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Soybeans Trade In Teens, Set New
Highs
July 2008 soybean futures reached a record $13.06/bu.
high trade on the Chicago Board of Trade (CBOT) electronic platform on
Tuesday, Jan. 8, before settling at $12.95/bu. The previous soybean
futures high price occurred last week on Jan. 4, when July futures
traded electronically at $13.01 1/2, before settling at $12.88.
"We're definitely seeing stronger grain prices being carried forward in
preparation for the upcoming U.S. planting season as bidding for
row-crop acres intensifies," says Chad Hart, Iowa State University
agricultural economist. "Looking forward to this spring, it's definitely
going to be a horse race between corn and soybeans for more production
acres."
In comparison, July 2008 corn futures traded to a high of $5.01/bu.
electronically on Tuesday's CBOT, before settling at $4.99 1/2.
Tuesday's closing price for July 2008 corn futures is only 55 cents shy
of the all-time high July 1996 corn futures price of $5.54 1/2.
However, the current price ratio between corn and soybeans favors
neither crop in efforts to attract more acres, notes Hart. "Normally, we
look for a 2 1/4 price ratio, which is where it's stood historically,"
says Hart. "So, from a price ratio standpoint, it's about 2 1/2, which
makes this a very competitive horse race."
Corn will likely hold onto some acreage that it gained last year
in the U.S., but soybeans will also gain back some acres in 2008 that it
had in 2006, predicts Hart. "I doubt we'll see either the corn acreage
that we had in 2007 or the soybean acres we had in 2006," he says. "It
will likely be somewhere in between."
USDA will release its annual crop-production report on Friday, which may
cause some adjustments in market prices, says Hart. Yet, "a bigger
market mover than Friday's USDA report is what's going on in South
America right now," he adds. "With global grain supplies so tight and
the competition for row-crop acreage so strong, we're much more
susceptible to weather rallies right now than we were last year."
The weather's impact on South American corn and soybean production could
provide "extraordinary upside potential" to grain markets this year,
agrees Brad Anderson, senior vice president, Informa Economics, Inc.
"While Brazil's production prospects look pretty good right now,
Argentina is on the dry side," he reports. "There's really not much room
for error if production problems do develop in South America."
Corn and soybean prices could both continue to climb higher in the weeks
ahead, "depending on weather events in South America," says Hart.
However, prices could also drop if South American grain production
appears likely to meet or exceed expectations. After the South American
harvest wraps up, the next big factor in determining grain market prices
for 2008 will be what the USDA's planted acreage report turns out to be
for the U.S. this spring, he adds.
Farmers who still have unsold grain will have to determine whether they
want to take what the market is offering now or wait and take a chance
on seeing more record-high grain prices later this season. "Some days
it's just hard to beat a record price," sums up Hart.
For more information on current CBOT soybean futures prices, click here:
www.cbot.com/.
For more information on Informa Economics, Inc., click here: www.informaecon.com/.
By John Pocock
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Argentina's
Crop Outlook Is Worse Than Brazil's
Cool, tropical Pacific Ocean water has generated a La
Niña weather pattern that threatens corn and soybean production in
Argentina and Brazil, says Drew Lerner, a meteorologist and owner of
World Weather, Inc.
"We don't really know what normal is when it comes to La Niña, but
with La Niña there is tendency for the northeastern and far
southern sections of Brazil to be dry during the January through
February period, when soybeans are going through their key reproductive
growth stages," says Lerner, who is based near Kansas City, MO.
"However, so far this year, most of Brazil is still favorably moist,
with the exception of the northeastern section, which hasn't been dry
long enough to significantly cut production yet. It is drying out in the
south as well, but it would take at least a week to 10 days to create
conditions that might reduce yields enough to impact soybean
markets."
Also, soybean growers in the state of Mato Grosso have been growing
significantly more soybeans than they did 10 or 15 years ago, says
Lerner. He points out that this area of Brazil isn't typically dry
during a La Niña event, and it isn't dry this summer either. "Only
a small portion of Brazil's total soybean production areas are currently
vulnerable to yield reductions from reduced precipitation this year
compared to yield reductions that have occurred in other La Niña
years," says Lerner.
Argentina has had more stressful problems with dry weather than Brazil
has this summer, he adds. "Timely rains have saved the corn crops at
least twice already," says Lerner. "The early corn crop has probably
lost some yield potential. The late corn crop and the soybean crop could
lose some yield if we don't see some improvement in rainfall soon. The
outlook for late January through early February calls for another period
of drier- and warmer-than-usual weather in most of Argentina's
crop-growing areas, so the potential for more yield loss there is pretty
high."
For more information about current global weather conditions, click
here: www.worldweather.cc/.
By John Pocock
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Does It Feel
Like The 1970s?
The last half of 2007 and the beginning of 2008 have
drawn many to make comparisons with the agricultural economy that
existed in the 1970s, with record grain prices, high farm profits and
rapid increases in land values...
To read more of this article's comparisons between the 1970s and the
current agricultural economy, click here: cornandsoybeandigest.com/kentthiesse/feel-like-1970s/.
By Kent Thiesse
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business investment.
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©2007 Monsanto Company.
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'Pricing
Matrix' Approach Can Aid Producers
An integrated model of pricing corn and soybeans that
considers a broader range of strategies than traditional approaches may
help producers make pricing decisions in a volatile environment,
according to a University of Illinois (U of I) Extension study.
"So How Do I Make Corn and Soybean Pricing Decisions?" was prepared by U
of I Extension specialists Darrel Good and Scott Irwin and is available
at the following farmdoc Web site: www.farmdoc.uiuc.edu/marketing.
Their marketing and outlook recommendations address what Good and Irwin
term the "pricing matrix" approach.
"The traditional approach to making corn and soybean pricing decisions
has been to use a combination of analytical techniques -- generally
characterized as fundamental and technical analysis -- to forecast
future price behavior and then time pricing decisions based on those
forecasts," says Good. "That approach has essentially been one of
attempting to 'beat the market.'"
Good and Irwin identify four steps necessary to implement the pricing
matrix approach.
"The first step is to select the appropriate time window for pricing
corn and soybean crops," says Good. "The second is to determine the
relevant set of crop-pricing strategies. Third, decide on the
proportions of the crop to be marketed via each of the pricing
strategies. Finally, evaluate performance after the marketing window is
completed."
The complete report includes examples for producers to follow to gain
insights into adopting the pricing matrix approach for their
enterprises.
"We want to emphasize our belief that many producers are substantially
under-diversified in terms of pricing approaches, with over-reliance on
self-directed active strategies," says Good. "Diversification across the
four cells of the pricing matrix would likely improve marketing
performance for these producers. In addition, diversification would more
than likely reduce the risk and frustration of making corn and soybean
pricing decisions for most producers."
Source: University of Illinois
Extension
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2007 Ends With Strong Basis
Gains
2007 has definitely been one for the record books when
it comes to sky-high futures prices. But perhaps what has been just as
surprising is the ability of the cash market through basis to be
bullish, as well.
Basis levels in corn have gained 23 cents/bu. on average across the U.S
since mid-October, while soybean basis was up about 33 cents over this
same time period. These gains are about twice the norm for this time of
year. So what is causing these unprecedented gains?
To continue reading this article on the basis price, click here: www.ilfb.org.
Source: Illinois Farm Bureau
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This latest segment in the "Business Skills Series" shows some very
helpful guidelines on how you, as a farmer, can improve your personal
negotiating skills. Moe Russell's "Business Skills Series," an
informative digital video webcast, is brought to you by Asgrow soybeans.
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New Lab Test Can Detect SDS In Soybean
Seedlings
A simple, cheap lab test developed at Southern
Illinois University Carbondale (SIUC) can unerringly detect sudden death
syndrome (SDS), a costly fungal disease, in soybean seedlings. Once
commercialized, its use will help breeders produce SDS-resistant soybean
varieties much faster than they can now.
"You can do a reliable assay in the greenhouse in a plastic cup and four
weeks later, you'll see the result," says David A. Lightfoot, a
biotechnologist in SIUC's College of Agricultural Sciences who developed
the procedure. "The seedlings develop the leaf symptoms and the root rot
or they don't. It works every time, and the labor cost is very low --
about $1/assay."
Lightfoot received a patent for the assay Oct. 31, which will allow the
University to negotiate with private companies to license it.
To continure reading this article about the test to detect SDS, click
here: cornandsoybeandigest.com/news.
By K.C. Jaehnig, Southern Illinois University
Carbondale
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Register
Now For Commodity Classic And Save $
January 16 is the cutoff date for the best
registration fee of $180 for this year's Commodity Classic. After that
date, the registration fee jumps to $205 and on February 7 goes up to
$230. The non-member rate is $100 higher.
Growers can register online for the conference and for official housing
at www.commodityclassic.com. A
credit card is required for online registration. Full registration
includes access to the trade show, educational sessions, Friday's
banquet and Saturday evening's entertainment at the Grand Ole Opry.
Commodity Classic takes place in Nashville, TN, from February 28 to
March 1.
Source: Illinois Soybean Association
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Researchers Tackle Waterhemp With Practical
Solutions
Midwest farmers struggling with waterhemp issues have
a new resource for information thanks to the efforts of university weed
scientists Kevin Bradley with the University of Missouri, Bob Hartzler
with Iowa State University and Dawn Nordby with the University of
Illinois. The result of this collaboration is Biology and Management of
Waterhemp, a brochure created to help farmers minimize yield losses from
waterhemp and manage the development of herbicide resistance.
"Waterhemp is probably the number one concern in the Midwest because
everyone has it," Nordby says. "With this publication, we wanted to give
a history of how waterhemp went from obscurity just 20 years ago to the
leading offender in resistant weeds today."
Waterhemp density and its potential impacts on yield present the biggest
concern for farmers. To continue reading this article about waterhemp
management, click here: cornandsoybeandigest.com/ag-issues/news/researchers-tackle-waterhemp/.
To download a copy of the new brochure online, click here: glyphosateweedscrops.org/Pubs.html.
Source: University of Missouri, Iowa State
University, University of Illinois
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Northern
Plains Soybean IPM Forums Convene Feb. 7-8
For those interested in soybean production, please
mark your calendars for the Northern Great Plains Soybean Integrated
Pest Management (IPM) Forums in Moorhead, MN, on Thursday, February 7
and in Brookings, SD, on Friday, February 8.
This regional forum is an event for Extension staff, soybean producers,
consultants, agri-businesses, researchers and others interested in
soybean production. It will feature talks and training sessions by
nationally recognized leaders in soybean IPM. Topics include soybean
cyst nematode and soybean aphid resistance breeding, biology and IPM;
soybean rust and other diseases; other arthropod soybean pests; and an
agricultural economics talk on soybean futures.
The forums are sponsored by the Cooperative Extension Services at South
Dakota State University; North Dakota State University; the University
of Minnesota; the North Central Soybean Research Program; the North
Central IPM Center; the Soybean Research and Promotion Councils in South
Dakota, North Dakota and Minnesota; and the Sustainable Agriculture
Research and Education (SARE) program.
The Feb. 7 forum runs from 8:00 a.m. to 5:00 p.m. at the Courtyard by
Marriott & Conference Center in Moorhead, MN. The Feb. 8 forum runs from
8:00 a.m. to 5:00 p.m. at the Swiftel Center in Brookings, SD. More
information will be posted as it becomes available at: plantsci.sdstate.edu/conferences/ipmforum/.
By Ian MacRae, University of Minnesota Northwest
Research & Outreach Center
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Illinois Farm Computer Workshops
Offered
Computer workshops to help agricultural producers
manage risk and make better financial decisions will be offered in
February and March by University of Illinois (U of I) Extension. The
workshop series is part of the Farm Analysis Solution Tools (FAST)
program.
"These FAST training workshops are two-day sessions," explains Paul
Ellinger, U of I Extension farm financial management specialist. "Both
days involve computer training. The first day focuses on spreadsheet
development and financial management. The second day provides computer
training in risk management. Producers may attend one or both days."
FAST is a series of Microsoft Excel spreadsheets that aid producers in
making various farm business decisions. Each workshop begins at 9:30
a.m. and concludes at 4 p.m. The $45 registration fee per workshop
includes lunch and materials. The registration charge for both sessions
is $65.
Registration is due one week before the workshop you plan to attend.
Each workshop is limited to 30 participants. Ellilnger says additional
information can be obtained by contacting Garrett Stoerger at
217-333-1817, gstoerge@uiuc.edu.
Also sponsoring the workshops are U of I Extension's farmdoc program and
the USDA Risk Management Agency. Dates and locations for the workshops
are:
- Feb. 5-6, Oregon, Ogle County Extension office,
- Feb. 7-8, Bloomington, McLean County Extension office
- Feb. 14-15, Galesburg, Knox County Extension office
- March 4-5, Mount Vernon, Rend Lake Marketplace.
Source: University of Illinois
Extension
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Kansas/Colorado Agricultural Insurance
Programs Offered
A series of meetings designed to help Kansas and
Colorado crop and livestock producers learn about adjusted gross
revenue-Lite (AGR-Lite) and other risk management programs is planned
for several locations in the two states. The nine meetings are sponsored
by Kansas State University's (K-State) Department of Agricultural
Economics and K-State Research and Extension; Colorado State University;
the USDA's Risk Management Agency; and Farm Credit Associations of
Kansas.
Topics to be covered at each meeting include: an update from the USDA
Risk Management Agency; introduction to AGR-Lite; what is covered under
AGR-Lite; how coverage is established and how claims are calculated; and
issues with AGR-Lite.
To read more about the dates, locations and contact information for each
location, click here: www.oznet.ksu.edu/news.
Source: Kansas State University Research
Extension
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Minnesota Grain Association Convention
Planned
The 101st annual convention and trade show of the
Minnesota Grain and Feed Association is scheduled for February 3-5,
2008, at the St. Cloud Civic Center. The convention agenda includes a
market presentation by Richard Brock, a farm bill update by Sen. Amy
Klobuchar and Rep. Collin Peterson, a review of a new homeland security
chemical regulation, a presentation on co-op director responsibilities,
a balanced view of biofuels impact on the ag sector and a presentation
on business succession planning.
The trade show features 92 exhibitors offering products and services to
the country grain elevator and feed mill firms represented at the
convention. For convention details, go to www.mgfa.org or call 612-339-5043.
Source: Minnesota Grain and Feed
Association
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NOAA:
Sunspot Is Harbinger Of New Solar Cycle,
Disruptions
A new 11-year cycle of heightened solar activity,
bringing with it increased risks for disruptions to power grids,
critical military, civilian and airline communications, GPS signals and
even cell phones and ATM transactions, showed signs it was on its way
late yesterday when the cycle's first sunspot appeared in the sun's
northern hemisphere, say National Oceanic and Atmospheric Administration
(NOAA) scientists.
"This sunspot is like the first robin of spring," says solar physicist
Douglas Biesecker of NOAA's Space Weather Prediction Center. "In this
case, it's an early omen of solar storms that will gradually increase
over the next few years."
To read more about the implications of increased solar storms, click
here: www.noaanews.noaa.gov/.
Source: National Oceanic and Atmospheric
Administration
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Top
Labor-Saving Ideas: A Note From The Soybean E-Digest
Editor
Planting season is only a short time away and it's
time to think about how to make field work preparations and planting
more efficient before you find yourself in a bind. For those of you who
have cost-effective labor saving ideas that could work well for others
as they prepare to plant soybeans this spring, I welcome you to write to
me (John Pocock) at jpocock@csdigest.com. I'll pass
along the top ideas to other readers in an upcoming issue of the
Soybean E-Digest.
As always, please write to me at: jpocock@csdigest.com if you have
any questions or concerns about this issue or any other ideas for topics
that you would like me to cover in the weeks and months ahead. Thanks
for reading!
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