URBANA, Ill. – July 2016 soybean futures have increased by 25 percent since April 1, led by the nearly 50 percent increase in soybean meal prices. Soybean oil prices declined by nearly 10 percent. According to University of Illinois agricultural economist Darrel Good, the higher soybean prices generally reflected the 200-million-bushel reduction in the estimated size of the combined Argentine and Brazilian soybean crops from March to May and the resulting surge in export demand for U.S. soybeans.
Good says the USDA’s Grain Stocks and Acreage reports to be released on June 30 will provide important fundamental information for the soybean market and influence prices into the critical summer growing season.
“The stocks report will provide an estimate of stocks held on June 1, and the size of that estimate can be anticipated based on the estimated size of March 1 stocks, imports during the third quarter of the marketing year, and estimates of consumption during the quarter,” Good says. “March 1 stocks were estimated at 1.531 billion bushels and imports during the third quarter were likely near 6 million bushels based on Census estimates of exports in March and April.
“Based on the soybean crush estimates for March and April in the USDA’s monthly Fats and Oils: Oilseed Crushings, Production, Consumption and Stocks report and the National Oilseed Processors Association (NOPA) estimate for May, the domestic crush during the third quarter of the marketing year was about 487 million bushels. This is slightly larger than the crush during the same quarter last year. The NOPA crush estimate for May was record large for the month and exceeded the crush of May 2015 by 3 percent. To reach the USDA projection of 1.89 billion bushels for the year, the crush during the last quarter needs to be about 450 million bushels, or about the same size as the crush last summer.”
Cumulative marketing-year soybean export inspections through May 2016 totaled 1.598 billion bushels. Through April, however, cumulative Census export estimates exceeded inspections by 41 million bushels, Good says. “If that margin persisted through May, exports during the first three quarters of the year totaled 1.639 billion bushels. Exports during the third quarter were likely near 173 million bushels. To reach the USDA projection of 1.76 billion bushels for the year, exports during the last quarter of the year need to total about 121 million bushels, about equal summer exports of a year ago. As of June 9, the USDA reported that 221 million bushels of soybeans had been sold for export during the current marketing year, but are not yet shipped. That exceeds outstanding sales of a year earlier by 104 million bushels. With 11 weeks left in the marketing year, cumulative exports plus outstanding sales likely exceed the USDA projection of marketing year exports by 100 million bushels, or nearly 6 percent.”
Seed, feed, and residual use of soybeans during the third quarter of the year are calculated as total use during the quarter, as revealed by the June 1 stocks estimate, minus the crush and export estimates for the quarter, Good explains. Calculated use in that category has varied from -13 million bushels to 63 million bushels and averaged about 35 million bushels in the previous 10 years. “If use this year was near the average of 35 million bushels, total use would have been near 695 million bushels, leaving June 1 stocks at 842 million bushels, 215 million larger than stocks of a year earlier.”
The USDA’s March Prospective Plantings report revealed producer intentions to plant 82.236 million acres of soybeans this year, slightly less than last year’s estimated planted acreage of 82.65 million acres.
“Over the previous 20 years, when producer planting decisions were not directly influenced by federal acreage programs, the final estimate of planted acreage was less than intentions revealed in March in 10 years, equal to intentions one year, and larger than intentions in nine years,” Good says. “This year, the consensus seems to be that the June Acreage report will reveal that acreage exceeded intentions due to some switching of intended corn acreage to soybeans as the result of the increase in soybean prices relative to corn prices since March and the delayed corn planting in parts of the eastern Corn Belt. As previously mentioned, soybean acreage may also exceed intentions as a result of total acreage of spring planted crops exceeding intentions reported in March.”
According to Good, the uncertainty about planted acreage of soybeans means there is room for a surprise in the estimate this year. In addition, the final planted acreage estimate has differed from the June estimate by 400,000 acres or more in 15 of the past 20 years. The final estimate was less than the June estimate in nine of those 15 years.
“With minimal prevented acreage this year and soybean planting mostly complete by mid-June, except for double-cropped acreage to follow wheat harvest, we would expect the final acreage estimate to be relatively close to the June estimate this year.
“The recent increase in soybean prices has also reflected above normal temperatures, scattered rainfall patterns, and continued discussion of potentially stressful summer weather conditions in the United States,” Good says. “November futures are now $2.45 per bushel above the crop revenue insurance price established in February and harvest bids in the eastern Corn Belt have moved above $11. Although there is potential for prices to move even higher with stressful summer weather, that potential may be less than the potential for corn prices, depending on the magnitude of planted acreage, because soybean prices have already experienced a sharp rally and soybean yields are generally less sensitive to summer weather than are corn yields.”
Illinois state-wide 4-H Recognition Event
University of Illinois campus
Illinois 4-H Foundation Celebration
Orr Building - Illinois State Fairgrounds
U of I one of 13 universities calling for increased federal investment in agricultural research
URBANA, Ill. – In an effort to call for a surge in federal support of food and agricultural research, 13 research institutions in the United States joined the SoAR Foundation. The report released by this coalition highlights recent scientific innovations and illustrates how U.S. agricultural production is losing ground to China and other global competitors.
Retaking the Field includes research at U of I that addresses farmers’ needs for timely information. “Farmers tell us that they need to access information in their tractors—which are now GPS-guided. This is where they do their office work today,” says Illinois agricultural economist Scott Irwin. Irwin and his team developed a website called Farmdoc to serve the agricultural community in the Corn Belt. Updated daily, it now has over one million annual visitors.
“Farmdoc is a portal to information and decision tools,” Irwin says. “For example, when the most recent Farm Bill cut subsidies programs and expanded crop insurance, the Farmdoc team developed an interactive online tool to help farmers make sense of the new system.“
The report looks at the importance of agriculture and its related industries to the U.S. economy. According to the U.S. Department of Agriculture, this sector was responsible for nearly 1 in 10 jobs in 2014 and contributed $835 billion to the U.S. gross domestic product. Although every public dollar invested in agricultural research provides $20 in economic returns, the federal budget for agricultural research has remained flat for decades. Today, the U.S. trails China in both agricultural production and public research funding.
“Researchers are discovering incredible breakthroughs, helping farmers produce more food using fewer resources, and keeping our meals safe and nutritious,” says president of the SoAR Foundation Thomas Grumbly. “However, the science behind agriculture and food production is starved of federal support at a time of unprecedented challenges. A new surge in public funding is essential if our agricultural system is going to meet the needs of American families in an increasingly competitive global market.”
Farming has never been an easy endeavor and today’s challenges to agricultural production are daunting. The historic California drought continues and U.S. production is threatened by new pests and pathogens, such as the 2015 Avian Influenza outbreak that led to the culling of 48 million birds in 15 states and $2.6 billion in economic damages.
“Every year, the director of national intelligence testifies before Congress that our national security is threatened by hunger in unstable regions,” says Grumbly. “As the number of people on our planet continues to grow, we must produce more food. This cannot be done with yesterday’s science. We need a larger infusion of cutting-edge technologies.”
The other 12 institutions are: Cornell University, Iowa State University, Kansas State University, Massachusetts Institute of Technology, North Carolina State University, Purdue University, Stanford University, Tuskegee University, University of Florida, University of Nebraska-Lincoln, University of California- Davis, and Washington University in St. Louis.
Does the corn crop need more nitrogen?
URBANA, Ill. – The 2016 corn crop is off to a very good start in Illinois; fields in most areas have excellent stands, good uniformity, and very good leaf color, according to University of Illinois crop scientist Emerson Nafziger.
“The dark green color is in contrast with what we saw with the high rainfall in June of 2015,” Nafziger says. “Conditions of low sunlight and saturated soils mean pale green leaves.”
This year, starting in mid-May, warm temperatures, bright sunlight, and soils with adequate—but not excessive—moisture have allowed the corn to grow rapidly and take up plentiful soil nitrogen. Nafziger reports that in plots at Urbana’s South Farm, corn without fertilizer nitrogen is slightly smaller than corn fertilized with 200 lb of nitrogen, but both show dark green leaves.
“With warm temperatures and the crop just entering its rapid growth and nitrogen uptake phase, it seems highly likely that the crop growing in soils with the normal (nitrogen rate calculator) amount of fertilizer nitrogen should be able to take up all the nitrogen it needs. If soils dry out, that might reduce the amount of nitrogen taken up, but at this point there is little danger of developing nitrogen deficiency,” Nafziger says.
In 2015, well-fertilized corn had a total of 45 lb of nitrogen per acre in the crop when it was about 30 inches tall. When it tasseled about four weeks later, it had nearly 160 lb of nitrogen in the crop. Soil nitrogen over this period fell from 240 lb to 93 lb per acre, and total (plant plus soil) nitrogen fell from 285 to 242 lb per acre. Nafziger clarifies that this was under wet conditions, with some 8 inches of rainfall during the same period. Even with the drop in soil nitrogen to a relatively low level by the time of pollination, the crop in this treatment yielded 235 bushels per acre.
“At the estimated 1 lb of nitrogen taken up for each bushel of yield, the 2015 crop would have taken up about a third of its nitrogen after tasseling,” Nafziger states. “Given the low amount of soil nitrogen at tasseling, this additional nitrogen had to have come from mineralization and, possibly, from nitrogen deeper in the soil profile as the crop drew up water during dry weather late in the season. In any case, it’s clear that low soil nitrogen at tasseling did not result in low yields due to nitrogen deficiency.”
Nafziger cautions that it is premature to draw a strong parallel between 2015 results and what we might expect this year, but a number of signs point to a lower chance for nitrogen loss, and little danger of deficiency this year.
Despite the dark green color of most Illinois corn fields and moderate rainfall amounts this year, Nafziger says he has been hearing about producers and retailers gearing up to apply more nitrogen, some in fields that have had a full amount of nitrogen applied and where soils have not been saturated this spring.
“In fields that have already received their full complement of nitrogen, with most or all of the nitrogen applied this spring, there is no justification for adding more nitrogen,” Nafziger warns. “This does not appear to be one of those years when ‘just in case’ justifies adding more nitrogen fertilizer. It’s highly unlikely that a corn crop that is deep green at knee- to waist-high will experience nitrogen deficiency due to lack of soil nitrogen.
“While fear that the crop will run out of nitrogen has been a common theme, nitrogen deficiency symptoms that develop in the late vegetative or reproductive stages usually result from the crop running short of water. What is called ‘firing’ and looks like a shortage of nitrogen is really loss of lower leaf area as the plant dries out. As lower leaves start to shut down, they move nitrogen out to younger parts of the plant, including the ear, to keep the plant going as long as possible. Adding more nitrogen neither prevents nor cures this,” Nafziger explains.
If some or all of the nitrogen was applied at modest rates last fall or in early spring in an area that has gotten wet several times since, and if soil nitrogen sampling shows less than 15 ppm of nitrate-N in the top foot, then adding more nitrogen might be indicated. But even if soil nitrogen numbers don’t look very high, a deep green and rapidly growing crop is getting enough nitrogen, and as its root grow it will continue to get access to what’s in the soil. So adding more nitrogen may not benefit the crop.
“The crop is always a better indicator of soil nitrogen sufficiency at a given growth stage than are soil nitrogen tests,” Nafziger says. “As long as leaves keep their good, green color through pollination, we needn’t be too concerned that the crop will run out of nitrogen this season.”
More detailed information can be found on The Bulletin, at http://bulletin.ipm.illinois.edu/?p=3645.
Weed science field research tour announced
URBANA, Ill. – Farmers with questions about weed management will find answers at this year’s annual weed science field research tour, hosted by the University of Illinois. The tour will be held Wednesday, June 29th at the U of I Crop Sciences Research and Education Center, located immediately south of the main Urbana campus at 2008 Wright St. Extended.
“Similar to past years, we will carpool to the fields where participants can join in a guided, but informal, tour. The tour will provide ample opportunity to look at research plots and interact with weed science faculty, staff, and graduate students,” says U of I weed scientist Aaron Hager.
Participants can compare their favorite corn and soybean herbicide programs to other commercial programs and get an early look at a few new products that soon will be on the market.
Coffee and refreshments will be available under the shade trees near the seed house beginning at 8 a.m. A catered lunch will follow the tour at noon. Cost is $10, which covers the field tour book, refreshments, and lunch.
Please call Aaron Hager at 217-333-9646 with any questions.