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US NAFTA Ag Rift

10/17/2017

By Jerry Hagstrom
DTN Political Correspondent

WASHINGTON (DTN) -- Representatives of the U.S. and Mexican agriculture held a news conference Friday at a high-end restaurant inside the Newseum in Washington to warn that any proposal to allow produce farmers to invoke trade remedy laws over seasonal surges could sink the entire North American Free Trade Agreement.

But a representative of the Florida Fruit and Vegetable Association was on the lower level of the restaurant, ready to tell reporters the story from the perspective of Florida growers, who have urged the Trump administration to put forward that proposal.

Bosco de la Vega, president of Consejo Nacional Agropecuario (CNA), the largest Mexican agricultural organization, called NAFTA a great agricultural success for Mexico, the United States and Canada, and said that the "seasonal-products proposal is a non-starter" for Mexico in the negotiations.

De la Vega noted that Agriculture Secretary Sonny Perdue had said the Trump administration's goal in the NAFTA negotiations is "first of all, to do no harm," and said that the U.S. demand that its "seasonal products" — such as strawberries and bell peppers grown in Florida — be given a special status when it comes to dispute-resolution mechanisms is a threat "so serious" that it could put the entire agreement in jeopardy.

"If NAFTA is overturned for agriculture, U.S. farmers could face the kind of high tariffs that prevailed before the agreement," de la Vega added.

De la Vega also noted that there are divisions within Mexican agriculture and that if the United States insists on a seasonality provision, grain farmers and others in Mexico would ask for similar treatment that would hurt U.S. farmers.

The Mexican agriculture industry also rejects the Trump administration's proposed "sunset clause" under which the agreement would terminate every five years unless countries agreed to continue it.

A sunset clause "would generate uncertainty and instability for investors ... our countries cannot reinvent themselves every five years," de la Vega said.

Backing up de la Vega's comments were U.S. Grains Council CEO Tom Sleight, United Fresh Produce Association CEO Tom Stenzel and representatives of the National Corn Growers Association, the Corn Refiners Association, Mexican avocado growers and fruit and vegetable importers.

Sleight noted that Mexico is the No. 1 market for U.S. corn products and a representative of the Corn Refiners Association said that 75% of U.S. high fructose corn syrup production goes to Mexico. The Mexican market is "irreplaceable," the CRA representative said.

Stenzel of United Fresh, whose national members include Florida fruit and vegetable growers, said he sympathizes with those growers who believe they have been harmed by imports but that "We as an organization are continuing to advance do no harm."

The focus should remain on the consumer, and with the U.S. Dietary Guidelines recommending that people fill half their plates with fruits and vegetables, the American people need year-round availability of fresh fruits and vegetables, Stenzel said.

Irwin Altschuler, a lawyer with Greenberg Traurig, said that if the rules are changed to make it easier for growers to bring dumping and countervailing duty charges over seasonal concerns other agricultural sectors will find ways to bring cases.

Asked by DTN whether U.S. agriculture's position within the negotiations has been hurt by the absence of a politically appointed chief agriculture negotiator, Sleight said that the industry looks forward to the confirmation of Greg Doud to that position but that "we have had good access to the administration" and believe the administration is familiar with agriculture's concerns.

While the news conference took place on the second floor of the restaurant, representatives of the Florida Fruit and Vegetable Association were hovering on the sidelines and on the first floor.

Reggie Brown of the Florida Tomato Exchange handed out comments that the Florida Fruit and Vegetable Association had sent to the Office of U.S. Trade Representative, urging the Trump administration to address problems associated with seasonal surges of Mexican imports into the United States. The letter maintains that Mexico engages in unfair subsidies and makes sales at prices below the cost of production.

Brown also handed out a letter to Trade Representative Robert Lighthizer from Sens. Bill Nelson, D-Fla., and Marco Rubio, R-Fla., pointing out the negotiating objectives under the 2015 Trade Promotion Authority, including "eliminating practices that adversely affect trade in perishable or cyclical products, while improving import relief mechanisms to recognize the unique characteristics of perishable and cyclical agriculture."

He also handed out similar letters from the Florida and Georgia House delegations.

Brown said he, too, had met with administration officials and is "delighted" that they understand the Florida growers' concerns. He described the U.S. agricultural relationship with Mexico as an "ice cream party."

"Everybody has a right to use trade [remedy] laws but perishable products." Others in agriculture, he said, "don't want to let us come the party with a spoon."

Jerry Hagstrom can be reached at jhagstrom@njdc.com

Follow Jerry Hagstrom on Twitter @hagstromreport

(AG/BAS)

Study: Gas Price Rise Not Due to RINs

10/17/2017

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- The prices of renewable identification numbers, or RINs, have not caused increases in gasoline prices from 2013 to 2017, according to a new Informa Agribusiness Consulting study funded by the Renewable Fuels Association.

In recent years, oil industry groups such as the American Petroleum Institute have claimed rising gasoline prices were a result of compliance with the Renewable Fuel Standard -- more precisely when it comes to the cost of buying biofuel credits.

Instead, the report released on Monday said prices at the pump have been driven by movements in crude oil prices, changes in the spread between domestic and international crude prices, and seasonal demand.

The U.S. Environmental Protection Agency is taking heat from biofuels groups, federal lawmakers and others for proposed changes to the RFS. Proposed changes reportedly include attaching RINs to exported biofuel gallons. The biofuels industry has expressed concern the change essentially would flood the market with RINs and drive down prices of the credits. In addition, the EPA recently proposed further reductions to RFS volumes for 2018.

"EPA seems to be on a mission to lower the price of RINs," RFA President and CEO Bob Dinneen said in a statement about the Informa analysis.

"The agency's proposed 2018 RFS renewable volume obligations, which for the first time lowered the total RFS volumes from the previous year, a subsequent notice of data availability proposing to lower the RFS further to reflect anticipated reductions in imported biodiesel, and rumors of an impending proposal to allow exported biofuel to qualify for the domestic program, all would have the effect of lowering the price of RINs. But this analysis demonstrates that EPA's efforts will have no impact on consumer gasoline prices."

Dinneen said the oil industry "needs to stop scapegoating the RFS and ethanol. The RFS is helping to bring the cleanest, lowest-cost and highest-octane fuel to consumers, and no amount of obfuscation can dispute that fact."

Sen. Charles Grassley, R-Iowa, and other lawmakers are scheduled to meet with EPA Administrator Scott Pruitt on Tuesday to talk about the recent RFS developments.

The new Informa analysis said the rise and fall in gasoline prices has been connected to the crude oil markets for years, long before the first RFS in 2005.

"It should be remembered that RINs were created only in the aftermath of the establishment of the Renewable Fuel Standard in 2005, and the differentiation of RINs by biofuel category did not take effect until 2010, whereas gasoline prices have been volatile for decades," the report said.

"The primary driver of retail gasoline prices is crude oil prices, as crude oil is the primary input to gasoline production. Historically, the running 24-month correlation between crude oil and retail gasoline prices has generally been between 0.80 and 0.99, which indicates a very strong relationship, given that a coefficient of 1.00 would indicate perfect positive correlation."

The analysis also said a "majority of the movement in gasoline prices" can be attributed to changes in crude oil prices.

On March 27, 2013, farm doc at the University of Illinois at Urbana-Champaign published a study, "High Gasoline and Ethanol RINs Prices: Is There a Connection?"

Farm doc said it was difficult to "nail down precisely" how or if high RIN prices affect retail gasoline prices.

"This situation does not mean we are left totally in the dark about the possible impact of rising RINs prices," farm doc said.

The study found that the price of CBOB gasoline at Chicago "generally declined" in the final three months of 2012. Then it began to move higher in late December, "prior to the start of the rally in D6 RINs prices."

Then, RIN prices started to rise in January 2013, peaked in early March, and then "declined modestly." Farm doc said the timing of the increase in CBOB gasoline prices "predates the increase in RINs prices by several weeks, which casts doubt on RINs prices as a significant driver of gasoline blendstock prices."

The analysis found CBOB prices were lower in late March than in October, "further suggesting that factors other than RINs prices dominated CBOB prices."

Farm doc found those companies that "must routinely buy RINs to meet their RVO are financially disadvantaged and have a clear incentive to pass along the higher prices in the supply chain to the degree it is feasible."

Read the new Informa analysis here: http://bit.ly/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

(AG/ES)

More Soy Needed for China

10/17/2017

By Lin Tan
DTN China Correspondent

BEIJING, China (DTN) -- China will import 95 million metric tons of soybeans in 2017/18 crop year, (3.49 billion bushels) then keep increasing imports an average 3.5 million tons per year for the following five years.

In total, the country plans to import 110 mmt of soybeans (4.4 billion bushels) in 2022, said Liwei Zhang, director of market information at China Grain and Oil Information Center (CGOIC).

Zhang made this estimate as he attended the American Soybean Association Beijing office as it celebrated its 35th anniversary recently.

"From the year 2008 to 2016, China's soybean import increased 6.2 mmt by year," said Zhang. "Several reasons caused this huge import increase: first, Chinese government policy of floor price purchasing forced crushing plants to international markets, while most of the domestic beans were bought by the state reserve; second, Chinese domestic soybean production decreased, because of the lower comparative profit to other crops, such as corn and rice.

"From this year on, to the following five years, we estimate that soybean import increase will be 3.5 to 4.0 mmt by year, due to increase in domestic production, and slowdown of feed demand," said Zhang.

Since 2015, China started a program to adjust the supply side of reforming farm products. One of the big changes will be to cut down corn acreage and increase soybean production. According to Ministry of Agriculture projections, by 2020, Chinese farmers will plant 140 million mu (23 million acres), with a yield of 30 bushels per acre, for a total output of 18.9 million tons (694 million bushels), an increase of 7 million tons from the year 2015.

According to CGOIC, after so many years of faster development, Chinese feed production growth will slow down a little in the next five years. Feed production will increase to 220 mmt in 2020, from 210 mmt currently; this is an increase of 5% in five years.

Meanwhile, China will increase ethanol production in the next five years. The country will produce 10 million tons of ethanol (1.66 billion gallons) by the year 2020, almost three times higher than the current level. "Increase in ethanol production will result in more DDGs production in the country, to substitute some of the soybean meal supply," said Zhang.

Chinese feed companies had used more soybean meal than required in their feed products when the corn price was high and meal price was low in the past two years. Now, the Chinese government stopped its policy of supporting the corn price; the price ratio of corn to meal will become normal. The feed industry will return to its normal formula of soybean meal portion in feed. This will cut some of the meal demand.

"However, the import trend is still positive, (the) U.S. will still be one of the largest suppliers of soybeans to China," Zhang added.

U.S. soybean delegations are optimistic of exporting soybeans to China. Thirty years ago, nobody knew how much animal protein the Chinese consumer would need; now, everybody knows China will become the largest soybean importer, said Jim Sutter, chief executive officer of U.S. Soybean Export Council. "What U.S. farmers did in China during the past 35 years was a great success."

"U.S. soybean farmers are reliable suppliers," said Terry Branstad, newly arrived U.S. Ambassador to China. "We observed China as one of the largest soybean crushing and animal protein markets and we will continue to be the largest supplier of China." Branstad was Iowa's governor before he was appointed Ambassador to China by President Donald Trump.

(ES/CC/AG)

Bean Trait News

10/16/2017

By Pam Smith
DTN Progressive Farmer Crops Technology Editor

Editor's Note: This article was updated on Oct. 13 with additional comments from an ADM representative. The original article was posted on Oct. 11.

**

DECATUR, Ill. (DTN) -- Farmers hungry for new postemergence soybean herbicide technology will have another trait system to consider for 2018. Dow AgroSciences has announced it will do a stewarded introduction of Enlist E3 soybeans in collaboration with grain processor ADM.

The Enlist E3 trait package allows soybeans to withstand in-season applications of 2,4-D choline, glyphosate and glufosinate. The special grain handling arrangement with ADM is aimed at keeping all resulting soybeans targeted to domestic use and out of export streams. The E3 package does not yet have import approvals from China and the European Union.

Previously, Dow AgroSciences has waited until all import approvals were in place before going to market with a new trait. This collaboration represents something of a departure for the seed and chemical company that has recently merged with DuPont.

It also represents something of a shift for ADM since the company was one of the grain firms that sued Syngenta when Chinese shipments of grain tested positive for the MIR162 trait, known as Viptera. At the time, the trait did not have import approvals in that country. China has since approved the trait. ADM also balked in 2016 when Monsanto sold Xtend soybean varieties before European Union (EU) approvals were granted.

The Dow/ADM agreement represents a strategic plan being implemented prior to planting, according to ADM spokesperson Jackie Anderson. "ADM is fully supportive of biotechnology and of technology providers who want to responsibly launch new technologies in compliance with applicable laws," Anderson said in email correspondence with DTN. "We believe that all members of the value chain have a role to play in enabling continued innovation in agriculture, and that this program offers a blueprint for how industry participants can work together to ensure that farmers have the best technologies available."

John Chase, commercial lead for Dow AgroSciences' Enlist Weed Control System, said the project is a Dow AgroSciences-initiated project that has long been in development. He noted the company did have a limited acreage program for the past few years that allowed farmers to trial Enlist corn under stewardship agreements.

Chase said the driver is the need for farmers to access new weed control technologies. "We feel strongly that when advanced solutions are available and fully approved in the United States, they should reach farmers as quickly as possible," he said. Enlist soybeans have full approvals for cultivation in the U.S. Enlist Duo and Enlist One herbicides also have approvals from the Environmental Protection Agency (EPA) for use in the trait system.

"Those import approvals are very important to us and the efforts continue to obtain them," Chase said. A news release announcing the ADM program showed industry support for the effort.

"The American Soybean Association (ASA) appreciates the tight, closed-loop production and processing system that has been developed," said ASA President Ron Moore, a farmer from Roseville, Illinois. "This will allow a number of farmers to experience the Enlist weed control system and is designed to keep all production out of export channels. We also appreciate Dow AgroSciences' continued efforts to seek import approvals in China and the EU."

Enlist cotton was commercialized in 2017 and Enlist corn, which now has the necessary import approvals, will see commercial plantings in 2018. Enlist E3 was developed with MS Technologies and is a three-way molecular herbicide stack created by one genetic insertion. It differs from another Enlist soybean system that has the same herbicide tolerances, but was created by breeding in the Roundup Ready 2 (glyphosate-tolerance) event. Only Enlist E3 beans are involved in the marketing arrangement with ADM.

Chase described the arrangement with ADM as a comprehensive closed-loop system. Four ADM processing plants will handle the resulting production of the planted production: Mankato, Minnesota; Frankfurt, Indiana; Mexico, Missouri and Deerfield, Missouri.

While Chase did not want to estimate possible production figures in an interview with DTN, he said the geography of the Enlist E3 soybeans would not be restricted to the area around those four processing plants. "We are limiting the number of acres, but not where the soybeans will be raised. Production will be substantial enough to have a commercial experience," he said.

Chase added that growers who raise the Enlist E3 soybeans would need to apply for the opportunity and will be carefully vetted over the next several months. They also will need to guarantee 300 acres of production, on-farm storage and an ability to follow stewardship protocols. There will be third party auditors monitoring proper cleanout procedures and other aspects of the program, Chase noted. "There will be considerable resources put to tracking this product between the farm and the processing site," he said.

ADM's Anderson indicated that each approved location would have specific delivery windows. "Any soybeans delivered to those locations during those timeframes, along with products derived from them, will be marketed to North American customers only. We will coordinate with participating farmers to deliver the soybeans during this time. There are detailed protocols to ensure a closed-loop system in which Enlist E3 beans are delivered only to the designated processing facilities during the proper timeframes," she said.

Variety offerings for 2018 will be in the heritage Dow AgroSciences' brands, which include Mycogen, Broadbeck, Pfister, Dairyland and Prairie Brand.

Details of the program will be made available through participating seed companies in fall 2017 for the 2018 planting season. For more information and to find out how to participate in this program, visit Enlist.com.

Pam Smith can be reached at Pam.Smith@dtn.com

Follow Twitter @pamsmithdtn

(GH/ES/AG)

New Dicamba Rules

10/16/2017

By Emily Unglesbee
DTN Staff Reporter

ROCKVILLE, Md. (DTN) -- Growers will have access to dicamba to spray on dicamba-tolerant crops in 2018, but the herbicides will come with new label restrictions and will be categorized as restricted use pesticides.

EPA announced Friday that the dicamba "registrants voluntarily agreed to registration and labeling changes including making these products restricted-use, record keeping requirements, and certain additional spray drift mitigation measures." These label changes will apply to Monsanto's XtendiMax herbicide, BASF's Engenia herbicide and DuPont Pioneer's FeXapan.

You can find the new label for XtendiMax, here: http://bit.ly/… and Engenia here: http://bit.ly/…

Here are the highlights of the new EPA restrictions for dicamba for 2018:

The dicamba herbicides will be restricted use pesticides, which will limit their availability and use to certified retailers and applicators, as well as require more comprehensive record keeping.

State pesticide regulators and agencies will be required to train all applicators before they can use the dicamba herbicides.

Applications are limited to sunrise to sunset, effectively banning nighttime spraying, when temperature inversions are most likely to occur.

Applications are also limited to wind speeds of 3 to 10 mph.

Applicators must keep records showing they have surveyed the surrounding area for susceptible and sensitive crops. The new labels include graphics to help explain the herbicide's buffer requirements and attempt to clarify what counts as a susceptible or sensitive crop.

These label changes do not address the issue of dicamba volatility. The new dicamba herbicides are designed to be significantly less volatile than older formulations. However, scientists from a number of universities have presented data to show that the products do volatilize and remain in the air for many hours and even days following application.

Manufacturers have steadfastly denied that volatility was a significant contributor to off-target dicamba injury, which affected 24 states and more than 3 million acres of soybeans in 2017.

Scott Partridge, vice president of global affairs for Monsanto, told DTN that as long as XtendiMax is applied according to the new labels, any volatility that may occur would not cause economic damage to neighboring non-dicamba-tolerant soybean fields.

Monsanto is pleased with the new label changes and restricted use classification, which the company submitted voluntarily to EPA, Partridge added. The EPA said it worked closely with dicamba manufacturers, as well as state regulators and Extension agents to craft its new restrictions.

"What we proposed in this new label addresses exactly what we found to be cause of off-target [dicamba] movement this year," Partridge said. "We support mandatory training, record keeping and limiting sales to certified applicators. We believe this is the right move."

Other groups are less pleased with EPA's decision.

"This bow to pesticide-makers virtually assures ongoing dicamba drift will continue to damage millions of acres planted by farmers who choose not to plant Monsanto's crops," said Nathan Donley, a senior scientist with Center for Biological Diversity. "The research is clear that dicamba drift is unbelievably difficult to predict and control yet the EPA has bought the industry line that the user, not the product, is at fault."

Work by Purdue University and others have questioned the practicality of meeting label restrictions given the few number of days available with winds below the former requirement of 15 mph. The new, lower, wind maximum could make days suitable for spraying even fewer.

How dicamba use plays out in 2018 will be key to the future of the new dicamba herbicides, EPA noted in its release of the new restrictions.

"EPA will monitor the success of these changes to help inform our decision whether to allow the continued 'over the top' use of dicamba beyond the 2018 growing season," the agency said. "When EPA registered these products [in 2016], it set the registrations to automatically expire in two years to allow EPA to change the registration, if necessary."

Some states are considering even tougher application restrictions ahead of the 2018 season.

See the EPA release here: http://bit.ly/…

Emily Unglesbee can be reached at Emily.unglesbee@dtn.com

Follow Emily Unglesbee on Twitter @Emily_Unglesbee

(GH/BAS)

Ag's HR Coach

10/16/2017

By Lori Culler
DTN HR Columnist

When the words "employee training" are mentioned most farm managers typically do one of three things -- laugh out loud, shake their heads in disgust, or look highly confused. There is a misperception when it comes to training, which is nothing more than sharing knowledge and teaching your employees their role so they can perform their best. It is often looked at as a daunting task with an unknown reward for the farm, but it doesn't have to be complicated to be highly effective.

With the pool of employees in agriculture shrinking quickly, especially as the boomers are retiring, hiring outside of our industry or more junior employees is going to be the name of the game. The farms capable of bringing new hires up to speed quickly are the ones that will remain competitive in the industry. We all want our next hire to walk through the door with a background full of farming. The question remains, even if that individual does come walking through the door, are they the right person for the job? The resume may look strong, but are they calcified in their ways? What's their work ethic like? I've heard too many farms get roped into hiring someone with experience even though they observed some personality flaws in their initial discussions.

Sometimes our best long-term hire doesn't have the perfect background. An all-star farm employee can easily come from a smart individual with drive and basic skills. There's a reason my husband with a military/construction background leads the tomato and grain operations on the family operation -- it's not because he came with farming background. He came with strong mechanical knowledge, the ability to lead others and the strong work ethic and personality fit.

TRAINING CAN BE SIMPLE

Teaching employees about the farm, equipment and processes doesn't have to be drawn out, classroom-style training. Simply start with a basic document and build a list of items you want to cover with your new hire. On our farm, we originally started with two documents -- one listed everything we wanted to share about the organization and the other was a list of items to teach about the specific role on the farm.

Create an "about-us" page to document what you would like to share about the company, such as history, structure, family members, landlords, scope/size of farm, preferred communication style, company culture, key employees and their backgrounds, etc. You can slowly add to the about-us page over time and in the future expand to add work rules and job expectations.

For a particular role such as farm operator, start a list of all the tasks and knowledge that have to be shared. It should include everything from preventative maintenance, to what to watch for in the field, problems that have risen in the past, what data needs to be tracked, etc. Include the new hire in the process of expanding your original list. They could keep track of everything they learned their first several months. With modern technology, they could use their smartphone to add in-the-moment ideas. Not only is that a great way to start your first "training" doc, you have now engaged your new employee in an important task that allows them to contribute to the farm on a deeper level.

BENEFITS TO TRAINING

There's an extra benefit to outlining job roles and the company, it can be used as a guide for determining future hires. I encourage my clients to take a hard look at who fits within their organization. In my organization, there are core attributes each of us share that are critical for our success. If someone doesn't have them or has certain attributes we have defined as not a fit, they don't get hired. At AgHires, we have a farmer in Minnesota who looks for out-of-the-box thinkers, and culturally he said they are pretty clean talkers, family-focused individuals with an all-hands-on deck mentality. Someone that is too rigid in their thought process or prefers their tasks to be mapped out wouldn't fit. What are those core attributes your employees need to come with to be successful at your operation?

Besides the benefit of "molding" your new hire into how you prefer work to be done, you might discover you want to make changes to your practices. When working side-by-side with someone teaching them, you start to see these tasks from a different light, which might spark some changes. For example, you might be informing them at the end of the day you would like to know the number of acres they finished and in that discussion, you end up coming up with a daily harvesting goal or a process for texting the number of acres to multiple people in the operation so everyone is on the same page. The mere walking through training spurs all sorts of questions from you and the employee on the "why do we do it this way?" and it just may result in better future practices.

Training doesn't have to be a daunting task. Taking the time and putting a little effort into the process can help you find that star employee you need. Maybe they don't have an agriculture background, but they have the skills to bring your organization to the next level.

**

Editor's note: Lori Culler grew up on a vegetable and grain farm and is the founder of AgHires (https://aghires.com/…), a national employment recruiting service and online ag job board based in Temperance, Michigan. Email lori@aghires.com and find other labor management tips under Resources at www.dtnpf.com

(CZ/BAS)

Corn Quality Issues Sprout Up

10/13/2017

By Russ Quinn
DTN Staff Reporter

OMAHA (DTN) -- Farmers in the Western Corn Belt saw heavy rains in the last couple of weeks, which delayed the start of harvest. Now as it begins to dry some in locations, farmers are returning to their fields and are finding certain issues with their corn crops.

Among the issues are premature corn kernel sprouting and weakened stalks thanks to the large amount of moisture that fell in the region. A continued slow harvest combined with more uncooperative weather could mean some bad news for corn farmers.

EARLY OCTOBER RAINS

Heavy rains have doused most of the WCB in recent weeks, according to DTN Senior Ag Meteorologist Bryce Anderson. The area seeing the heaviest rains stretched from central Kansas through the eastern half of Nebraska, the western half of Iowa and into southern Minnesota.

One area hit especially hard by the heavy rains was from south-central into eastern Nebraska. In the first 11 days of October, this area averaged 3.72 inches of rainfall, which is about 2.87 inches above normal, Anderson said.

"That 3.72 inches is 437% of normal," Anderson said. "A normal average rainfall total for the Oct. 1-11 time frame from these stations is just 0.85 inch."

Heavy rains and even hail damage have presented some complications for farmers in the region this fall.

Doug Saathoff, who farms near Trumbull in south-central Nebraska, tried to harvest soybeans on Wednesday but decided it was just too damp.

"Soft ground and flex heads are a bad combination," Saathoff told DTN. "They tend to push dirt when conditions are like this."

SPROUTING CONCERNS

Since Saathoff couldn't harvest beans Wednesday afternoon, he stopped by one of his cornfields and picked a bunch of ears. One of the ears had evidence of premature corn kernel sprouting. He only found sprouting on one ear, but Saathoff said he fears this could be a sign of things to come for farmers in the region.

Just down the road from Saathoff, Hastings farmer Randy Uhrmacher has also found kernel sprouting in one of his Adams County cornfields. He posted a photo of a sprouting ear of corn on Twitter.

Despite finding some sprouting, he said he really doesn't know how widespread the problem is.

"I just walked another field with a different hybrid and it looked fine," Uhrmacher said. "A couple of guys commented on my tweet, saying it is common."

According to a report by Bob Nielsen of Purdue University that was posted on the university's Corny News Network website, corn kernel sprouting occurs when dry kernels (less than 20% grain moisture content) are re-wetted, especially when temperatures are warm. A common situation for sprouting to occur is when there is a combination of dry grain, upright ears on the plants and rainfall that is captured by the husk leaves of the upright ears. The result is sprouted kernels near the butt of the ear.

The likelihood of germination occurring on upright ears with grain at higher moisture contents is typically much less than for drier grain, Nielsen wrote.

"Overall grain quality can deteriorate enough to cause problems with drying and storage of grain," Nielsen wrote. "Another consequence of the increase in the percentage of broken corn and foreign material in affected grain delivered to the elevator is that it may result in significant grain price discounts to the grower."

STALK QUALITY ISSUES

Another agronomic concern beyond kernel sprouting is deterioration of stalk quality in corn. Stalk rotting due to the stalks weakening from moisture is also high on farmers' mind as well, especially with harvest getting off to such a slow start in the WCB.

Don Batie, who farms near Lexington, Nebraska, said he doesn't believe it is much of an issue right now but is something to watch as harvest progresses.

"I haven't checked my stalks to see if we have any stalk rot starting, but that's possible with all of this wet weather," Batie said. "This is the perfect weather for that."

He was starting to harvest soybeans on his Dawson County farm on Wednesday afternoon. Farmers in his region are focusing exclusively on getting their beans harvested after severe thunderstorms with hail pounded the area on the first two days of October.

The field he was harvesting Wednesday afternoon was hit by hail, and Batie figured there was about 5 to 6 bushels per acre on the ground. Some of his neighbors to the south of him reported losing closer to 15 to 30 bushels per acre, he said.

Batie said the farmers in his home region can't combine beans fast enough as pods are cracking open with the moisture. His beans were at 15% moisture at 11 a.m. Wednesday, and by 2 p.m., they were down to 12%.

Saathoff also saw some of his bean fields damaged from hailstorms. He estimated his loss could be around 10 bpa, at least in the field he was in on Wednesday.

Also weighing on farmers' minds in the region is the amount of time harvest could ultimately take this fall.

Normally, Batie will harvest until the second week of November. But with the weather delays he has already seen, harvest could be pushed into the end of November and possibly even into December with more weather delays.

With harvest stretching that late into the year, wind and snow could very well be a possibility. That would be "very bad" for the weakened corn stalks in his region, Batie said.

"My guess is many of us will still be harvesting on Thanksgiving this year," he said.

The Purdue University report on premature corn sprouting can be found at https://www.agry.purdue.edu/….

Russ Quinn can be reached at russ.quinn@dtn.com

Follow Russ Quinn on Twitter @RussQuinnDTN

(SK)

USDA Reports Flash

10/13/2017

By Todd Neeley
DTN Staff Reporter

WASHINGTON (DTN) -- USDA pegged 2017-18 corn production at 14.28 billion bushels, on the high end of pre-report estimates and up 1% from the September forecast. The corn crop is expected to have an average yield of 171.8 bushels per acre, a 1.9-bushel increase compared to the September estimate.

Soybean production for 2017-18 was estimated of 4.431 billion bushels, the same as the September report. However, USDA lowered yield to 49.5 bushels per acre, down 0.4 bushel from last month. Harvest area is forecast at a record high of 89.5 million acres, up 1% from the September estimate.

These latest numbers come from USDA's World Agricultural Supply and Demand Estimates report for October, the first report of the year to use farmer-reported acreage data from USDA's Farm Services Agency (FSA).

Thursday's new U.S. ending stocks estimates were bearish for new-crop corn and wheat but bullish for new-crop soybeans, said DTN Analyst Todd Hultman. The world ending stocks estimates from USDA were slightly bullish for corn and soybeans but bearish for wheat, he said.

For DTN's exclusive audio comments on today's reports, visit: http://listen.aghost.net/…

Crop Production: https://www.nass.usda.gov/…

World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…

CORN

Corn acreage was lowered to 83.1 million harvested acres, within pre-report expectations and down 4% from last year.

Domestic corn ending stocks were raised 5 million bushels to 2.34 billion bushels, up from last year's ending stocks of 2.295 billion bushels, as estimated in USDA's September Quarterly Stocks report. The new ending stocks number was on the high end of pre-report analyst estimates.

USDA increased corn production in the U.S. despite lowering production slightly in Illinois, Iowa, Minnesota and Nebraska, the four largest corn-producing states.

World ending stocks for corn were 201 million metric tons, down 26 million metric tons from last year and down slightly from the September WASDE estimate of 202.5 million metric tons.

The average farm-gate price for corn was left at $3.20 per bushel.

SOYBEANS

The soybean crop's average yield was pegged at 49.5 bpa, down 0.4 bpa from the September estimate.

Domestic soybean ending stocks were pegged at 430 million bushels, down 45 million bushels from the September report. That was up from last year's ending stocks of 301 million bushels, as estimated in the September Quarterly Stocks report. Global soybean ending stocks were 96.1 million metric tons, slightly up from last year, and within pre-report expectations.

The average farm-gate price for soybeans was left the same at $9.20 per bushel.

WHEAT

Domestic wheat ending stocks were 960 million bushels, above the pre-report average estimate and 27 million bushels higher than the September report. That number is down 224 million bushels from the 2016-17 ending stocks.

The average farm-gate price for wheat was left at $4.60 per bushel.

COTTON

USDA forecast cotton production at 21.1 million, 480-pound bales. That is up 23% from last year. Yield is expected to average 889 pounds per acre, which would be the second-highest yield on record.

**

Editor's note: Join DTN Senior Analyst Darin Newsom at 12 p.m. CDT Thursday for a look at the latest USDA Supply and Demand and Crop Production estimates. Register now at: http://bit.ly/…

U.S. CROP PRODUCTION (Million Bushels) 2017-2018
Oct Avg High Low Sep 2016-17
Corn 14,280 14,168 14,329 13,836 14,184 15,148
Soybeans 4,431 4,439 4,480 4,321 4,431 4,296
Grain Sorghum 364 370 376 364 371 480
U.S. AVERAGE YIELD (Bushels Per Acre) 2017-2018
Oct Avg High Low Sep 2016-17
Corn 171.8 169.7 171.2 167.0 169.9 174.6
Soybeans 49.5 49.8 50.2 48.5 49.9 52.0
U.S. HARVESTED ACRES (Million Acres) 2017-2018
Oct Avg High Low Sep 2016-17
Corn 83.1 83.5 84.0 82.9 83.5 86.7
Soybeans 89.5 89.1 89.8 88.5 88.7 82.7
U.S. ENDING STOCKS (Million Bushels) 2017-2018
Oct Avg High Low Sep 2016-17*
Corn 2,340 2,249 2,450 1,985 2,335 2,295
Soybeans 430 453 503 375 475 301
Grain Sorghum 28 35 39 31 29 34
Wheat 960 946 971 928 933 1,184
*Corn, soybeans, grain sorghum USDA's Sep 29 Quarterly Stocks
WORLD ENDING STOCKS (Million Metric Tons) 2017-2018
Oct Avg High Low Sep 2016-17
Corn 201.0 201.5 204.0 196.7 202.5 227.0
Soybeans 96.1 96.5 98.0 93.9 97.5 96.0
Wheat 268.1 262.9 265.4 258.0 263.1 255.8

(AG)

USDA Report Review

10/13/2017

By Darin Newsom
DTN Senior Analyst

In every set of monthly USDA Crop Production and Supply and Demand reports, including the October, there are hundreds of numbers for analysts and traders to look at. The spotlight is supposed to be on corn and soybean acres since USDA "might" use official Farm Service Agency data. More often than not, though, these acreage numbers change again in January. With all these choices of numbers for traders to get excited about, including the spotlighted acres, it's interesting that this time traders decided to focus on a number that was released at the end of September.

Watching the markets rather than the numbers as they come out, as I always do, I saw November soybeans shoot 14 cents higher, then 20 cents, then 30 cents, and finally 32 cents above Wednesday's close before taking a short break. Not knowing what numbers USDA had unsealed, my initial hunch was ending stocks had to be smaller than expected. Not that I have a particularly strong insight, but simple logic indicated that was the most likely candidate.

The average pre-report guess came in at 453 million bushels, down only 22 mb from USDA's mid-September guess of 475 mb. However, between the September and October round of guesses came the September Quarterly Stocks report. There USDA reported 44 mb less than its own September estimate, 301 mb, a number that not only became the new ending stocks figure for the 2016-2017 marketing year but also beginning stocks for 2017-2018. Remember, 44 mb less than what had been previously estimated.

USDA's updated guess on 2017-2018 ending stocks on Thursday was 430 mb, certainly lower than the 453 mb average pre-report guess. But how did it relate to USDA's own previous new-crop ending stocks estimate? That's right, it was 45 mb less. So, accepting a couple rounding differences and the fact no other supply or demand guess changed for new-crop soybeans, the change in new-crop ending stocks was simply a function of the "final" ending stocks/beginning stocks number released on Sept. 29.

And that was the only number that mattered Thursday. Corn yield, production and ending stocks were all increased, and the market did indeed want to go down, but spillover buying from soybeans didn't allow that to happen. Wheat... well, it did go lower due to a 27 mb increase in domestic ending stocks and a 5 million metric ton bump in world carryover. But neither of those numbers were much of a surprise.

On the subject of surprise, there were some ag economists, post-report, left scratching their heads over USDA's decreased soybean ending stocks figure. How was it possible, given that national average yield continues to be guessed at roughly 50 bushels per acre? The answer is simple: Decreasing its domestic soybean ending stocks figure is what USDA does, with a pattern so consistent the constant overestimation seems systematic.

Though still early, only six months into a 15-month cycle of guesses, the 2017-2018 path is similar to the one USDA took during the 2015-2016 marketing year. That year, USDA started in May of 2015 with a guess of 500 mb, trimming it to 425 mb by October. This year, the high guess of 495 mb occurred in USDA's June report, before the 430 mb scribbled in the box for October. The September 2016 Quarterly Stocks report concluded that marketing year's journey with a figure of 197 mb. For now, using the average of the last four years' declines, next September could come in at 215 mb.

Based on USDA's history, everything that comes before next September's quarterly stocks number, in relation to soybean ending stocks, should be viewed as completely irrelevant.

Darin Newsom can be reached at darin.newsom@dtn.com

Follow Darin Newsom on Twitter @DarinNewsom

(AG/CZ)

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