9/20/19
Marketing Opportunities
By Phil Madsen, Originator, Lyons
 

Corn and soybean nearby futures have both traded higher since the September WASDE report on the 12th despite the only mildly bullish news from the day being the decrease of soybean carryout in 19/20 to 640 million bu. The main takeaway from the day was that China came back and bought soybeans off the PNW (“goodwill gesture” or concern about Brazilian dryness?). While this is a start, the US will still need to see sales going forward in order to get soybean carryout under a billion bu. The Sept WASDE report decreased production from the previous report, just not to an extreme as many were hoping/expecting. The fact remains that if we remain on the same demand pace it will take away the need for the futures market to rally significantly.

Corn exports inspections, along with sales, are running at about half pace of last year. Ethanol plants are threatening to cut back production and in some cases shutting plants down due to low margins. If this trend continued of only exporting half of last year, and even dropping ethanol production 10%, it would equate to the same loss as (roughly) 9.5 million corn acres at the USDA projected 168 bu corn yield. The USDA may still likely decrease yield and/or bu but the US still remains between $.20-.40 out of the global export market in both corn and soybeans and this is the way we increase domestic demand.

It isn’t all doom and gloom as the US interior rail market is an efficient way to move grain/oilseeds quickly out of the country if the market comes back due to price/international crop uncertainty. Turmoil is brewing in Saudi Arabia as tensions erupt with Houthi rebels or Iranian drones, which could lead to higher energies if turmoil continues and the resumption of ethanol production.

In a year like this where a large carryout exists but local crop failures are prevalent, it could be an unparticular year where we see calendar spreads wide and basis remain firm/positive. Talk to your local CFC grain originator to help talk you through the opportunities this market brings as well as great opportunities to begin pricing in new crop of 2020.

Silage and Sorghum
By Jacob Horstman, Nutritional Consultant
 

 

 

As I sit down to write this article, I look back on how challenging the last 7-10 days have been. Much of our trade territory was “blessed” with anywhere between 7 and 10 inches of rain last week. Under normal circumstances this would be a problem, but this year it is even worse. Everyone that I have talked to this past week has said the same thing, “With all these PP acres and all the cover crops I planted, I was going to have all this feed. Now how am I going to get it out?”

Along with these challenges, time keeps moving and the corn that was planted for silage keeps inching closer to maturity, so everyone needs to be aware of the moisture level of their corn. That way producers can harvest their corn silage at 65-70% moisture. If silage is put up too wet, seepage will occur thus resulting in yield loss. If corn silage is put up too dry, packing becomes an issue which leads to spoilage. In these challenging economic times it is important to control what we can. By trying to get our silage put up right and covering the silage pile, we can hopefully reduce our chances of waste and help ourselves save some money.

Another topic that I have been getting a fair amount of questions on is cover crops and forage sorghum. Optimal time to chop forage sorghum is when the grain in the head of the plant has reached the dough stage. At the dough stage the plant is at about 70% moisture. If producers plan to graze any type of forage sorghum, be aware that once we get a frost the plant develops an acid called Prussic Acid. This can kill cows so it is important to make sure that after a frost the cows are pulled off for 7-10 days following a frost. This occurs in forage sorghums and sorghum-sudan mixes and is a concern if you plan to graze it. Those of you that are planning to chop or cut and bale it don’t have this concern. Prussic Acid does not develop in turnips, radishes or millets so there is no concern there. If anyone has any questions or concerns regarding these topics feel free to give Brooke or me a call and we can help you make the best decision for you and your livestock.