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July 2013 Archive for From the Editor

RSS By: Brian Grete, Pro Farmer

Pro Farmer Editor Brian Grete takes time to talk with Pro Farmer Members about some of the key issues in each week's Pro Farmer newsletter.

Why you shouldn't rope a deer and grains need a change of attitude

Jul 26, 2013

July 26, 2013

Hello Pro Farmer Members!

Have you ever heard the story about the old Texas cowhand that decided he'd like to harvest one of the deer that had been sneaking up to his stock tank for a drink at night? And then they got so bold that they started eating out of the creep feeder in the middle of the day? And then they got so used to seeing him around and taking feed to the feeder that they were right there waiting for him and eating out of the feeder while he filled it?

No? You've never heard it?

Well... he wanted some venison for the freezer, but not from the scrawny critters that were at his feeder. He thought it'd be a great idea to rope one, lock it in the barn and feed it until it was fat on corn. He had a plan... got the rope on it... and once the 100-lb. deer realized it had a rope around its neck it took on the strength of 20 men and drug that old cowhand through cactus and thorn bushes and busted up his bones and blackened an eye before he finally cut it lose.

At that point, he decided he really didn't like venison.

That's kind of what it was like for bulls in the grain markets this week... and many decided they really don't like being a bull in the grain markets any more.

That's good. And while they decided they don't want to be a bull any more, they sure don't want to be a bear with uncertain crop potential and prices low enough to rebuild demand from the domestic feed and ethanol industries and from foreign feed makers. So the one-time bulls became wannabe bulls this week. Now they're on the sidelines waiting for the downside momentum to exhaust itself.

But even when that happens, the busted-up bulls in the corn and soybean markets won't likely jump right back onto the long side of the markets. They'll let the markets build a nice base... maybe even as they just drift lower to rebuild demand lost during the run to all-time highs just last year.

On the front page of this week's newsletter in the eartag column, I made mention that this year's market reminds us of the 2010-crop corn market. That year followed a big, but low-quality corn crop. Crop problems really didn't develop until later in the 2010 growing season and by the time the market believed corn yields wouldn't be as good as earlier advertised, demand was rolling back into the market. Exporters front-loaded needs and ended up buying about 1.95 billion bu. of our 2010-crop corn when prices were near the lows.

By the time we got the crop problems confirmed by USDA (at that time, a crop problem was a 152.8 national average yield) the new-crop cash corn bid had fallen to about $2.85 in July of 2010. By April of 2011, the 2010-crop cash corn bid was over $7.00.

Things changed quickly... kind of like the old cowhand's attitude about venison.
 

That's it for now...

... I'll be in and out of the office next week. My son Tom will have his market heifer and steer at the Bremer Co. Fair and I can't resist but to hang around the fair for a while. He shows on Thursday and I'll leave next week's newsletter in the capable hands of your Pro Farmer editorial staff next week.

But before I take a couple of days off next week, I'm going to take an aerial view of the Iowa and Minnesota corn crops on Monday. I'll get a report ready for the newsletter.

I'll also have something really cool in the newsletter next week. I've got all the details of how USDA NASS enumerators go about sampling corn and soybeans for USDA Crop Production Reports. I'll have those details for you on page 4 of the newsletter next week.

Follow me on Twitter at @ChipFlory

To join Pro Farmer, click here!

Time to talk about the soybean crop.

Jul 19, 2013

Chip Flory

From The Editor

July 19, 2013

Hello Pro Farmer Members!

We spend a little more time talking about soybean crop conditions in this week's newsletter, and I'll hit it again here.

First, there are some good beans across the Corn Belt and the eastern Belt bean crop seems to be getting just the right amount of stress (a rain-free week with some hot temps) at the right time of the year. The stress should really kick in the reproductive phase of the bean crop in the ECB and if the crop gets a rain early next week, it'll be tough to hold that crop back this year.

Second, there are some good beans in the western Corn Belt, as well... but they're harder to find in the WCB than in the ECB. The most immature bean crop around the PF headquarters in Cedar Falls, Iowa, emerged just this week. It's a small field just south of Denver, IA, on Highway 63. The most mature bean field I've seen is just north of the Waterloo, Iowa, airport on a gravel road: 20-inch rowed beans that have almost filled the canopy. These beans aren't knee-high, but at least they're bushing out.

Yellow spots are also starting to show up on beans. I'm not good at identifying early-season bean diseases, but this sure looks like iron chlorosis to me.

And beans are blooming... even the beans that have a lot of bare dirt exposed between rows and are only standing about a foot tall. The length of day is already telling them they better get started on the reproductive phase.

Condition of the crop is exceptionally variable. At this time of the year, if beanfields are green, they should be considered to be in at least good condition IF they are developing on time. These beans aren't developing on time, so I've got to rate most of the bean crop west of a line that runs from Manchester, Iowa, down to Stanwood, Iowa, "fair" -- at best. There are some better beans in Iowa on the west coast of the state and in the southwestern crop district, as well.

We've been working with a national average soybean yield estimate of 42 bu. per acre for several weeks, based primarily on slow plantings. We're still using that estimate in our balance sheets and will stick with it until we know more about the crop after the Aug. 18-22 Pro Farmer Midwest Crop Tour.

Another factor I've been trying to figure out this year is exactly where the Prevented Planted acres start in northeastern Iowa. I've been doing a fair amount of traveling in eastern Iowa the past few days, and I believe the farthest south Prevented Plant field I've seen is just west of Dunkerton, Iowa. There might be a few scattered fields south of that, but the Prevented Plant fields start to bunch up about 10 miles north of Highway 20. And as I understand it, the Prevented Plant intensifies moving north and west from Cedar Falls.

That's it for now...

... have a great weekend! If you've got County Fair this week, good luck to you all!

Follow me on Twitter at @ChipFlory

To join Pro Farmer, click here!

I can't talk about soybeans...

Jul 12, 2013

Chip Flory

From The Editor

July 12, 2013

Hello Pro Farmer Members!

I had a great week of vacation last week and this week was awesome with Leading Edge Conference in Des Moines, Iowa, on Monday and Tuesday and with a trip to my hometown of Oxford Junction, Iowa, to participate in the Wyffel's field day. It gave me a chance to spend time on the road and get an update on crop development and conditions across the center part of the state.

I drove Highway 30 from Marshalltown, IA, to Lowden, Iowa, before heading north to Oxford Junction. Between Des Moines and Keystone, Iowa, a small percent of the corn is absolutely pathetic and a small percent of the corn is really good. Development of the corn along that path ranges from six-inches tall to just about ready to tassel. The corn that was planted during Iowa's "big" planting week is just over fence-post high and probably still about two weeks from tasseling. Add another few days before the silks flow, and we'll see a lot of pollination in the last few days of July.

From Keystone to Stanwood, Iowa, the condition of the crop upticks from what I saw west of Keystone. It's not great, but it's not as bad as it is in the center of the state. Development pace is more consistent and is probably about a week ahead of the crop (on average) further west. That's not to say this is "good corn." Inconsistencies in development and stands are clearly evident across fields and from field to field. "Fair" describes the bulk of the corn from Keystone to Stanwood.

From Stanwood to Oxford Junction, conditions consistently improved. When I pulled up to the outskirts of OJ along Highway 136, we saw our first field of tasseled corn. It was an awfully pretty picture. Talking with the farm operator there, however, he says it's not as good as it looks from the road. He offered me a climb to the top of his grain leg, but with temps at about 88 degrees and humidity already making me sweat, I passed. But, he's been to the top of the leg... and he says the field isn't "full" of holes, but there are way more out there than he'd like to have.

As I drove home up I-380 between Cedar Rapids and Waterloo, the variability clearly returned to the corn crop and continued to deteriorate the farther north I traveled.

Around home (I live north of Waterloo a few miles), conditions are good... not great, but good. And on my drive home, there are six fields that still haven't been planted.

West of Cedar Falls on Highway 20, the corn is not good. There is zero consistency and some of that corn finally reached knee-high by the 12th of July. (See... it still rhymes, but that doesn't mean it's a "good thing.") It's that way all the way over to I-35 in the middle of the state.

I also had some reports in from Minnesota and northern Iowa west of I-35 this week. I give some of the highlights of those conversations on the front page of this week's Pro Farmer... check them out there.

What a great meeting!

First... a special thanks to Pro Farmer co-founders Merrill Oster and Jerry Carlson for helping us celebrate Pro Farmer's 40th Anniversary at our Leading Edge Conference. It was great getting caught up. We also had past-Pro-Farmer staffers Elizabeth Curry-Williams, Bob Coffman, Larry Grahm and Ron Michaelsen with us to jog some memories. It was really cool to see them talking and story-telling with the current Pro Farmer staff.

And thanks to all that attended the Leading Edge that helped make it a great success. We're already making plans for next year.

Vince Malanga, President of LaSalle Economics, Inc., New York, helped set the stage for many discussions at the conference. His bottom line: The Fed still has a lot of work to do; the economy is still struggling to get its footings; sequestration budget cuts will continue to be a drag on the economy at an increasing rate in the years ahead; and interest rates are likely to remain low for the foreseeable future.

Jim Wiesemeyer delivered the goods on his Washington Outlook on day 1 of the conference and put the concept of a split farm bill into the spotlight for the first time for many attendees. Brian Grete did a great job delivering the outlook for the markets, including a warning to "watch out for demand" with new-crop prices at current levels (nice call after today's announced corn sale to China).

Day 2 was dedicated to breakouts with Davis Michaelsen and Mike Walsten from the office doing a great job of informing attendees about input price trends and the land market. I spent four hours (yes... 4!!) doing marketing education for those looking to tune-up their marketing skills.

That's it for now...

... except for this. I talked only about corn crop conditions in my "route report" above. I can't talk about soybeans... the crop is just too scary to talk about at this point. It's still early, but the condition of the pathetic bean crop I've seen in Iowa so far this year will become a bigger market factor in the weeks (maybe days) ahead.

Follow me on Twitter at @ChipFlory

To join Pro Farmer, click here!

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