Corn+Soybean Digest

Corn Growers Responding to Market, NCGA Says

The National Corn Growers Association (NCGA) says the prospective plantings report released by USDA March 30 indicates corn farmers are responding to market demands by intending to plant 90.5 million acres in 2007. Last year, corn growers planted 78.6 million acres.

“Strong demand for corn in all market sectors – exports, livestock and ethanol – has put corn in the spotlight as producers get planting under way,” says Ken McCauley, NCGA president. “We’re confident corn farmers will produce another big crop given good weather.”

These intentions would indicate 83.5 harvested acres. If average trend yields of 152 bu./acre are realized, corn producers would be on track to produce 12.692 billion bushels in 2007, the largest crop on record.

If corn farmers carry through on these intentions, it will be the largest corn acreage since 1944, when producers planted 95.5 million acres. The June 29 report will provide a clearer view of 2007 corn acreage.

Iowa farmers intend to plant 13.9 million corn acres, up from 12.6 million acres in 2006. If realized, Iowa farmers will plant the most corn in the country.

Illinois farmers intend to plant a record 12.9 million acres this spring, up 1.6 million acres from 2006. Minnesota and North Dakota are the other Corn Belt states with record planting intentions this spring.

Several southern states are playing a big role in the increased acreage. Arkansas growers are expected to plant 560,000 acres in 2007, up from 190,000 in 2006. Louisiana farmers intend to plant 700,000 acres, up from 300,000 in 2006. Mississippi corn producers expect to plant 950,000 acres, up from 340,000 acres last year.

Corn+Soybean Digest

Bean Acres Way Down; Corn Way Up

The drop in projected U.S. soybean acreage is “the big number,” concluded three analysts commenting on the newly released USDA planting intentions report March 30. They are: Brian Basting, commodity research analyst for Advance Trading; Jim Bower, owner and president of Bower Trading, Inc.; and Jerry Gidel, president of Midland Research, Inc.

U.S. soybean plantings are projected to fall 11% to 67.14 million acres, an 11-year low, USDA reports. At about 8.38 million acres less than last year, this was much larger for the 6-million-acre drop largely anticipated by the trading community, the Chicago Board of Trade-sponsored panel said.
“The bean number is bullish to wildly bullish; it caught the market by surprise,” Bower said.

The soy market has a big job to do over the next six months, analysts agree, to supply enough beans. Factors influencing the bean market ahead include continuing global demand for protein, a bountiful South American crop, and a too-strong Brazilian real value relative to the dollar, the analysts said.

“Projected corn acreage is above trade expectations; the market did its job,” Bower added. “It knew it had to buy more acres; it got the acres that it wants to satisfy global demand.” USDA announced 2007 intended corn plantings of 90.5 million acres, up from 78.6 million in ’06.

If corn farmers carry through on these intentions, it will be the largest corn acreage since 1944, when producers planted 95.5 million acres. The June 29 report will provide a clearer view of 2007 corn acreage.

“We will definitely need good yields for this year,” said Gidell. “Using 152 bu./acre as a yield average, we will need very timely planting.” Planting a tremendous amount of corn by May 15 “will be hard to do on a timely basis,” Gidel added.

“The corn acreage numbers obviously indicate that areas beyond the Corn Belt responded to market signals. “The next 45 days will be very critical, getting the crop in the ground and safely through pollination.”

The National Corn Growers Association (NCGA) reports that Iowa farmers intend to plant 13.9 million corn acres, up from 12.6 million acres in 2006. If realized, Iowa farmers will plant the most corn in the country. Illinois farmers intend to plant a record 12.9 million acres this spring, up 1.6 million acres from 2006. Minnesota and North Dakota are the other Corn Belt states with record planting intentions this spring, NCGA said.

Several southern states are playing a big role in the increased acreage, NGA reported. Arkansas growers are expected to plant 560,000 acres in 2007, up from 190,000 in 2006. Louisiana farmers intend to plant 700 thousand acres, up from 300,000 in 2006. Mississippi corn producers expect to plant 950,000 acres, up from 340,000 acres last year.

We may be due soon for a year of sub-par corn yields, Bower pointed out. “For the past hundred years, we’ve had 2.5 years of each decade where corn yield has been 7.5% or more below the trend line,” he said. “So far this decade we’ve had one year below the trend line by that much. Sometime in the next few years the odds are high that one of those years will not be a high producing year. Even with this big corn acreage number, we are still going to have to have the yield.”

Obtaining corn crop inputs in a narrow planting window shouldn’t be a problem in the Corn Belt, Bower said, but “fringe areas” could see some logistical challenges.

When asked whether and how soybean rust could affect the tight U.S. soybean crop this year, Bower replied, “Our producers will have to be on top of it and learn from what the Brazilians have done (in controlling rust).” Many Brazilian growers have full-time agronomists and can handle the rust situation extremely well, he said.

“This is going to be a numbers year, opinions are almost worthless,” Bower said. “I am a little threatened with this La Nina situation. I have two of the best meteorologists telling me not to discount La Nina. Both have mentioned this cold wet scenario getting ready to come in the next two to three weeks that is indicative of La Nina.

Bower added, “This is going to be a numbers year, opinions are almost worthless.”

The effect of rapidly rising corn yields should help this year, Basking said. “In 2004 the record corn yield was 142 bu.; now we are at 160. If I’d said we’d have an 18-bu. increase in such a short time, you’d have laughed me off the stage.

“We have big potential for a good crop this fall but also huge volatility over the summer,” he says.

Much hinges on the weather the next 45 days, Basking says. “It boils down to how it gets planted, how it gets pollinated.” He urged corn growers to look at more than one year. “Look at ’08, input costs are rising; we will need a big corn crop for several years.”

If average trend yields of 152 bu./acre are realized, corn producers would be on track to produce 12.692 billion bushels in 2007, the largest crop on record, NCGA reported.

U.S. farmers harvested the third-largest crop ever last year, after planting 78.3 million acres. U.S. soybean production rose 4.1% to a record 3.188 billion bushels in 2006 compared with 3.063 billion in 2005. The U.S. is the biggest producer and exporter of both crops.

Corn+Soybean Digest

Report Implies Slower Corn Feed Use

USDA’s quarterly grain stocks report showed March 1 corn stocks on the high side of trade expectations, while wheat and soybean stocks were lower than expected.

The March 30 report confirmed trade speculation that high corn prices slowed corn feed usage and boosted wheat feeding slightly during the second quarter of 2007-08.

USDA pegged March 1 U.S. corn stocks at 6.070 billion bushels, compared with trade estimates averaging 6.023 billion bushels in a range from 5.906-6.390 billion bushels.

While corn stocks were down 13.1% from a year earlier, the data indicates 2007-08 corn ending stocks will be higher than USDA’s most recent estimate of 752 million bushels.

The corn stocks data implies record second quarter corn disappearance, up from 1.1% from a year earlier, however, that rate of usage is lower than the rate suggested by USDA supply/demand projections.

March 1 wheat stocks were reported by USDA to be 855 million bushels, below trade estimates that averaged 881 million bushels in a range from 857-901 million bushels.

Wheat stocks were down 12% from the year-earlier level of 972 million bushels.

Implied wheat usage of 460 million bushels for the third quarter of the wheat marketing year was up marginally from a year earlier despite higher wheat prices.

Soybean stocks were also on the low side of trade expectations. USDA pegged March 1 soybean stocks at 1.784 billion bushels versus trade estimates averaging 1.801 billion in a range from 1.765-1.830 billion bushels.

Although lower than trade expectations, March 1 soybean stocks were still up 6.9% from a year earlier and were a record high for the date.

While the stocks data suggests 2007-08 soybean ending stocks may will be moderately lower than USDA’s current projection of 595 million bushels, ending stocks should still be record high.

Corn+Soybean Digest

Market News

Corn Acres Seen Highest Since WWII

Driven by surging ethanol production, U.S. farmers intend to plant more than 90 million acres of corn for the first time since the end of World War II, according to the Prospective Plantings Report released by USDA on the morning of March 30.

USDA pegged March 1 U.S. corn planting intentions at 90.45 million acres, near the high end of trade expectations that averaged 88.06 million acres in a range from 86.30-90.67 million acres.

If producers follow through on those intentions, corn acreage would be the highest since 1944 and would be up 15.5% over least year’s final plantings of 78.33 million acres.

Soybean planting intentions were pegged by USDA at 67.14 million acres, toward the low end of trade estimates averaging 69.17 million acres in a range from 65.93-70.80 million acres and down 10.7% from last year’s final plantings estimate of 75.22 million acres.

If soybean planting intentions are accurate, U.S. soybean acreage would be the lowest since 1996.

As expected, USDA reported that spring wheat and cotton planting intentions for 2007 are also down.

Spring wheat acres will not be down quite as much as expected. USDA pegged “other” spring wheat planting intentions at 13.80 million acres, compared with trade expectations averaging 13.68 million acres in a range from 12.5-14.4 million and 2006 seedings of 14.90 million acres.

Durum wheat intentions were put by USDA at 1.99 million acres, compared with trade estimates averaging 1.98 million and last year’s seedings of 1.870 million acres.

On a percentage basis, cotton is expected to lose the most acreage of any of the major crops, with planting intentions down 20.4% from last year’s final acreage of 15.27 million acres.

USDA pegged cotton planting intentions at 12.15 million acres compared with trade estimates averaging 12.3 million acres in a range from 11.8-12.8 million acres.

Editor’s note: Richard Brock, The Corn And Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

To see more market perspectives, visit Brock's Web site at www.brockreport.com.

U.S. Senate blesses bill earmarking funds for farm freeze, heat relief

Federal disaster relief for farmers impacted by freeze and heat-struck crops and livestock in 2006 and 2007 is one step closer to fruition following the U.S. Senate’s passage of a fiscal year ’07 supplemental appropriations bill on March 29.

The $4.151 billion package includes an array of assistance including emergency farm relief for farmers across the country, including millions in assistance for farmers impacted by extreme heat and cold that hit in ’06 and ‘07. The bill also provides assistance for farm workers left unemployed as a result of the freeze.

“California’s citrus and dairy industries have suffered enormous crop and livestock losses in recent years from severe weather incidents,” said Sen. Diane Feinstein, D-Calif. “But the Senate has now approved millions of dollars of relief to help these struggling farmers and dairymen recover from the financial setbacks they have endured because (of) these natural disasters.”

According to Sen. Feinstein’s website, the agricultural breakdown includes:

- $2.09 billion for crop loss compensation nationwide for disasters from ’05 to ’07. Farmers would apply to the Farm Service Agency for compensation;

- $1.498 billion for livestock loss compensation nationwide for disasters from ’05 to ’07;

- $100 million for small business and farm worker assistance nationwide;

- $95 million for California milk production losses due to the ’06 heat wave; and

< - $40 million for farmers to rehabilitate or replace trees impacted by the ’07 freeze.

The House passed its own supplemental bill on March 23. The two legislative versions now head to conference committee for reconciliation work.

email: cblake@farmpress.com

International market Cotton fiber length uniformity concerns mills

International buyers of cotton are increasingly looking at the length uniformity index (LUI) as an indicator of how well the fiber will work on their ring spinning machines.

Unfortunately, says Vikki Martin, associate director of fiber quality for Cotton Incorporated, “This is one fiber quality trend for U.S. cotton that has declined over the past several years. We've taken a pretty good hit in the international marketplace on LUI.”

In 2004, she told members of the Southern Cotton Ginners Association at their annual meeting at Memphis, “only 41 percent of the U.S. crop met this highly desirable quality level for the international market; in 2005, only 17.2 percent; and in 2006, only 29.9 percent.”

U.S. textile mills, Martin noted, predominantly use open-end rotor spinning equipment; for them, strength is the most important fiber quality parameter.

“In the overseas market, they mainly use ring spinning equipment and fiber length is their No. 1 fiber quality factor. Strength in a ring spinning operation is directly related to fiber length.”

The change in the U.S. cotton industry from a chiefly domestic market to one that's export driven has brought significant changes in the fiber qualities that buyers want, she said.

“Less than 10 years ago, we were using 70 percent of the cotton produced in the U.S. in our domestic textile mills. Now, most of our cotton is going to the international market.”

The base quality that international buyers are expecting, Martin said, “is higher than what we've traditionally produced in the United States. Now, they're wanting 35-26 staple, 27-28 grams per tex, 3.8-4.6 micronaire, 82 length uniformity index or better, 21-31 color grade, and 2-3 leaf grade.

“Those higher expectations by foreign mills are based in large part on tradition and logistics — they traditionally have bought higher quality than they needed because, so far away, they don't have the luxury of getting another shipment next week.

“And with their utilization of ring spinning equipment, there is now also a strong manufacturing reason for specifying higher quality.”

An analysis of the U.S. crop over the past two years shows just over 30 percent would meet the minimum quality expectations of international buyers, Martin said.

As for the increasingly important LUI, she said, “Unfortunately, we don't really know what impact variety, weather, and other influences have on this. We do know that, going forward, breeders are going to need to pay more attention to things such as fiber length distribution.”

Comparing the U.S. and Chinese cotton crops, “We can see that they consistently have a higher LUI than we do.”

Neps (immature cotton fibers) are another concern in the cotton quality equation, Martin said.

“You don't know they're there until they show up in the fabric and it's too late to do anything about it. Neps won't dye, resulting in white specks in the fabric.

“Seventy-five percent of the world's cotton is still harvested by hand, which results in fewer neps. U.S. conventionally-harvested cotton averages 250 neps per gram; stripper cotton 360 neps per gram; while the world average is only 150 neps per gram.”

The No. 1 controllable quality issue for U.S. cotton, Martin said, is contamination.

“We enjoy an excellent reputation for having very low levels of contamination, but there are still problems with plastic Wal-Mart bags, bird feathers, etc. International buyers would like a guarantee of 100-percent contamination-free cotton. That's totally unrealistic, but anything we can do to further minimize this problem will be to our advantage.”

China is the largest textile producer in the world, Martin noted, and “huge increases in textile consumption occurred in that country from 2002-2005. That's expected to continue.

“Merchandisers there have been taking a lesson from the U.S., studying what consumers want and targeting their products to specific ages and buying groups. The Chinese retail market is mainly women ages 20-34, and the leading shopping item is clothing, even ahead of food.”

Pecan growers prepare for orchard workshop

Mississippi pecan growers can learn more about how to maintain their orchards at an April 4 workshop in Crystal Springs, Miss. The half-day workshop begins at 9:30 a.m. at Mississippi State University's Truck Crops Experiment Station. Lunch will be provided following the workshop.

Topics for discussion include crow control, pecan tree pruning and thinning, and how to sample and grade pecans for optimum marketing strategies.

The workshop is sponsored by MSU's Extension Service, the Mississippi Agricultural and Forestry Experiment Station and the Mississippi Pecan Growers Association.

The Truck Crops Experiment Station is located on Highway 51 in Crystal Springs, 25 miles south of Jackson. Take exit 68 off Interstate 55 to get there. For more information, contact David Ingram at (601) 857-2284 or by e-mail at davidi@ext.msstate.edu.

Asian soybean rust spores discovered in Iowa residue

Asian soybean rust spores were found in mid-March on soybeans grown in Iowa. While a first for Iowa, the ASR discovery had no market consequences and generated little alarm.

Like other ASR finds, the Iowa incident was an accident. “It was an absolute fluke, actually,” says David Wright, Iowa Soybean Association director of contract research. “A gentleman was removing soybeans from a grain bin in southeast Iowa and noticed some plant residue that didn't look quite right. He gathered it and sent it in to the diagnostic lab at Iowa State University (ISU). Shortly thereafter, it was diagnosed as ASR.”

Following protocol, the ISU lab then sent samples to the USDA laboratory in Beltsville, Md., for final confirmation. Further tests there — including molecular analysis — proved positive for the disease.

ASR, which can devastate soybean yields through premature defoliation, has been a problem in soybean-growing areas of South America for years. It first showed up in the United States in the fall of 2004 when it was found outside Baton Rouge, La.

The disease is combated with the use of fungicides and a large monitoring effort. While it has steadily spread through the South, ASR has yet to hammer U.S. yields.

“The big news in this is that ASR made it to Iowa,” says Wright. “Beyond that, really, this discovery isn't that big of a deal. It certainly has no bearing on what will happen in the coming months. By itself, this is no concern for the 2007 crop.

“I'm quite surprised at the amount of attention this particular ASR find is getting. We've always believed ASR could reach Iowa and this proves that and lets us know it could show up again. It likely will.”

To survive, ASR must be on green tissue. “That's an absolute. That means any spores on the crop residue, intermingled with the seed, are undoubtedly dead. Previous research shows that the viability of such spores decreases rapidly. Eight weeks following the tissue's death, there will be no spores left alive.”

The infected Iowa soybeans were harvested last Oct. 10. “Here we are in March, so those spores are dead.”

“In the past, we've had 20 sentinel plots. That's the same number as in many other states. We'll have the sentinel plots again this year. We'll also proceed with the same education and message to producers that we've been giving right along. That is: you should be vigilant in scouting fields and keep your ears open to Extension reports. When the risk for ASR increases (the Iowa ASR monitoring team) will immediately tell producers.”

The find is “very interesting and should be a wake-up call for soybean producers (outside the South),” says Wright. “Some producers have become a bit complacent here in the Midwest believing ASR hasn't shown up in two years and so it won't ever. This shows that isn't the case.”

Helios Technology extends crop protection products

Loveland Products, Inc., has launched Helios Technology to extend the effectiveness of many crop protection products by delaying active ingredient breakdown under ultra-violet sunlight. The first product developed with Helios Technology, Tombstone Helios, received federal registration in February.

Patent-pending Helios Technology was developed in LPI labs in Greeley, Colo., as a formulation technology that can be included during the manufacture of products such as herbicides, insecticides and fungicides.

A product that would normally break down in sunlight will provide continued protection with Helios Technology. This will improve product performance on stubborn or late-flushing weeds, new arrivals of insects, and additional disease spores.

“Our objective was to develop a technology platform that could improve current products as well as transcend numerous active ingredients,” says Chris Stickler, director of tech services and development at LPI.

“We recognize there are many very good products on the market that are susceptible to ultraviolet degradation. These include pyrethroids, dinitroanalines and neonicotinoids, as well as many other commonly used pesticides.

“Helios Technology is not a new active ingredient, but rather a way to enhance current active ingredients on the market to extend performance and provide better results for farmers and ranchers using them.”

Tombstone Helios will be the first product with the new technology and will be available for the 2007 crop season. Loveland expects other products to follow as field results help determine which will benefit the greatest from Helios Technology.

“Tombstone Helios is an LPI proprietary pyrethroid insecticide that combines cyfluthrin with Helios Technology,” notes Casey McDaniel, LPI product manager. “Tombstone Helios will offer growers proven cyfluthrin performance with longer residual control than standard pyrethroids.

“Active ingredient degradation from ultraviolet light is perhaps the greatest threat to pyrethroid performance after application. Helios Technology will protect that pyrethroid molecule, keeping it fully active longer. A few extra days of protection can make a big difference both in crop quality and in the grower's wallet.”

Tombstone Helios will be available exclusively from UAP in 2007. Contact local UAP representatives for additional information.

Parazone herbicide for broad-spectrum control

Makhteshim Agan of North America, Inc., has a new addition to its herbicide portfolio with the registration of Parazone 3SL.

Recently registered by EPA, Parazone is a broad spectrum, non-selective, burn-down herbicide that is also used as a defoliant and desiccant with multiple uses on over 100 crops including corn, soybeans, grapes, cotton, alfalfa and many fruit trees and vegetables.

Parazone 3SL, containing the active ingredient paraquat, provides fast, effective control against tought weeds, sedges and grasses in a formulation that is 50 percent more concentrated than the leading brand.

Parazone contains the same active as Gramoxone Max and eliminates weeds in as little as 48 hours.

“Parazone is formulated for use as a harvest aid, in preplant burn downs and for orchard-floor management to provide fast, effective, broad spectrum weed control,” said Dave Downing, MANA herbicide senior product manager.

“Also an effective tool for resistance management, it offers a different mode of action that works against glyphosate-tolerant weeds.”

Concentrated and packaged in convenient containers, Parazone is easy to apply and simple to handle and it mixes well with other herbicides.

Like all products featuring the active ingredient paraquat, Parazone is a Restricted Use Pesticide and can only be used by certified applicators or persons under their direct supervision.

“The bottom line is that new Parazone 3SL herbicide provides efficient, fast-acting, broad-spectrum weed control on a variety of crops at a value that ultimately saves the grower money,” added Downing.

For more information about Parazone 3SL or other MANA crop protection products, talk to a local ag retailer or visit www.manainc.com.