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This week the drought in Argentina worsened. Our Commodity Week analysts believe the trade rallied enough to offer old and new crop soybean sales opportunities in the $10 cash range. This price is still well below what most think is the longterm mid-point for cash and futures. It tells a story. The world has a constant supply of soybeans that comes online every six months.
USDA made some projections for the coming growing season in the United States and it laid out a bleak picture of U.S. competitiveness on the global export market over time.
Don’t forget to buy your ticket for the All Day Ag Outlook. It is Tuesday, March 6, 2018. The markets are getting more interesting, and so are the agricultural politics. Each has a direct impact on your back pocket. The cost is just $30 and includes your morning coffee, roll, and Beef House lunch.
A dozen of our regular WILLAg analysts will be on hand to answer your questions, Eric Snodgrass will be there to take up the weather forecast, and we’ll discuss dicamba in an unfiltered way. It’s just about a week away, so don’t wait. Buy your tickets now.
Tax Reform May Have Already Fixed the RFS RINs Issue a conversation with ILLINOIS Ag Economist Scott Irwin
Next Tuesday President Trump will meet with Senators Grassley, Ernst, and Cruz to discuss how ethanol RINs are related to a refinery’s bankruptcy in Pennsylvania. Secretary of Agriculture Perdue and EPA Administrator Pruitt should be in the room, too. They’re hoping to work out a fix for the oil industry. However, as you’ll hear, the gap isn’t that big anymore and the Trump tax cut may solve the issue.
by Scott Irwin, University of Illinois
excerpt - Implications
The political battle over the RFS has centered on the high price of ethanol RIN credits that are used to comply with the RFS conventional ethanol mandate. Independent “merchant” refiners claim that large RINs costs have materially harmed their profitability. We show in this article that high D6 RINs prices can be directly traced to conventional ethanol mandates that exceed the E10 blend wall, creating a gap that has to be filled by biodiesel.
When biodiesel takes on the role of the “marginal gallon” for filling the conventional ethanol mandate, this forces the price of a D6 ethanol RINs to equal the much higher price of a D4 biodiesel RINs. This is essentially the story of the RFS and the resulting political battles since 2012. What has received little notice is how rapidly the conventional ethanol gap has shrunk since 2014 due to the combination of: (1) the crash in crude oil prices stimulating gasoline consumption, and (2) an improving economy. For example, the latest ethanol use estimate from the EIA for 2019 implies a conventional ethanol gap of a little less than 300 million gallons.
This gap is so small that an increase in projected ethanol use for 2019 of just two percent would erase the gap completely. This means it is not out of the realm of possibility for D6 RINs prices to fall back their pre–2013 level of just a few cents without making any changes to the RFS. In this sense, “fixing” the RFS is getting easier and easier.
All Day Ag Outlook
The annual WILLAg All Day Outlook is just a month away. Please plan to join us at the Beef House in Covington, Indiana Tuesday, March 6, 2018. Our line up is stellar this year. Check out the agenda below and buy your tickets today. The $30 price tag includes Beef House coffee and rolls in the morning and an always worth-the-wait lunch. Come met our analysts and bring your questions! We’ll open our doors at 8am central / 9am eastern time.
16501 Indiana 63
Covington, Indiana 47932
Agricultural Weather Outlook
* Eric Snodgrass, Meteorologist - Agrible, Inc.
Cash Grain Panel
* Aaron Curtis, MIDCO - Bloomington, Illinois * Todd Hubbs, University of Illinois * Brian Stark, The Andersons - Champaign, Illinois
* Chuck Shelby, Risk Management Commodities - Lafayette, Indiana
* Aaron Hager, Extension Weed Scientist - University of Illinois
* Ellen Dearden, AgReview - Morton, Illinois
* Bill Gentry, Risk Management Commodities - Lafayette, Indiana
* Pete Manhart, Bates Commodities - Normal, Illinois
* Bill Mayer, Strategic Farm Marketing - Champaign, Illinois
How Grain Marketing is Changing Block Trades, Variable Rate Storage, & the Tax Law
* Curt Strubhar, Advance Trading | Alliance Director Grain & Feed Association of Illinois
* Curt Kimmel, Bates Commodities - Normal, Illinois
* Wayne Nelson, L&M Commodities - New Market, Indiana
* Mike Zuzolo, Global Commodity Analytics & Consulting - Atchison, Kansas
* Dan Zwicker, Zwicker Consulting - Waco, Texas
A Conversation with Emerson Nafziger, Extension Agronomist
2017 was an unusual growing season in Illinois. Todd Gleason caught up with Extension Agronomist Emerson Nafziger to talk about it and what farmers should consider this spring.
The Soybean Yield Gap, 63 Bushels on the Table
A university research project across the Midwest is hoping to bump soybean yields dramatically. Todd Gleason has more on how farmers can turn what they’re doing now to raise soybeans into the data feed for the project.
Test Your Integrated Weed Management Knowledge!
by Aaron Hager
Test your knowledge of integrated weed management (IWM) with this short quiz. The quiz is anonymous, and the answers will be revealed at the end.
Effective long-term weed management requires integrating multiple effective techniques, as opposed to relying solely on one or two tactics. This is particularly true as troublesome herbicide-resistant weeds continue to develop and spread throughout the US. Diversifying weed management tactics, preventing the introduction of new weeds, and varying herbicide modes of action reduces the spread and establishment of resistant weeds.
This brief, anonymous, 20-question quiz will test your IWM chops and help us give due credit to how farmers are using IWM throughout the US. All answers are completely anonymous and optional.
The quiz was written by weed scientists from 14 universities with funding from the USDA Agricultural Research Service and is being distributed in states all over the US. Find more information on IWM and herbicide resistant weeds at www.integratedweedmanagement.org.
French President Confronted by Farmers Over Glyphosate Ban
While I’m note sure this is exactly the moment which Emmanuel Macron is passionately telling a farmer he must ban the use of glyphosate because of the health problems he believes it may cause (cancer), it clearly shows him engaging directly. The French President visited his nation’s largest agricultural show Saturday in south Paris.
Farmers there booed him.
They are concerned about a proposed glyphosate ban, increased investment in farm land by China, and trade talks between the EU and South America.
Frankfort, Kentucky - Todd and Claranne Gleason took the Buffalo Trace Hard Hat tour to learn how bourbon is made. Grains, mostly corn some rye and wheat, are ground and the alcohol distilled from the mash. After distillation, the mash is dried (distillers dried grains & solubles - DDGS). This is sold and fed to animals.
The alcohol is stored in white oak barrels which have been charred on the inside. Temperature changes in the warehouse cause the alcohol to move in and out of the wood giving the bourbon its amber color.
The longer it is warehoused the smoother the taste. There is, for example, a big difference in the taste of Buffalo Trace bourbon, aged 8 years, and its Eagle Rare brand, aged 10 years. The only difference in the two barrels of bourbon is the age, but not the ingredient mix or distillation process.
Barrels stored lower in the warehouse and towards the center produce higher quality bourbon. This is because the temperature swings are slower than on the outer edges of the warehouse
Erected by the Georgia Historical Society, the Georgia/Florida Soybean Association, and the Georgia Agricultural Commodity Commission for Soybeans
Marker Text: In 1764, Samuel Bowen, a former seaman employed by the East India Company, brought soybeans (Chinese vetch) to the Georgia colony from China via London. Not having land available to sow seeds, Bowen asked Henry Yonge, the Surveyor-General of Georgia, to plant what is believed to be the first North American soybean crop in the spring of 1765.
Yonge’s property, Orangedale, was located nearby on Skidaway Island. Bowen’s successful cultivation led to a 1769 patent for the production of soy sauce for exportation to England. Soybeans in Georgia were soon eclipsed by other crops, and not widely cultivated in North America until the late 19th century. But since the 1940s, soybeans have become one of the most widely grown and lucrative cash crops in the United States.
The following is a history of the soybean as recounted by University of Illinois emeritus plant geneticist Ted Hymowitz. Over the years videographer Steve Parker and I nicknamed him “The Wild Soybean Hunter”. Hymowitz scoured Asia and Australia for wild relatives of the soybean. He found them, and brought them back to the University of Illinois for inclusion in the USDA Soybean Germplasm Collection.
Today these wild soybeans are used in the University of Illinois soybean breeding program to capture favorable alleles for yield that were lost during domestication. College of Agricultural, Consumer and Environmental Sciences researchers are also mapping traits from wild soybean that were involved in domestication or that have significantly different phenotypes from soybean.
The first written record of the soybean dates to the 11th century BC. The plant originated in the wilds of modern day Laos, Cambodia and Viet Nam. From these points it spread first to China in the north says University of Illinois Plant Geneticist Ted Hymowitz. This is where Chinese farmers adapted glycine soja or the wild annual soybean for cultivation.
It was a small black seeded wild annual. The Chinese selected for just two traits. The wild glycine soja trails and climbs. The Chinese made it an upright plant. They also selected for larger seed size. Those two traits mark the only differences between the first domesticated soybean and its wild ancestor. It happened about 3000 years ago.
It wasn’t until the twentieth century that the next real evolution of the soybean occurred. With the mechanization of agricultural processors, farmers and soybean breeders quickly realized a third trait had to be added to the soybean. It shattered at maturity and this was bad. Farmers needed to be able to harvest soybeans without having them pop out of the pod before they could be put into a machine. The trait was found in a soybean called CNS for Clemson non-shattering and was incorporated into all commercially grown varieties of the crop says Hymowitz.
So, domestication of the soybean started about 3000 years ago. The first written record comes from the 11th century Before Christ. The bean is derived from a wild annual called glycine soja that looks a bit like a morning glory… it’s a viney plant that climbs and trails and produces small black seeds. It can still be found today. This plant was domesticated by Chinese farmers who made it stand-upright and increased the seed size. And then, in the twentieth century, U-S farmers added a third trait. They bred the soybean so it wouldn’t shatter at harvest.
It wasn’t until the 1960’s and 70’s that the soybean as a crop really began to take off in the United States. This is about 200 years after it first arrived in America. The journey here from China was a long one.
In 1758 Samuel Bowen signed on as sailor for the East India Company with a ship called the Pitt. He was an Englishman. The ship sailed to India, and then on to Hong Kong. From there, says Plant Geneticist Ted Hymowitz, Samuel Bowen signed off the Pitt and onto a ship called the Success. Hymowitz and a friend spent two years tracking Mr. Bowen’s movements by researching the University of Illinois library. The Success, says Hymowitz, sailed north from Hong Kong to Tein Sein, China. It was not supposed to be in these waters and was likely scuttled by the Chinese. Samuel Bowen was imprisoned for four years.
He was eventually released and made his way back to the American colonies, in this case to Savannah, Georgia. Bowen brought with him a bag of soybeans. It was 1764. Mr. Bowen was something of an entrepreneur. In 1767 he was issued a royal patent for soy-sauce. He’d acquired some property in Georgia, and was growing and pressing soybeans into soy-sauce on a farm he called Grenich. The sauce was grown for export to England. Bowen also pressed the soybean for oil.
Despite his death in 1777, Bowen managed to leave a legacy. The first recorded evidence of the soybean in the United States belongs to him. The minutes from a 1765 meeting of the Philadelphia Society for the Promotion of Agriculture acknowledges the receipt of 6 bottles of soy and seeds of Chinese vetch from Samuel Bowen. This is one story of how the soybean arrived in North America. There are others and Ted Hymowitz harbors one of them, but they cannot be proven.
So, it is a ship called the Success, Chinese imprisonment, and Samuel Bowen that are credited with the introduction of the soybean to North America in 1764. One-Hundred-Sixty-five years later two Americans set off for Asia to hunt down more types of soybean.
Just as the Great Depression was taking hold in the United States, the U-S government sent plant scientists to Japan, Korea, and northeast China on a mission. It was February 18, 1929, when Howard Dorsett of Carlinville, Illinois and Bill Morse a native of Lowville, New York set out from the states for east-Asia. The United States Department of Agriculture dispatched the two and their families on a mission to collect accessions, different types, of the soybean.
In the late 1920’s it was apparent the soybean was about to become a very important crop in the US. USDA wanted as many different versions of this Asian native as possible. Dorsett and Morse were both plant scientist. By April of 1929, they and their families had settled in Tokyo. Over the next two years the men…primarily Morse, because Dorsett fell ill with double pneumonia, collected exactly 4,451 different accessions of the soybean.
These were soybeans, says University of Illinois Plant Geneticist Ted Hymowitz, grown throughout east-Asian by native farmers. All but about 800 of the original accessions have been lost. In the 1930’s there was no germplasm repository, and Hymowitz says the seeds were probed, and if found useless, thrown away.
What happened with the collection in the 1950’s says Hymowitz was unexpected, yet predictable. He says when you collect a diverse set of materials, in this case lots of different types of soybeans, you do not know the value of the collection until something in it becomes useful.
In the 1950’s one of the accessions collected by Dorsett and Morse, a soybean called PI 88788 was found to be resistant to the soybean cyst nematode. The cyst nematode was and remains a major pest problem for U.S. farmers. The resistance found in PI 88788 is now incorporated, says Hymowitz, in 95% of the hybrids grown in the United States.
Hymowitz believes the material collected by Dorsett and Morse will become more valuable over time because it was collected before modern soybean varieties were developed. This is because we do not know what pathogens, diseases, may inflict the soybean in the future. It, therefore, is important to maintain the diversity of the remaining Dorsett and Morse accessions. Those accessions are housed at the University of Illinois in the Soybean Germplasm Collection.
There are just seven more trading days left in the crop insurance price setting month of February. As of Friday, February 16 the December corn futures contract trading at the CME Group in Chicago has averaged $3.95 for corn. This compares to last year’s February average of $3.96. The November soybean contract is currently averaging $10.09. Last year it was $10.19. The September Hard Red Spring wheat trading in Minneapolis is currently averaging $6.32. This is the biggest departure from 2017. It is about 70 cents a bushel above last year’s price of $5.65.
from USDA’s website | The Agricultural Outlook Forum (AOF), now in its 94th year, is the USDA’s largest annual meeting. This year’s Forum is titled The Roots of Prosperity. Along with the plenary panel discussion, attendees will choose from 30 sessions with more than 80 speakers and be able to visit a host of agriculture-related exhibits.
AOF is a platform facilitating conversation among those in the agricultural community, including producers, processors, policy-makers, government officials, and both foreign and domestic non-government organizations, on key agricultural issues and topics.
use this youtube portal to watch the 2018 Agricultural Outlook Live
USDA’s Risk Management Agency (RMA) will lead a panel discussion titled “Crop Insurance in the U.S. and Abroad” in the Agricultural Policies Here and Abroad track that will be held Friday, February 23, 2018, at 10 a.m. EST.
-Thomas Zacharias, President, National Crop Insurance Services
- Federal Crop Insurance Following the 2014 Farm Bill - Dr. Kent Lanclos, RMA
- Crop Insurance: A Producer Perspective - Chalmers Carr III, President & CEO, Titan Farms
- The International Market for Agricultural Insurance - Dr. Lysa Porth, Assistant Professor / Chair,
Ag Risk Management & Insurance, University of Minnesota