with Scott Irwin, Agricultural Economist - University of Illinois
There is a long-standing market saying that "big crops get bigger and small crops get smaller." This statement refers to the yield forecasting cycle of the USDA's National Agricultural Statistics Service (NASS). That cycle for corn and soybeans consists of monthly yield forecasts that begin in August and extend through November and culminate with the final yield estimate for the season that is released in January following harvest. Specifically, the statement implies that early NASS yield forecasts are "conservative" in years when yields are high and get larger as the forecast cycle progresses and are "optimistic" in years when yields are low and get smaller as the forecast cycle progresses. These notions are tied to the more general idea that NASS yield forecasts are "smoothed," meaning that the final yield estimate results from cumulative monthly changes in forecasts in the same direction. Some tend to believe that smoothing of NASS yield forecasts, particularly in years of yield extremes, is intentional in order to minimize or spread the price impact of very large or small yields. Alternatively, yield forecasts may appear to be intentionally smoothed simply due to the fact that forecasts become more accurate during the forecast cycle as more actual yield information is incorporated into the forecasts.
Four consecutive years of lower commodity prices has nearly exhausted the financial resources of U.S. grain farmers. Todd Gleason looks into the problem with an agricultural economist from the University of Illinois.
Farmers in the United States are about to harvest one of their best corn crops ever and prices are low. They may need to hang on to the crop for while if they want a better offer, and that could take a shift to soybeans next spring.
The United States Department of Agriculture judges this year’s corn crop to be a record breaker. If it all comes in as predicted in USDA’s September reports there will be none bigger, and the market believes it so far. The price of corn has dropped about a dollar a bushel since earlier in the summer. This price isn’t likely to change much thinks Darrel Good until some new information comes along in one of the USDA reports, and that might not be until next spring.
As long as we have that kind of carryover prospects, the market sees no reason to push prices higher to reduce consumption.
- Darrel Good
The big response he’ll be looking for is in U.S. acreage next spring, says Good. The agricultural economist suggests the price of corn now, when compared to the price of soybeans, should result in some acreage shift from corn to soybeans next years. This could result in some relief on the supply side of the corn market.
This shift, if it comes, would be from farmers responding to market signals. Right now the price of soybeans compared to corn suggest farmers in the United States should seriously consider changing up next year’s crop mix, planting more soybeans. As for marketing this year’s corn crop, well, Darrel Good says it’s a waiting game for corn, and may very well be directly related to the acreage response.
There is some carry in the market. It is not huge. Prices remain fairly low. You’d say storage is a better option for corn, but you’ll have to store it at least through the first of the year, maybe into the spring of the year, before you could anticipate much of a rebound in spot prices.
- Darrel Good
Darrel Good writes about the commodity markets each Monday. The articles are posted to the FarmDocDaily website.
The combined agriculture business will have its global Seeds & Traits and North American commercial headquarters in St. Louis, Missouri, its global Crop Protection and overall Crop Science headquarters in Monheim, Germany, and an important presence in Durham, North Carolina, as well as many other locations throughout the U.S. and around the world. The Digital Farming activities for the combined business will be based in San Francisco, California.
Advancing Together is the company website dedicated to explaining the deal. Bayer employs 116,800 people around the planet. Monsanto employs more than 20,000 of which about 12,000 are based in the United States.
When the merger is complete, scheduled for sometime in 2017, the combined company will be nearly balanced with approximately half of its assets in the agricultural sector and the other half in healthcare.
The acquisition is subject to customary closing conditions, including Monsanto shareholder approval of the merger agreement and receipt of required regulatory approvals. Closing is expected by the end of 2017.
Illinois Governor Bruce Rauner purchased the Grand Champion Steer at the Illinois State for a record setting $104,000.
Illinois State Fair Press Release
SPRINGFIELD, Ill. - "This is the showcase for Illinois agriculture... the Super Bowl for 4-H and FFA exhibitors" -Orion Samuelson
The Governor's Sale of Champion has always been the crown jewel of agricultural events at the Illinois State Fair, and this year was no exception. For the second year in a row, the sale was held in the Coliseum. This grand venue serves as the pinnacle forum for an ag exhibitor.
Capping the night off was the sale was the Grand Champion Steer owned by Lucas Wisnefski. Wisnefski's steer sold for a record $104,000 to Governor and Mrs. Bruce Rauner and Friends of Wisnefski. When asked about what advice he would give to future state fair exhibitor, Wisnefski said, "Keep your dreams. I had a dream to win the State Fair, and now my dream has come true." He credits his win to hard work and dedication. Wisnefski plans to use the prize money to further his education.
The money raised at Tuesday night's auction helps to support Illinois agriculture. The junior exhibitors who raised the champion animals receive 80 percent of the funds with the remaining 20 percent to be split equally between the Illinois 4-H Foundation and Illinois FFA.