and compares to an expected 2022 average of $2.1850. The 2021 average was $1.6755.

Butter was projected to average $2.44 per pound in 2023, up 5.5 cents from last month’s estimate, and compares to a projected $2.78 average in 2022, and a 2021 average of $1.7325.

Nonfat dry milk will average $1.645 in 2023, according to USDA, a 2.5 cent higher price than a month ago, up from a projected $1.755 in 2022, and the 2021 average of $1.2693.

Dry whey will only average 51.5 cents per pound in 2023, down from the projected 64 cent average in 2022, and compares to 57.44 cents in 2021.

This month’s U.S. corn outlook is for larger supplies and higher ending stocks. Beginning stocks were raised 25 million bushels, based on reduced feed and residual use as indicated in the June 30 Grain Stocks report.

Corn production was forecast at 14.5 billion bushels, up 45 million, based on greater planted and harvested area from the June 30 Acreage report. Acreage was increased 400,000 acres, while the yield forecast was unchanged at 177 bushels per acre. Ending stocks were up 70 million bushels. The season-average farm price was lowered 10 cents to $6.65 per bushel.

Soybean production was projected at 4.5 billion bushels, down 135 million on lower harvested area. Harvested area, forecast at 87.5 million acres in the June 30 Acreage report was down 2.6 million from last month. The soybean yield forecast was unchanged at 51.5 bushels per acre. n

The latest Crop Progress report shows 15 percent of U.S. corn is silking, as of the week ending July 10, 9 percent behind a year ago and 10 percent behind the five-year average. Sixty-four percent was rated good to excellent, unchanged from the previous week, but 1 percent behind a year ago.

Soybean blooming is at 32 percent, down from 44 percent a year ago and 6 percent behind the five-

Answers located in Classified Section

Matt Erickson Fertile, Minn. July 7

It’s fair time! The Land spoke with Matt Erickson on July 7 as he reported the Polk County fair is in full swing with daughters Catie and Sidney showing

“It’s been annoyingly busy.” The Land spoke with Leah Johnson on July 7 as she reported that all her soybean fields had been sprayed.their 4-H cattle. Although the fair has been a family tradition for the Ericksons, he has seen the number of fair attendees grow over the years. “It’s gotten to be really popular.” Taking a break from all the fair fun, Erickson likes what he sees in the fields. “I got all the sorghum and millet planted.” He also started cutting his firstcrop hay last week. “It was a really good crop.” Erickson seeded alfalfa on June 14. Strong winds followed, so he was unsure how the crop would do. So far, though, it’s coming up and looking good. 2022

The cows are all out to pasture. “The pastures are just tremendous.” The grass is so long that it can be tough to see the calves. But Erickson is happy to see all that grass. On July 4, Erickson vaccinated around 175 calves with help from his son, Emery. “Corn looks really good.” It’s anywhere from knee-high to waist-high. The crop has grown quickly, which is a relief to Erickson as he planted two weeks later than usual. “It’s pretty miraculous.” FROM THE FIELDS Compiled by KRISTIN KVENO, The Land Staff Writer Likewise, the soybeans are starting to fill the rows and doing just fine. “We just need to keep getting timely rains.” v Leah Johnson Evansville, Minn. July 7

The storm which hit Johnson’s farm on June 20 resulted in damaged grain bin roofs, but the crops seemed to have fared just fine. “In the last five days, even some of the toughest fields look good.” “The corn is past my chin,” Johnson said. Thankfully, the growth of corn has brought some relief. “It’s pretty marvelous what this crop can do. Optimism on the corn is sky-high. The farm received half an inch to one and a half inches of rain on July 4 weekend. “The beans have struggled with the timing of rain.” Johnson walked fields last weekend and had difficulty finding flowers in the later planted fields.  “We’re going to have fields that are never going to canopy.” That is a problem when it comes to weed  control. “We definitely won’t see fantastic yields.” Comparing corn and beans, it’s a tale of two different yield potentials. “The corn looks so good; it makes the beans look less good.” Johnson is closely monitoring the fields for signs of pesky plants. “We can’t let the weeds in.” v

See FROM THE FIELDS, pg. 16

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