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Are 'Beans In The Teens' Prices
Ahead?
Soybean futures reached a 34-year high this week,
according to Doug Harper, v.p. editorial products, Brock Associates, a
farm market advisory firm. "The high for January soybean futures was
$11.095, occurring Monday morning," says Harper. "The market has been
pulling back since then. History tells us that once soybeans get above
$11, they don't stay there for very long. So, our clients have been
fairly aggressive with soybean sales this week."
There are two main reasons for the current high prices, notes Harper.
"Number one, China has been aggressively buying U.S. soybeans and
soybean oil," he says. "Number two, the U.S. market needs to pull a
minimum of 5 million acres back into soybean production for 2008, and
the best way to increase production is with high prices."
The soybean market may take some time to reach another high after this
week's jump, adds Harper. "The market is keeping an eye on the weather
in South America, which has the potential to increase prices, but right
now conditions are mostly favorable," he says.
Soybean acreage in Brazil is up about 6% on top of record acreage last
year, and soybean acreage in Argentina is up about 2-3%, Harper points
out. With South American acreage increasing, the real concern is whether
or not U.S. farmers will plant enough beans, he adds.
"Given the tight supplies this year, the market must have increased U.S.
soybean production next year," says Harper. "The question all winter
will be whether the market has bought enough soybean acres in the U.S.
The other wild card further down the road is the weather, both in South
America and in the U.S., this growing season."
Soybean prices may still increase, however, says Chris Hurt, a
Purdue University Extension economist. "If soybeans are at $11/bu. now,
why can't they go to $15?" he asks. "The all-time futures high for
soybeans occurred on June 5, 1973, when they hit $12.90/bu. Adjusting
average prices received by farmers for inflation and yield differences
back through time would put soybean prices from the 1973-1975 period in
the $12-17 range today. So, it's not unreasonable to talk about $12
beans, given the historical perspective."
One reason prices may stay below those levels, however, is that 54% of
the world's soybean production now occurs in South America, but in the
1972-1973 marketing year, South American soybean production represented
less than 1% of world soybean production, says Hurt. Today, the world
doesn't have to wait more than six months for more soybeans to become
available, compared to a year's wait in the 1970s, he adds.
"However, I see no reason that prices couldn't hit $15/bu. this year,"
says Hurt, "if weather becomes a factor."
Soybean prices in the teens are possible, but not guaranteed this
marketing year, says Randy Fortenbery, University of Wisconsin ag
economist.
"Every time we've hit the $10 futures price level in the past, we've
heard the chant for beans in the teens, and then it never happens," he
points out. "However, soybean prices have been climbing higher now for
almost a year. So, the teens are within reach."
The key to the current soybean demand is the cheap U.S. dollar, high oil
prices and the competition for acreage for U.S. row crops next spring,
says Fortenbery. Add potential weather worries into the mix, and
soybeans could hit another record price, he adds.
For more market information from Brock Associates, click here: www.brockreport.com. To read more
information from Chris Hurt on why beans in the teens are possible this
marketing year, click here: www.agecon.purdue.edu/extension.
To view Wisconsin soybean basis prices by county from the University of
Wisconsin, click here: www.aae.wisc.edu/renk.
By John Pocock
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Nematodes Worming Free Of Common Soybean
Resistance
After almost three decades of shielding soybean plants
from a deadly natural foe, the leading source of resistance against
soybean cyst nematode (SCN) is showing chinks in its armor, says Jamal
Faghihi, Purdue University Extension nematologist.
The PI 88788 gene is found in about 97% of soybean varieties with SCN
resistance. SCN is a yield-robbing worm-like nematode that feeds on
nutrients within a soybean plant's roots. The pest is linked to
increased incidence of soybean sudden death syndrome.
SCN-related yield losses can reach 50% in heavily infested fields.
"Since the PI 88788 source of resistance has been around about 30 years,
you would expect there to be some changes in that resistance over time,"
says Faghihi. "We have seen that change occurring. The soybean varieties
with PI 88788 resistance are not working as well as they used to."
To read more of this article on SCN detection and prevention, click
here: cornandsoybeandigest.com/soybeans.
Source: Purdue University Extension
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Conrad Asks Farm Groups To Pressure
Recalcitrant Senators
Senate Agriculture Committee leaders are urging
farmers to contact their organizations and ask them to pressure senators
to stop delaying consideration of the committee-passed version of the
2007 Farm Bill.
The Senate officially began debate on the committee farm bill on Nov. 5
but so far has held only one vote on the measure. That vote on a motion
to invoke cloture on Nov. 16 fell five votes short of the 60 needed to
limit debate and the number of amendments that could be offered for the
bill.
Ag committee leaders said they planned to schedule another vote on
cloture shortly after the Senate returns to Washington on Dec. 3. If
they fail, the current farm bill may have to be extended a year or two,
according to Sen. Kent Conrad, senior Democrat on the committee.
To read more of this article about the chances of seeing a new farm bill
in 2007, click here: deltafarmpress.com/news.
By Forrest Laws
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Fighting
Phytophthora
Phytophthora is morphing. Like many pathogens, it has
evolved about 70 new races able to survive on and infect resistant
soybean varieties. And some of the new races can overcome all currently
available soybean variety resistance genes on the market, says Jim
Kurle, University of Minnesota plant pathologist.
"The last time we had a major Phytophthora resistance gene fail (back in
the late 1970s) there were 300,000 acres of soybeans lost in Ohio," says
Anne Dorrance, Ohio State University plant pathologist. "We're not
seeing anything that dramatic yet, but we have found isolates that could
kill plants with the Rps 1k gene, the most widely used resistance gene,
in the early 1990s."
To read more of this article about fighting phytophthora in soybeans,
click here: cornandsoybeandigest.com/ag-issues.
By Susan Winsor
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On The Docket For 2008: A Farm
Bill?
The U.S. Senate went on a two-week Thanksgiving recess
on Nov. 16, without passing a new farm bill. Congress will reconvene on
Monday, Dec. 3. The Senate version of the new bill that was approved by
the Senate Agriculture Committee was introduced to the full Senate for
approval during the week of Nov. 5-9. As many as 260 different
amendments to the legislation passed by the Senate Ag Committee have
been introduced by the 100 U.S. Senators.
To read more of this article about the uncertainties over a new farm
bill and what not having one might mean for farmers, click here: cornandsoybeandigest.com/ag-issues/2008.
By Kent Thiesse, VP, MinnStar Bank
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New
Drought-Tolerant Plants Offer Hope For Warming
World
Genetically engineered crop plants that survive
droughts and can grow with 70% less irrigation water have been developed
by an international team led by researchers at the University of
California, Davis. The discovery offers hope for global agriculture that
is already grappling with limited and variable water supplies.
Research findings concerning the new drought-tolerant plants are in the
Nov. 26 online issue of the Proceedings of the National Academy of
Sciences. In this study, tobacco plants were used as a research model.
The University of California has filed a patent application on this
technology. The patent application is pending in the U.S. and in a
number of foreign countries. The patent rights are covered by an
exclusive arrangement between the University of California and Arcadia
Biosciences, which has completed initial outdoor field trials with the
drought-tolerance gene in tobacco.
To read more of this article about drought-tolerant plants, click here:
www.news.ucdavis.edu.
To read the research findings as reported in the Proceedings of the
National Academy of Sciences, click here: www.pnas.org/cgi.
Source: University of California, Davis, News
Service
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Illinois and Indiana Crop Management And
Market Outlook Workshop Set For Dec. 4
The Bi-State Crop Management and Market Outlook
workshop, sponsored by the Purdue University and University of Illinois
Cooperative Extension Services, will be from 9 a.m. to 2:45 p.m. Dec. 4
at the Beef House Banquet Hall in Covington, IN.
The workshop schedule is as follows:
- 9 a.m. Registration
- 9:30 a.m. Nitrogen management and other issues by Purdue Extension
agronomist Bob Nielsen
- 10:35 a.m. Issues in managing insects in corn and soybeans by
Illinois Extension entomologist Kevin Steffey
- 11:30 a.m. Sprayer technology for accurate fungicide applications by
Scott Bretthauer, Illinois application technology specialist
- 12:35 p.m. Lunch
- 1:30 p.m. A marketing panel with Paul Cooley, Archer Daniels Midland
Investor Services; Corinne Alexander, Purdue agricultural economist and
Wayne Nelson, L&M Commodities
- 2:45 p.m. Adjourn
A pdf registration form is downloadable at: www.ces.purdue.edu/anr.
Workshop registration is due by Nov. 30. For questions and more
information, contact Kelly Pearson at the Purdue Extension Warren County
office at 765-762-3231 or kppearson@purdue.edu.
Source: Purdue University Extension
Service
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Ohio Agronomy
Day Slated For Dec. 11
Ohio State University (OSU) Extension's Crawford/Huron
Agronomy Day is slated for Dec. 11 from 9 a.m. until 4 p.m. at the Moose
Lodge, 220 E. Walton Street, Willard, OH. Registration is $25 before
Dec. 7 and $30 at the door.
Program offerings will include a corn and soybean fertility short course
presented by OSU Extension soil fertility specialist Robert Mullen; use
of foliar fungicides in corn and soybeans by Ohio Agricultural Research
and Development Center plant pathologist Dennis Mills; potential of the
variant western corn rootworm to damage 2008 corn by OSU Extension
entomologist Bruce Eisley and new herbicides for 2008 by OSU Extension
educator Steve Prochaska. Other topics include a look at the potential
for soybean aphid in 2008 and reducing glyphosate-resistant weeds on the
farm.
For more information or to register, contact the OSU Extension Crawford
County office at 419-562-8731 or log on to crawford.osu.edu and click on
"Agronomy Day."
Source: Ohio State University
Extension
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Insane Soybean
Yields
When farmers tell Mike Janssen they're frustrated
about bean yields, his answer makes them smile. He tells them they're
insane. "That's when you keep doing the same thing over and over but
expect different results," says Janssen, from Hooper, NE.
And he's a little frustrated himself. He believes farmers leave a lot of
yield in the field because of old habits that ignore new technology.
To read more of this article on how to change habits to improve soybean
yields, click here: cornandsoybeandigest.com/soybeans.
By John Russnogle
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Nebraska Soybean Day Convenes Dec.
14
The 2007 Nebraska Soybean Day and Machinery Expo on
Dec. 14 will assist soybean producers in planning for next year's
growing season. The expo, which begins at 8:30 a.m. and concludes at
2:30 p.m., will be in the pavilion at the Saunders County Fairgrounds in
Wahoo, says Keith Glewen, University of Nebraska-Lincoln Extension
educator. Speakers start at 9 a.m.
Glewen will discuss on-farm soybean production research results from
area growers. The Nebraska Soybean Board and Soybean Association will
give a checkoff update and association information, while Mike
Steenhoek, National Soybean Transportation Coalition director, will
present, "A Bump In The Road: How Transportation Is A Growing Obstacle
To Soybean Profitability."
Palle Pedersen, soybean Extension agronomist at Iowa State University,
will present "Ten Most Common Yield Limiting Factors In Soybean
Production." John Gnadke, harvest management consultant of AGS Inc. of
Ankeny, Iowa, will present "Most Common Mistakes Made In Storing Grain."
He also will discuss new bin considerations. Roy Smith, well-known
educator, broadcaster, writer and founder of Soyroy Inc., will present
his perspective on "Making Sense Out Of The Grain Markets."
Other presenters include UNL researchers and specialists, Nebraska
Soybean Board representatives, soybean growers and private industry
representatives. Producers will be able to visit with representatives
from seed, herbicide, fertilizer and equipment companies and view new
farm equipment during a 30-minute break at 10 a.m.
Registration is available the day of the expo at the door. For more
information about the program or exhibitor information, call
800-529-8030 or e-mail kglewen1@unl.edu. There is no
registration fee.
Source: University of Nebraska-Lincoln
Extension
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Timely Tax
Tips
For the 2007 tax year, you may want to examine several
key items, such as Section 179 deductions and income averaging
deductions, according to Gary Hoff, Extension specialist in taxation,
University of Illinois Tax School.
While there haven't been wholesale changes in this year's tax code, Hoff
offers the following as important points to discuss with your tax
advisor:
For 2007, the Section 179 deduction has been increased to a cap of
$125,000, compared to last year's level of $108,000 and $105,000 in
2005.
The deduction applies to tangible property like machinery and equipment,
certain single-purpose agricultural structures (see IRS Farmer's Tax
Guide, Publication 225), bulk storage facilities (e.g., grain bins),
gasoline storage tanks, office equipment and even off-the-shelf computer
software purchased for the business.
To read more of this article about tax tips for farmers, click here: cornandsoybeandigest.com/marketing.
By Karl Ohm
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U.S. Food Prices Most Affordable In The
World
While the average price of a Thanksgiving dinner for
10 has increased about $4 this year, the real dollar price adjusted for
inflation has actually declined about 9% in the past 20 years. According
to USDA, Americans spend just 10% of their disposable income on food
expenses, while households in countries like India often spend 50% of
their budget on food. Even countries in Europe spend more than twice
what U.S. consumers spend on food costs.
"Collectively, America's farmers have ... worked hard to ensure our food
supply is not only safe and secure, but plentiful enough to meet all
demands and retain the affordable food prices consumers have come to
expect," says Ken McCauley, farmer and chairman of the National Corn
Growers Association (NCGA).
To see a chart on how the U.S. stacks up against other countries in the
average percent of a household's budget spent on food, click here: www.ncga.com/news.
Source: National Corn Growers
Association
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Thoughts On
Thanksgiving: A Note From The Soybean E-Digest
Editor
The Thanksgiving holiday inspired several Soybean
E-Digest readers to write to me with their reasons to be thankful
this year. Considering soybean prices went above the 34-year high this
week, I was surprised at first that no one who wrote put prices at the
top of their list of thanks.
Those who took the time to share their items of thanks put faith,
freedom, family, health and friends -- and time to enjoy them -- much
higher than plentiful rainfall, good yields or profitable prices for
soybeans. While we all had to pay slightly higher food prices this year
at Thanksgiving, both farmers and every other U.S. consumer still can
give thanks that we spend on average only 10% of our family budget on
food, whereas much of the world spends more than half of their family
budget just to eat.
Recently, a friend of mine who runs a Chinese restaurant close to where
I live near Minneapolis, MN, told me that he marvels at the abundance
and affordability of food in this country every time he goes to the
grocery store. His perspective is different from most U.S. consumers,
because his boyhood years were spent in refuge camps in Cambodia with
the constant fear of starvation. Now a U.S. citizen, he gives thanks,
not only for the abundance of food in this country, but for the
political and religious freedoms and the safety that it offers.
Like my friend and many Soybean E-Digest readers, and those who
took the time to write to me, I share in those thanks. If you have the
time and want to drop me a note about this or any other topic related to
soybean production, I'd be happy to hear from you. As always, if you
have any other ideas on what you'd like to see covered in a future issue
of the Soybean E-Digest, or if you have concerns or questions
about this issue, please write me (John Pocock) at: jpocock@csdigest.com.
Thanks for your readership.
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