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Articles from 2017 In March


Continued demand for farmland by local operators like Brayton Turner left are helping to maintain rates suggests Professional farm manager Matt Clarahan right Turner will be operating a farm managed by Clarahan for the first time in 2017 Here the two are reviewing a modified crop share lease and discussing newly installed drainage tile on the farm
<p>Continued demand for farmland by local operators like Brayton Turner (left) are helping to maintain rates, suggests Professional farm manager Matt Clarahan (right). Turner will be operating a farm managed by Clarahan for the first time in 2017. Here the two are reviewing a modified crop share lease and discussing newly installed drainage tile on the farm.</p>

Understanding the difference in ARC-CO payments

Fewer farm operators across the United States will be receiving significant 2016 ARC-CO farm program payments from the USDA Farm Service Agency (FSA) in October, 2017, as compared to ARC-CO payments received for the 2014 and 2015 crop years. Most crop producers in Minnesota, Iowa, and other Upper Midwest States are enrolled in the county yield-based Ag Risk Coverage (ARC-CO) farm program choice on their corn base acres. Farm operators in a high percentage of counties in the Upper Midwest earned corn ARC-CO farm program payments for both the 2014 and 2015 crop years. Some producers also earned a soybean ARC-CO payment in one or both of the years.

Many producers are having difficulty understanding why there is such a wide variation in the estimated ARC-CO payments from year-to-year, and from county-to-county in a given year. Some counties may have had similar corn yields in 2016, based on yield estimates from the USDA National Agriculture Statistics Service (NASS); however, the estimated level of 2016 ARC-CO payments may vary considerably from county-to-county. The direct payments that existed under the last Farm Bill, which were in place for nearly two decades, were guaranteed and were paid to producers on the basis of crop base acres, regardless of crop prices or yields. By contrast, the ARC-CO payments in the current Farm Bill vary from year-to-year, and from county-to-county, depending on the national average prices and county yields in a given year.

Overall, 2016 ARC-CO payments for corn and soybeans are likely to much less prevalent in most portions of the Upper Midwest, as compared to 2014 and 2015 ARC-CO payment levels, partially due to a significant decline in the benchmark (BM) price levels. The BM prices are used to calculate the BM revenue for a given crop in a county for a year. A decline in the BM revenue lowers the “threshold level” for earning ARC-CO payments for a crop. In both 2014 and 2015, the BM price for corn was $5.29 per bushel, compared to the final national market year average (MYA) prices of $3.70 per bushel for 2014 and $3.61 per bushel for 2015, which resulted in some significant corn ARC-CO payments in many counties. For 2016, the BM corn price, which is a 5-year (2011-2015) “olympic” average price, dropped to $4.79 per bushel. Similarly, the soybean BM price dropped from $12.27 per bushel for the 2014 and 2015 crop years to $11.79 per bushel for 2016.

The BM prices and actual crop prices for determining ARC-CO payments are based on the actual national market year average (MYA) crop prices. The MYA price is the national average corn or soybean price from September 1 in the year of harvest until August 31 the following year, with MYA prices being finalized on September 30 of the following year. The MYA price is the 12-month national average price for a commodity, based on the average market price received by farm operators across the United States, which is then “weighted” at the end of the year, based on the volume of bushels sold in each month. As of March 1, 2017, USDA estimated the 2016 MYA prices at $3.40 per bushel for corn, and $9.60 per bushel for soybeans.

ARC-CO payments for a given crop are paid when the actual calculated county revenue for the crop falls below 86 percent (.86) of the county benchmark (BM) revenue guarantee for that crop in a given year. The actual County revenue is the final county FSA yield times the final national MYA price for the year. This rather complex calculation formula has resulted in a wide variation in the corn and soybean ARC-CO payments from county-to-county, which is a trend that will continue for the estimated 2016 corn ARC-CO payments, and has resulted in some confusion surrounding the level of the ARC-CO payments. 

The national BM price for corn or soybeans for a given year, and the final MYA price for the year, are the same in every county in the U.S., which affects the maximum payment level, and the overall likelihood of ARC-CO payments. The main variable in differences in ARC-CO payments from county-to-county in a given year is the difference in county benchmark (BM) yields and final county crop yields for that year. There was a decline in the county benchmark (BM) corn yields in most counties in Minnesota and adjoining States for 2015, as compared to 2014 BM yields, which resulted from using a different 5-year period for the calculation. Many of the BM corn yields for 2016 stayed the same as 2015 BM yields, except in a few isolated counties in southern Minnesota and Northern Iowa that had a slight increase in their 2016 BM yields. The lower BM yields result in a reduced potential maximum ARC-CO payment for a crop in a given year. The lower BM yields also lower the county BM revenue guarantee for a crop in a given year, which lowers the likelihood of ARC-CO payments for that year. County BM yields for soybeans in most counties have been much more stable from 2014-2016.

The relationship between the final county yield and the county benchmark (BM) yields is extremely important in calculating ARC-CO payments for corn and soybeans. Expressing the county yield as a “% of BM Yield” is actually more important than the actual final county yield in determining estimated ARC-CO payments in a county for a crop in any given year. For example, on estimated 2016 corn ARC-CO payments, any county that has a corn “% of BM yield” of 106% or less will likely realize the maximum estimated 2016 corn ARC-CO payment for that county. Counties with a “% of BM yield” of 107% to 120% will likely receive a partial 2016 corn ARC-CO payment, and counties at 121% or higher will likely not receive a 2016 payment. For soybeans, counties with a “% of BM yield” of 106% or higher will likely not receive a 2016 ARC-CO payment.

There will likely be a large difference in the 2016 corn ARC-CO payments from county-to-county, depending on the final 2016 county yield, expressed as a “% of BM Yield”. It appears that many counties in South Central and Southeastern Minnesota, as well as in Northern Iowa, will get a partial 2016 corn ARC-CO payment; however very few will get the maximum payment. Many counties in this region had 2016 corn yields that were similar or lower than 2015 corn yields. Except for a few counties, most counties in Western Minnesota, as well as many counties in Eastern North and South Dakota, will not receive a 2016 corn ARC-CO payment, due to the very high 2016 corn yields compared to the BM yields in those counties. Almost no counties in the Upper Midwest are expected to receive a 2016 soybean ARC-CO payment, as a result of very strong 2016 soybean yields, and the increase in the estimated soybean 2016 MYA price, as compared to 2015.

The current 2016 corn and soybean ARC-CO payment estimates are based on the 2016 NASS County yields and the current MYA prices; however, the final payments could vary based on changes in the MYA price levels between now and August 31, 2017. If MYA prices decline, the likelihood or the level of ARC-CO payments increases, and vice-versa if the MYA price increases. USDA could also make adjustments in the announced NASS yields to arrive at the final 2016 FSA County yields, which are used to calculate 2016 ARC-CO payments. There will likely be a 6.8 percent Federal sequestration reduction on all 2016 ARC-CO payments that paid in October, 2017, similar to the 2014 and 2015 ARC-CO payments.

Previous county yields for corn, soybeans, and other crops, benchmark yields, FSA yields, 2014 and 2015 ARC-CO payment levels, and other farm program information are available on the FSA ARC-PLC web site, which is at:   www.fsa.usda.gov/arc-plc. Kent Thiesse has prepared an Information Sheet titled: “Estimating 2016 Corn and Soybean ARC-CO Payments”, which contains several tables relating to 2016 ARC-CO payments. He has also prepared “2016 ARC-CO Payment Estimate Tables” for most counties in Minnesota, Northern Iowa, and Eastern North and South Dakota. To receive a copy of the Information Sheet and Payment Tables, send an e-mail to: kent.thiesse@minnstarbank.com

120 bushelsoybeans

Understanding 120-bushel soybeans

THINK Different.

Iowa State University cropping systems scientist Dr. Sotirios Archontoulis aims his soybean yield research at understanding the complex dynamic interactions between soils, crops, climate and management. In a recent modeling project, he looked at all those factors to try to learn the primary differences that resulted in 107- to 122-bushel soybean yields at Kip Cullers’ farm in southwest Missouri compared to more common 45- to 55-bushel yields in ISU fields near Ames, Iowa. What he found surprised him, and might surprise you, too.

------------

 

Dr. Sotirios Archontoulis knows that soil organic matter, nitrogen (N) cycling, soybean varieties, temperatures, rainfall, fertilization, planting dates/rates and more goes into the equation that determines soybean yields. “No single factor can predict and explain yield levels and variability,” he says. “There are a lot of interactions, and you need a systems approach to understand the complex dynamics of growing soybeans.”

Still, when the Iowa State University (ISU) Assistant Professor of Integrated Cropping Systems posed the question about which factor was most important for record yields—soil conditions, management, cultivar characteristics, or weather—he was surprised at the role management played on radiation interception and conversion to biomass.

“I thought weather, variety and soil conditions were really important, and they are, but I was surprised at how much more yield we could expect with proper management that allows soybean varieties to intercept and efficiently use more light to produce biomass and grain,” Archontoulis says.

 

Similar radiation energy

“Before the analysis, I thought that radiation levels were higher in Missouri compared to Iowa but that wasn’t the case. Both fields received about the same radiation energy. So it’s a matter of interception and utilization of this energy—management is the key here. Theoretically, a 100 megajoule per square meter in extra radiation interception in August produces about 10 extra bushels for soybeans. An average sunny day provides about 25 megajoules per square meter in Iowa.”

Archontoulis put the soils, crops, climate and management inputs that resulted in 107- to 122-bushel soybean yields at Kip Cullers’ farm in southwest Missouri into a crop systems model (APSIM; Agricultural Production Systems sIMulator) and compared them to inputs for the 45- to 55-bushel yields in ISU fields near Ames, Iowa. He compared inputs and outputs for crop years 2011-2013. Data from Kip Culler’s field over 2011-2013 were taken from literature (Ryan J. Van Roekel and Larry C. Purcell; Crop Sci. 54:1–8 (2014). 

 

More biomass, more yield

His modeling shows that interception of sunlight (20% more) and radiation use efficiency (conversion of light to biomass, 15% more) produced more biomass to account for much of the doubling (60-bushels plus per acre increase) in Culler’s field compared to yields in Ames. “The harvest index—grain to biomass ratio—was the same between fields; the higher yield was a result of greater biomass production,” Archontoulis says.    

In 2011, Ames yields were 55 bu/acre compared to Cullers yield of 109 bu/acre. In 2012, a dry year, irrigation was a key component to Cullers yield of 107 bu/acre compared to 46 bu/acre yields in Ames. A non-irrigated, non-fertilized field Cullers used for comparison that year yielded only 18 bu/acre, illustrating the importance of irrigation when rainfall was limited. In 2013, when rainfall was less of a yield-limiting factor at the Cullers farm, his field with no irrigation or fertilizer yielded 58 bu/acre compared to 45 bu/acre in Ames, but his field with irrigation and manure application yielded a whopping 122 bu/acre. The Archontoulis model credits irrigation for a 46% increase and increased radiation use efficiency with another 68% of the yield jump. 

 

More water and fertility

Water requirements go up for high yields, as well as fertility requirements. “Frequent irrigation application decreases canopy temperature to relieve stress, as well as supplies water needs. Higher nutrient application rates also reduce stress to the plant. If more nitrogen is available to the soybean plant, it doesn’t have to expend energy fixing it and perhaps this energy can be allocated towards biomass production,” Archontoulis reasons.

“Maximum photosynthesis at the Culler farm was achieved throughout the growing season with high nutrient levels—the 120 bu/acre yields were achieved with 650 pounds of N uptake. This means that the application of nitrogen (via manure) to the soil was at least in the magnitude of 1,000 lbs. N/acre. Soil N mineralization and N-fixation contributed little to the total N uptake as simulated by the model. Archontoulis’ model didn’t include an economics analysis of nutrient application.

Archontoulis has run 37 weather-years of simulations in model scenarios that show varieties with a 12% increase in radiation use efficiency could result in 75 bu/acre yields, compared to baseline yields of 66 bu/acre from 1980 to 2016. Those yields bump up to above 80 bu/acre if the radiation use efficiency increase is coupled with early planting (April 24) and 3.5 maturity group soybeans. Although this analysis was for central Iowa, similar results would be expected for other locations in Iowa, Archontoulis says.

 

Narrow rows, more seeds

Yields go higher again with 15-inch row spacing, and higher yet by adding heavy seeding rates (145,000 seeds/acre.) If soil moisture is not limiting or irrigation is added to that mix, soybean yields could approach 90 bu/acre in Archontoulis’ model.

The radiation intercepted during the growing season on Cullers’ farm was 20% more than that of Ames. “The growing season is shorter here in Iowa—if we could have fewer cloudy days especially during August, that would make a big difference,” Archontoulis says. “But we can’t make that happen, so we need to find other ways to help soybeans intercept more sunlight and become more efficient at converting that sunlight into biomass.”

That’s not an easy thing to do, Archontoulis acknowledges, but he believes it’s possible. “Model scenario analysis indicated that boosting yield levels from 65 bushels per acre to 100 bushels per acre in central Iowa requires a combination of different practices, not just one change,” Archontoulis says. (See charts).

 

Convert more light to biomass

 “What we have to remember is increasing yields from 65 to 100 bu/acre will be a multi-step approach and experience,” Archontoulis says. “Changing just one factor alone – an earlier planting date, a longer maturity, N fertilization, or irrigation – will not work in most cases if we don’t first manage for #1, 2 and 3 (see sidebar story). We have to increase the demand (biomass production) to see a response to supply (nitrogen).”

Current research shows a radiation use efficiency factor of 1.25 in Cullers’ field, compared to .73 in a typical central Iowa field near Ames. “The typical RUE value used in crop models is .88,” Archontoulis says. “There isn’t any evidence that root growth limits soybean yields. What we need to shoot for is more light interception and efficient conversion of radiation into higher yields.”

 

Harnessing sunlight key to high soybean yields

High yield combo
Different combinations (right side of graph) of early planting, longer maturity varieties, irrigation, 15” row spacing, increased radiation use efficiency and higher seeding rates would boost soybean yields the most, up to 90 bu/acre, according to an ISU crop model.
Graphic courtesy ISU

Soil conditions, soybean cultivars, and weather are all important factors in achieving record soybean yields. But an Iowa State University analysis of a “systems approach” coupled with modeling shows one key to higher yields is cultivars with longer maturity dates, coupled with management that increases light interception and supplies nutrients and water in ways that maximize radiation use efficiency. 

 

Tips to bump bean yields over 100

After running 37 weather-years of model simulations, Iowa State University cropping systems scientist Dr. Sotirios Archontoulis believes more producers could achieve 100-bushel per acre and even higher soybeans yields. His model scenario analysis indicates it will take a combination of practices, though, rather than a single change in management.

 

Blue bars in a model simulation show how a combination of factors grew yields on Kip Cullers farm in 2011. Red bar is actual yield, green bar is comparison to average yields in central Iowa.

Archontoulis studied yield winner Kip Cullers’ operation in Missouri and modeled the differences in average yields vs. Cullers’ record yields (see graph “scenario to 100 bushels/acre yields”). After that exercise, Archontoulis has three practical tips for Iowa soybean farmers to increase and perhaps even double current yields:

1) Manage for maximum light harvest (narrower rows);

2) Manage for “green” and “healthy” canopy throughout the season--every megajoule counts!);

3) Manage for non-limiting P, K and other micronutrients in the soil.

“Everything counts towards achieving a high conversion efficiency of light to biomass,” Archontoulis says.

Also consider:

4) Planting date and maturity variety. Planting date and maturity set the yield potential—both choices are very important. If you set a low yield potential at the start of the season, there is nothing that you can do later on to increase yields. A combination of earlier planting and longer maturity increases yield potential (more days to grow, more light interception, theoretically higher yields).

5) Irrigation. Irrigation pays off in the sandy soils within the Cullers field in Missouri. In his fields with high daily temperatures, the canopy temperature cooling offered by irrigation is also very important. But Iowa is different. The Iowa soils have a higher capacity to store water and shallow water tables, so water doesn’t limit plant growth.

6) Nitrogen. We have to find the optimum balance between N fixation, soil inherent fertility and nitrogen application in Iowa. For yield levels up to 70-80 bushels, nitrogen from fixation and soil organic matter mineralization is probably enough. Once other factors are optimized, we should deal with extra N application in Iowa.   

7) Increased radiation use efficiency. This is all about taking maximum advantage of sunlight to convert radiation to plant growth. It includes management to ensure all needed nutrients and water are available to maximize the power of sunlight in the photosynthesis process. That means higher nitrogen rates as well. All systems should be “go” when the sun shines.

8) Higher seeding rates. While most studies show soybean plants compensate for one another at lower seeding rates, when maximum yields are the goal, and all other factors are topped out for 100-bushel yields, more plants can be supported, and they will make more use of available sunlight during the growing season.

7-ag-stories

7 ag stories you might have missed this week - March 31, 2017

Need a quick catch up on the news? Here are seven agricultural stories you might have missed this week.

1. USDA released its much-anticipated Prospective Plantings report March 31. As expected, USDA said U.S. farmers are going to plant a record amount of soybeans this spring with USDA forecasting 89.48 million acres, up more 7% from last year’s crop. This increase in acreage comes at the expense of corn and wheat. – Farm Futures

2. FMC and DuPont announced March 31 that they had reached an agreement for FMC to acquire the part of DuPont's Crop Protection business that it must divest to comply with the European Commission ruling related to its merger with Dow Chemical Company. As part of the agreement, DuPont will acquire FMC Health and Nutrition and receive $1.2 billion in cash. Dow and DuPont had announced earlier in the week a conditional regulatory clearance from the European Commission. – Farm Futures

3. Environmental Protection Agency Administrator Scott Pruitt signed an order on March 29 denying a petition that sought to ban chlorpyrifos, a pesticide used on U.S. farms. This reverses a decision made by the previous administration. The decision was heralded by members of the Pesticide Policy Coalition, which said the pesticide is vital to agricultural production. – Farm Futures

4. This year's bird flu outbreak is the nation's worst since 2015. The disease was first confirmed in southern Tennessee in early March and has since been detected in Alabama, Kentucky and Georgia. – Times Free Press

5. The Senate Committee on Agriculture, Nutrition and Forestry voted March 30 to favorably report nominee Sonny Perdue to serve as the 31st Secretary of Agriculture. His nomination was opposed by Sen. Kirsten Gillibrand and his cousin, Sen. David Perdue, abstained from the vote. – Politico

6. The availability of credit is vital for farm operations and was discussed at a recent House Agriculture Committee hearing held to review the Farm Credit System. – Delta Farm Press

7. The United States hog inventory is up 4%, according to the quarterly Hogs and Pigs Report released March 30, 2017, by USDA's National Agricultural Statistics Service. Breeding inventory, at 6.07 million head, was up 1% from last year, but down slightly from the previous quarter. – Wallaces Farmer

And your bonus: The importance of pollinators has long been in the news and a University of Idaho researcher recently published a review paper that says when agriculture helps pollinators, pollinators help agriculture. – phys.org

Perdue caught in political delays

Perdue caught in political delays

Leave it to Washington, D.C., to let politics get in the way of getting work done. And when it comes to some high profile nominees that impact agriculture, it is noticeable.

The Senate Agriculture Committee voted Thursday morning to favorably report nominee Sonny Perdue to serve as the U.S. secretary of agriculture. Perdue, former governor of Georgia, may now be considered by the full U.S. Senate for confirmation; however, it may be May before that happens.

Perdue has the bipartisan support of six past agriculture secretaries and also has the support of more than 650 agricultural groups from across the nation. So, what’s the holdup?

Partisan politics.

At the top of the Senate’s floor schedule is advancing the nomination of Neil Gorsurch to fill the open seat on the U.S. Supreme Court. To avoid a filibuster, the Senate needs 60 votes. With only 52 Republicans, Democrats are dragging their feet on Judge Gorsuch, who didn't have a single dissenting vote when he was confirmed by the Senate for the 10th Circuit Court of Appeals.

Farm Bureau Federation President Zippy Duvall wrote a letter to the full Senate Thursday calling for swift confirmation. “There is no rational basis to oppose his confirmation,” Duvall wrote. “Tactics to block a vote on this nomination appear to be cynical tit-for-tat politics. The public deserves better.”

He noted that Supreme Court decisions affect farmers’ and ranchers’ ability to be productive. “Important cases are expected to be coming up, and we need a full Supreme Court to provide for the full functioning of our third branch of government. Most important, we need a justice as qualified and dedicated as Judge Gorsuch,” Duvall said.

Senate majority leader Mitch McConnell, R-Ky., has promised that Gorsuch will get Senate approval. If Democrats don’t cross party lines, McConnell could impose the “nuclear option,” which would allow only a simple majority.

For Democrats, this is about Republicans failing to ever hold a confirmation hearing for Merrick Garland, President Barack Obama’s Supreme Court nominee. For Republicans, this is about Democrats taking the extraordinary step in 2013 to lower the bar to break filibusters to from 60 votes to 51 for all Executive Branch nominees except Supreme Court nominees.

Several Senate Democrats from farm states who voted for Trump in 2016 will be up for re-election in 2018 and could end up breaking with the party. This includes Sens. Joe Donnelly, D-Ind., Jon Tester, D- Mont., Claire McCaskill, D-Mo., Heidi Heitkamp, D-N.D., and Joe Manchin, D-W.V.

If the Senate gets bogged down with the Gorsuch vote during the week of April 3, it could be May before Perdue sees time on the Senate floor. The Senate goes on recess April 7 for two weeks and returns just five days before the stopgap spending bill expires on April 28.

Reports Thursday indicated that Senate Agriculture Committee chairman Pat Roberts, R-Kan., said he holds hope that a vote can still be scheduled next week, however it would have been more probable had the Perdue committee vote taken place Wednesday as originally planned. Committee ranking member Debbie Stabenow, D-Mich., said she will urge Democrat leaders to allow the vote to come up on the floor.

This once again reinforces the need to get Perdue confirmed as Congress deals with deep budget cuts proposed by the Trump Administration without anyone advocating on behalf of agriculture.

“I’m pleased our committee has made swift strides to move Gov. Perdue’s nomination closer to the finish line,” Roberts said following the favorable vote Thursday morning. “Our farmers and ranchers have been waiting too long for this important position to be filled. We need to get Gov. Perdue down to USDA to get to work. Rural America is ready.”

Stabenow also voted in support of Perdue’s nomination, saying, “Although we have some differences on policy, we share a commitment to support American agriculture and strengthen our small towns and rural communities.”

During his nomination hearing, Perdue, who served as both a Democrat and Republican during his days in the Georgia legislature, highlighted his ability to work across party lines.

“It’s important to note that the makeup of (the Senate Agriculture) Committee speaks directly to the size, reach and diversity of America’s agricultural sector and that reaching across the aisle is common practice within this committee, where partisanship doesn’t get in the way of good solutions for American farmers, ranchers and consumers,” Perdue said during the committee hearing. “To that end, if confirmed as the secretary of agriculture, I look forward to working with you … each of you … to find solutions to the challenges confronting American agriculture.”

Since his inauguration, 21 of the President's nominees have been confirmed, but there are 41 positions total awaiting confirmation and 491 still waiting on a nomination. That's out of 553 key positions requiring a Senate confirmation, according to the Partnership for Public Service and The Washington Post.

Nominee for U.S. Trade Representative ambassador Robert Lighthizer is another notable nomination that hasn't crossed the finish line. While his nomination hearing was largely without fireworks, a number of senators are insisting Lighthizer must receive a waiver from Congress in order to serve as USTR due to his past work representing foreign governments.

In a floor speech Thursday, Senate Finance Committee Chairman Orrin Hatch, R-Utah, said the office of USTR  needs to be fully functional and fully staffed. Unfortunately, up to now, some on the other side have been making unreasonable and wholly unrelated demands in relation to the confirmation of President Trump’s nominee to be USTR. I’m hoping we can make progress on this very soon,” he said.

It’s time to put partisan politics aside and move the nominations along. Otherwise, agriculture will continue to be underrepresented.

 

Top 5 Ag stories: Rural infrastructure, chlorpyrifos and farm credit

In this week's top five ag stories, we take a look at an EPA decision to keep Chlorpyrifos on the market for crop protection. In addition, groups gather to work to rebuild rural infrastructure and a look at possible problems in the farm credit system. Plus, some tips on determning which Bt traits are right for you and your acreage. 

corn field under bright blue sky Kenneth Schulze/iStock/Thinkstock

USDA confirms it: Big increase in soybean acres

The U.S. Department of Agriculture on Friday delivered a double dose of bearish news for soybeans with its forecast that farmers will plant more soybeans this year at a time when there are 200 million bu. more soybeans in storage than a year ago.

The grain trade expected more soybean acres, but USDA’s forecast of 89.5 million was even larger than trade estimates. That increase of 7%, or 6 million acres more than a year ago, will draw acres from corn and wheat, both of which will have smaller areas this year.

Also bearish for soybean prices was the quarterly stocks report, which showed 1.735 billion bu. of soybeans in storage, which topped the average forecast and was up from the 1.53 billion bu. a year ago. Corn and wheat stocks of 8.62 billion bu. and 1.66 billion bu., respectively, were above trade averages and greater than a year ago.

“USDA’s March 31 reports have a well-deserved reputation for surprises, and they proved why again today,” Bryce Knorr, Farm Futures senior grain analyst, said. “Soybeans got a double dose of bearish news. Farmers, as expected, said they want to plant record acres, and their intentions were even more than we found in our survey."

Knorr said growers across the country are moving to soybeans and cutting back on other crops, including spring wheat, sorghum corn. This was especially true in North Dakota, where soybean acreage is expected to be up 14% from 2016, while spring wheat seedings should be down 10%.

USDA said soybean acreage intentions are up or unchanged in the 27 of the 31 states it surveys.

Chicago Board of Trade soybeans for May "traded to six-month lows before the report," Knorr said. "The market is oversold, but the next downside support is $9.3725. A test of that level could trigger short covering, but growers shouldn’t expect any real rallies until we’re well into the growing season."

Near midday on Friday and after the report, May soybeans were down 17 cents at $9.46/bu., and new-crop November was down 8.5 cents to $9.5475/bu. May corn was up 6 cents to $3.635/bu., and December was up 6.25 cents to $3.8725.

Total wheat acreage is expected to be down this year because a drop in the winter wheat area has been known for months. Friday’s report was the season’s first for spring and durum wheat, and it showed spring wheat down 3%, at 11.31 million acres, and durum down 17%, at 2 million. North Dakota, the biggest durum and spring wheat producer, is expected to see a 10% drop in spring wheat acreage and a 21% drop in durum acreage.

“The acreage numbers are slightly supportive for corn. Corn was trending higher just ahead of the report, so there may be fund money deciding to get long today for a weather rally on end-of-the-quarter positioning,” Knorr said. “The stocks number would appear to indicate lower feed usage due to the fairly mild winter and abundant supplies of competing rations.”

USDA’s estimate is “only 68 million bu. above" the Farm Futures projection -- less than 1% -- which is within the range of sampling error, Knorr noted.

“May (corn) futures rallied up to the moving average resistance I suggested in this morning’s report on FarmFutures.com,” he added.

Planting with tractor in bare soil. 1540x800 oticki/ThinkstockPhotos

USDA: soybean, cotton acreage up, corn takes hit

Going in to the March 31 USDA planting intentions report, the operating theory among many ag-sector watchers was producers, facing a tepid corn price and already holding some two billion bushels of the commodity in bins, would opt for planting more soybeans. What does the report say?

Indeed, if the survey holds true, corn acreage will fall 4 percent (to 90 million acres) and soybeans will pick up 7 percent (a record-high 89.5 million acres). Wheat acreage is down 8 percent to 46 million.

The Mid-South breakdown shows:

  • Arkansas corn acreage dropping from 760,000 in 2016 to 600,000 in 2017.
  • Louisiana dropping from 620,000 acres to 500,000.
  • Mississippi dropping from 750,000 acres to 530,000.
  • Missouri dropping from 3.65 million acres to 3.25 million.
  • Tennessee dropping from 880,000 acres to 840,000.

The grain stock report, also released March 31, shows corn stocks up 10 percent (8.62 billion bushels) from a year ago, with soybean stocks up 13 percent (1.73 billion bushels). Wheat stocks are up 21 percent (1.66 billion bushels).

Rough rice stocks, says the USDA’s National Agricultural Statistics Service (NASS), are down 1 percent at 108 million hundredweight. According to the report, “Long grain varieties accounted for 67 percent of the total rough rice, medium grain accounted for 31 percent, and short grain varieties accounted for 2 percent.”

As for planting intentions, while Arkansas long-grain acres are expected to drop some 25 percent, medium grain acres are expected to rise from 135,000 acres to 145,000. Louisiana will see a dip in long-grain acres from 413,000 to 375,000 with Mississippi also dropping from 230,000 acres to 200,000. Missouri long-grain will also see a slight drop from 230,000 acres to 200,000.

The Mid-South breakdown for soybean acres:

  • Arkansas will boost acres from 3.13 million acres to 3.5 million.
  • Louisiana will go from 1.23 million to 1.9 million acres.
  • Mississippi will go from 2.04 million acres to 2.25 million.
  • Missouri will go up slightly from 5.6 million acres to 5.65 million.
  • Tennessee will see a rise from 1.66 million to 1.75 million acres.

Also, of keen interest to the South: the planting intentions reports says cotton acres will be up 21 percent at 12.2 million acres.  

In Arkansas, the uptick in cotton acres is pronounced -- from 380,000 acres to 500,000. Louisiana will see cotton acres go from 140,000 to 190,000. Mississippi will move from 435,000 acres to 550,000. Missouri producers will plant a bit more cotton, moving from 280,000 acres to 285,000. Tennessee will go from planting 255,000 acres to 300,000.

Blue background with red/pink line. lukas_zb/Thinkstock
Rising volatility may have farmers looking at new crop soybean sales for 2017 already

USDA delivers bearish surprise for soybeans with big acres and big stocks

USDA on Friday said it expects farmers to plant a record 89.5 million acres of soybeans this year. That number was even bigger than most trade forecast, which prompted selling in the Chicago futures.

Also bearish for soybeans, was USDA March 1 stocks of 1.735 billion, which topped the average. While soybeans futures traded lower after the report, corn and wheat futures turned higher following the decreases in expected acreage. The March 1 grain stocks were on the bearish side of estimates for all three crops.

Listen to the report using the audio link on this page.

 

Farm Futures Senior Editor Bob Burgdorfer comes to Penton Farm Progress with experience as a reporter covering grain markets and other global news with Reuters, Inc. A journalism graduate from Kansas State University, Bob has also worked at daily newspapers and Knight-Ridder as a commodity reporter, covering grains and livestock. He has earned five writing awards for his coverage of Mad Cow Disease, immigration issues and other international breaking news stories.

For more corn, wheat and soy news, commodity marketing recommendations and daily commodity charts, subscribe to Farm Futures' free e-newsletter, Farm Futures Daily, and keep up during the day with Farm Futures on Twitter.

Red tractor and blue planter planting corn. chas53/ThinkstockPhotos

USDA confirms it: Big increase in soybean acres

USDA on Friday delivered a double-dose of bearish news for soybeans when it forecast that farmers will plant more soybeans this year at a time when there are 200 million more bushels of soybeans in storage than a year ago.

The grain trade expected more soybean acres, but USDA’s forecast of 89.5 million was even larger than trade estimates. That increase of 7%, or 6 million more than a year ago, will draw acres from corn and wheat, both of which will have smaller areas this year.

Also bearish for soybean prices was the quarterly stocks report, which showed 1.735 billion bushels of soybeans in storage, which topped the average forecast and was up from the 1.53 billion a year ago. Corn and wheat stocks of 8.62 billion and 1.66 billion, respectively, were above trade averages and greater than a year ago.

“USDA’s March 31 reports have a well-deserved reputation for surprises, and they proved why again today,” said Bryce Knorr, Farm Futures senior grain analyst. “Soybeans got a double dose of bearish news. Farmers as expected said they want to plant record acres, and their intentions were even more than we found in our survey."

Knorr said growers across the country are moving to soybeans and cutting back on other crops, including spring wheat, sorghum and corn. This was especially true in North Dakota, where soybean acreage is up 14% from 2016, while spring wheat seedings should be down 10%.

USDA said soybean acreage intentions are up or unchanged in 27 of the 31 states it surveys.

“CBOT May soybeans traded to six-month lows before the report. The market is oversold, but next downside support is $9.3725. A test of that level could trigger short covering, but growers shouldn’t expect any real rallies until we’re well into the growing season,” said Knorr.

Near midday on Friday and after the report, May soybeans were down 17 cents at $9.46 and new-crop November was down 8-1/2 at $9.54-3/4. May corn was up 6 at $3.63-1/2 and December up 6-1/4 at $3.87-1/4.

Total wheat acreage was expected to be down this year as a drop in winter wheat’s area had been known for months. Friday’s report was the season’s first for spring and durum wheat and it showed spring wheat down 3% at 11.31 million acres and durum down 17% at 2 million. North Dakota, the biggest durum and spring wheat producer, is expected to see a 10% drop in spring wheat acreage and a 21% drop in durum.

“The acreage numbers are slightly supportive for corn. Corn was trending higher just ahead of the report, so there may be fund money deciding to get long today for a weather rally on end-of-the-quarter positioning,” said Knorr. “The stocks number would appear to indicate lower feed usage due to the fairly mild winter and abundant supplies of competing rations.”

USDA’s estimate is “only 68 million bushels above our projection”, less than 1%, which is within the range of sampling error, said Knorr.

“May (corn) futures rallied up to the moving average resistance I suggested in this morning’s report on FarmFutures.com,” he said.

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