Reuters Blogs

Commodity Corner

Views on commodities and energy

August 22nd, 2008

Crop tour answers some questions, raises others

Posted by: Karl Plume

final-1-1536-x-1152.jpg     More than 70 crop scouts began making their way home from Austin, Minnesota, on Friday after a week of 10-hour-long workdays counting and measuring corn and soybean yield potential through seven top production states around the U.S. Midwest.
    Based on the week’s findings in 2,100 fields and other data, tour leaders Pro Farmer newsletter released their 2008 corn and soybean production forecast early on Friday.
    They projected U.S. corn production at 12.152 billion bushels with the average yield at 153.3 bushels per acre. Soybean production was pegged at 2.930 billion bushels with an average yield of 39.95 bushels per acre.blog-final-002-1536-x-1152.jpg
    The corn estimate was below the U.S. Agriculture Department’s latest projection for 12.288 billion bushels and the soy production was under USDA’s 2.973 billion bushels forecast. USDA estimated the average corn yield at 155 bushels per acre and the soy yield at 40.5 bushels per acre as of August 1.
    But much has changed in the Midwest over the past three weeks. What some referred to as near-ideal crop weather earlier in the growing season was no longer the case.
    As the Pro Farmer Midwest Crop Tour’s two legs departed on Monday from Columbus, Ohio, and and Sioux Falls, South Dakota, crop scouts were already aware that variability and crop immaturity would be a big part of the story of this year’s corn and soybean crops. Scouts on the eastern leg quickly realized that dryness would be another major theme after finding gaping cracks in concrete-hard soils in most Ohio fields. The word was final-2-1536-x-1152.jpgpassed on to western scouts who were touring a surprisingly robust South Dakota corn crop and some of them remained sceptical until they saw for themselves as their routes moved east.
    Crop scouts will always welcome cool, dry weather during the crop tour, but it was difficult not to feel compassion for farmers that had not received any rain at all since July. Meanwhile, crop development in some fields was as much three weeks behind the normal pace, setting the stage for some nail-biting in the weeks ahead of the average first frost dates, which range from late September to mid-October depending on location.blog-final-005-1536-x-1152.jpg
    Tour organisers, farmers, and agronomists repeatedly stressed at evening meetings that most fields need rain immediately or else the yield estimates pulled from fields this week would begin eroding.
    Signs of a soggy start to the growing season were all there too, from washed out plots and replanted acres to swathes of pale green leaves on corn plants, a sign shallow root systems and nitrogen loss. Tops of fields that would normally look flat and uniform were discoloured and filled with potholes. Soybeans were planted in washed out patches of corn fields in wavy rows.
    All eyes now turn to the weather map. Soybeans need moisture to finish setting and filling pods. Corn needs just enough rain in the near term to add weight to undersized kernels, but not too much rain as that could slow down the crop’s already delayed development. And both crops will be racing for a photo finish in some areas, trying to get to the grain bin ahead of the first frost.

August 22nd, 2008

Farmers’ Full Moon Fever

Posted by: Mark Weinraub

moon.jpgFarmers around the U.S. Midwest hope that this year’s growing season will stretch out a few days longer than usual into the fall to make up for the slow start to the growing season. Corn and soybean crops around the U.S. Midwest are depending on a warm and rainy finish to the growing season to reach the full potential predicted by crop scouts on the Pro Farmer Midwest Tour.

To try and forecast the date of the critical first frost, which could devastate thousands of acres of crops that were planted late due to cold and wet conditions in the spring, farmers are looking to the sky. Or to be more specific, they are looking at the moon.

Farmers, most of whom employ technology such as GPS systems on their harvesters and utilize seeds that were genetically modified to grow insect and disease resistant crops, are depending on old wives tales and consulting their almanacs to forecast when freezing temperatures would arrive in their areas.

The discussion by farmers about the importance getting past the full moon in mid-September was paramount at many dinners during the Pro Farmer Midwest crop tour. Some farmers think that if the frost, which could inflict harsh damage on crops that were developing behind schedule due to planting delays in the spring, does not hit during the mid-September full moon, the crops will be safe until the next full moon arrives.

Other farmers in areas such as Nebraska were checking out signs such as the call of the locust and evening fog that they believe tip off the date of the first frost.

The bottom line is that there is no failsafe method to forecast the date of the first frost. But that does not stop farmers from trying.

August 21st, 2008

Corn, soy compete with wind for acres

Posted by: Mark Weinraub

turbine.jpgCrop scouts were busy in western Iowa on Wednesday trying to unlock the secrets of the upcoming soybean and corn harvest but they were ignoring another popular crop – wind.

Windmills are becoming increasingly common around the Corn Belt due to environmental concerns about traditional sources of power generation.

The wind harvest was taking up an unprecedented amount of acres this year in an area that some veteran scouts were referring to as this year’s garden spot of the Midwest in terms of potential corn and soybean yields.

In southern Minnesota, some growers were mulling offers from a wind farm company that had plans to erect windmills in that area. Some growers were being offered up to $5,000 a year to allow a windmill to be placed on their property, according to a farmer from that area who was taking part on the tour.

But the windmills can cause some problems, a farmer in west central Iowa told crop scouts. Dozens of windmills could be seen turning as the farmer told of some issues that might make farmers hesitate before collecting what appears to be easy money by renting out their acres to wind farms.

Maintenance workers need access to the windmills, so that can mean ploughing under more acres so a path can be built from the road to the windmill. Additionally, farmers have a harder time steering their machinery through fields if windmills sit right in the middle of prime crop producing territory. This can be particularly troublesome during years when poor conditions leave famers with only a short period of time to plant or harvest crops.

But still, the promise of cashing in on the green movement has a strong appeal to farmers, who like the promise of a steady annual payment.

The western Iowa scouts drove past a plant where windmill parts were waiting to be assembled in area fields. There were piles and piles of blades on the ground, suggesting that many area farmers were eager to take advantage of this new cash crop.

August 20th, 2008

Post-flood crop oddities in Illinois

Posted by: Karl Plume

replant-illinois-soy-1014-x-760.jpg    Crop scouts touring corn and soybean fields around the eastern Midwest this week have seen more than their fair share of the bizarre thanks to an abundance of moisture at planting and early in the growing season that forced some growers to cast off conventional farming practices and get creative.
    In eastern Illinois, heavy June rains on top of saturated soils drowned out freshly planted corn in some areas, sometimes more than once.
    The solution to fill those gaps in their valuable farmland? Plant soybeans, which can be seeded later in the season than corn.
    However, harvesting grain from those mish-mosh fields could be challenging. Farmers will have to turn on their GPS steering systems and navigate their combines around islands of corn that were lucky enough to survive the early season washout.
    Even veteran crop scouts that claim to have seen it all were baffled by the sight of one field in Edgar County, Illinois. After pooling water drowned out parts of a corn field, the farmer replanted the areas with soybeans. But some of the corn along the edges of the waterlogged patch survived and emerged along with the soybeans, leaving several overlapping rows with nearly mature grain-yielding corn and soybeans.
    USDA claims to have accounted for washed out acres in their harvested acres estimates, but those uneven swathes of corn and soybeans may still cause headaches for Pro Farmer crop experts on Thursday night when they will gather at the tour’s conclusion to come up with their yield forecast for both crops.

    Photo: Crop scouts Roger Bernard and Doug Miller of Iowa and Ramiro Pereda of Argentina inspect soybeans planted in a corn field that was partially flooded this spring in Edgar County, Illinois.

August 20th, 2008

Farmers pose biggest threat to crop tour scouts

Posted by: Mark Weinraub

Sharp edges on the leaves of corn plants, an unseen hole by the side of a field waiting for a car, a barbed wire fence protecting soybeans. All of these are hazards faced by crop scouts every year, not to mention the possibility of losing a boot in a muddy corn row.

But the biggest threat to scouts comes from farmers. Specifically, farmers who are infuriated by people trampling through their fields and damaging their crops. Stories abound about farmers making physical threats to scouts they discover in their fields.

Most farmers are placated after finding out who the crop scouts are and what they are doing. Leaders on the Pro Farmer tour carry a supply of baseball caps with them to offer farmers in a bid to smooth any ruffled feathers.

But one scout says he once offered a farmer a nickel for the three ears of corn pulled from a field after listening to a grower’s non-stop rant about how much money he had invested in the crop and how much harm the scouts were causing to the corn.

The problem stems from the fact that crop scouts do not ask permission to inspect the fields, a practice based on the idea that it is easier to beg for forgiveness than ask for permission.

To be sure, the majority of farmers met along the tour routes are incredibly polite and curious about any insights scouts might have about his crops and conditions in the area. Most farmers are aware that the tour is swinging through their area due to the media coverage and are happy to answer any questions tour scouts have about how the growing season is going.

This can lead to another problem, given a farmers’ propensity to turn short stories into long ones.

On Monday, scouts in northern Nebraska ran into the wife of a farmer who was startled to see three muddy scouts emerge from her corn fields and began yelling at them. After learning what the scouts were doing, the woman launched into a long monologue about how wet conditions delayed planting for weeks and how she had to tow her husband’s tractor out of the mud multiple times during the spring. She apologized for yelling but repeatedly said that she never knows what kinds of people might be snooping around her fields.

The conversation, while extremely friendly, caused the scouts to skip the survey of another field in the same county because they were now faced with the threat of missing dinner.

August 19th, 2008

Rainfall feast or famine in Ohio

Posted by: Karl Plume

Dry Soybean Field    The old adage “rain makes grain” could use a revision this year… at least in Ohio. It should read “properly timed rain, distributed uniformly throughout the growing season, makes grain.”
    An abundance of moisture this past spring stalled planting by several days to several weeks. Conditions later improved and crop development pushed ahead in Ohio, but then it turned very dry in early July.
    Signs of this year’s challenging weather are evident throughtout the state.
    Corn cobs are undersized and kernels are smaller than desired. Agronomists on the tour think abundant moisture this spring did not challenge corn plants to set deep roots and now that conditions are drier, the moisture they need is out of reach.
    Soybean plants could be waist-high in one spot of a field and barely reaching the knee just a few paces away. Areas drowned out by excessive moisture this spring are now dusty and dry, with cracks so wide you could twist an ankle.
    “If this area is not considered to be under drought, it should be,” said Mark Bernard, a crop consultant with the eastern leg of the tour.
    According to the latest U.S. Agriculture Department’s drought monitor map, the region is not even considered abnormally dry, although more recent USDA data has shown a steep decline in soil moisture ratings.
    As of Sunday, Ohio topsoil moisture was rated 65 percent short to very short, compared with 43 percent a week earlier.
    The area’s soybeans, which are currently setting and filling pods, could benefit from the remnants of Tropical Storm Fay which is approaching the U.S. Gulf Coast. Corn could also use some moisture to boost grain size, but some corn plants are already shutting down.
    Forecasters say the precipitation could arrive in Ohio by this weekend.

August 17th, 2008

Crop Tour Scene Setter

Posted by: Mark Weinraub

auction-pix-008.jpg    The annual Pro Farmer Midwest crop tour kicks off bright and early on Monday morning, giving participants a sneak peek at this year’s U.S. corn and soybean crops, valuable information that has the potential to send the futures market on another roller coaster ride this week.
    Severe flooding wreaked havoc on the newly seeded crops early in the summer, sending prices for both commodities to record levels.
    Good growing weather throughout July and August allowed the plants to recover nicely during the past six weeks and have left much of the crop looking very good from the roads. But farmers and agronomists insist that conditions are worse in the middle of the fields.
    The crop tour provides a perfect opportunity for those who want to see for themselves how the developing corn and soybean plants look. Scouts get down and dirty inspecting fields around the U.S. Midwest, counting soybean pods and ears of corn to estimate yields while taking note of any insect of disease issues.
    The tour means early mornings and long days for the scouts, something that farmers are accustomed but the schedule can be jarring for some of tour’s participants, including commodities traders, journalists and USDA officials. Bug spray, sun block and boots are a must for participants, quite a change from standard cubicle attire.
    Rain, a boon for the crops, can be the scourge of crop scouts as they scramble through the fields to get samples. Crop scouts also face challenges ranging from tricky navigation on country roads to the possibility of an angry farmer who does not want scouts trampling through his fields.
    The tour consists of an eastern leg and a western leg. The two groups will converge in southern Minnesota on Thursday afternoon. Final yield projections for both soybeans and corn will be presented on Friday. 

March 31st, 2008

No more ‘beans in the teens’? U.S. farmers plan more soy, less corn

Posted by: Alden Bentley

intended-plantings-graphic.jpg

American farmers are chilling on planting corn, or at least Monday’s USDA data points to a backlash against the overplanting of corn in 2007. So does this mean the ethanol promise is beginning to fade?

Soybean futures dropped their exchange-set maximum at the Chicago Board of Trade on Monday after the Department of Agriculture released its widely anticipated report on prospective plantings by U.S. farmers.

Corn and soybeans are planted in the same areas of the Midwest and Upper Midwest and farmers systematically rotate between the two crops. Corn is planted first but requires more fertilizer and energy intensive field work. Now soybeans appear to be the flavor of the year.

Farmers want to plant almost 75 million acres of soybeans, used in mainly animal feed, cooking oil and the renewable fuel biodiesel, up from 64 million last year. They are shifting land out of corn. After blanketing the Midwest with 94 million acres of corn in 2007 — the most since 1944 — 2008 will see a slightly-less-smothering 86 million acres. The plans should lift corn prices, a CME panel predicted.

On reuters.com, track corn futures prices here
Track soybean futures prices here