Market Confusion!

This week the soybean market is fulfilling one of Murphy’s Laws: “The market will do whatever is necessary to fool the majority.” According to a report by Agriculture.com, cash soybean bids broke above the $1.00 rally level on October 29. Strength at that time led many to believe there were large gains still ahead. Since then, action has leveled off, and prices have become much less volatile. Bets that prices could go straight up were tempered by two days, November 4 and November 19, when they broke below the dollar level. Both times there was a quick rebound back above that “magic“ level.

Scanning the charts of cash bids and March futures gives the impression that the high was on October 31 with the price of $9.69. However, the ability of the market to rebound every time the support level is broken makes me think that the bids could hold in this area or higher for a long time.

In addition to chart action that is somewhat bullish is the fact that basis has finally started to improve. I admit that the move is small and not consistent across all price levels. It is at least better than having the basis deteriorate as the record soybean crop finally comes to town. Hope that the end of the year will see much better basis and gradually improving cash bids.

Meanwhile, corn bids continue to plug along, pennies up and pennies down. The net result has been a gradually improving cash bid. That is better than having violent large moves up and down but not going anywhere. At least the price today is such that market analysts have stopped taking about cash corn prices below $3.00. With the size of the 2014 crop, it may take until spring for corn to be above production cost if indeed it ever gets there for most of us.

All cash bids quoted in this column are from Midwest Farmers Co-op in southeast Nebraska.

The Crops and the Bees

Delta Farm Press reported on the EPA release was news to farmers who have been producing significantly higher soybean yields in the Mid-South.

“EPA finds neonicotinoid seed treatments of little or no benefit to U.S. soybean production,” the EPA’s Office of Chemical Safety and Pollution Prevention said in the release. “There is no increase in soybean yield using most neonicotinoid seed treatments compared to no pest control at all.”

The study, which comes as EPA is under pressure from environmental activist groups to withdraw the registrations of neonicotinoid insecticides because they claim they are a threat to bees, caused quite a bit of consternation in the farm chemical industry.

“On the 15^th of October, we got an October surprise from EPA when they issued this very cursory report saying they had done a benefits analysis and found there are little to no benefits for the use of seed treatments of neonicotinoids on soybeans,” said Jay Vroom, CEO of CropLife America, the organization representing  crop protection chemical manufacturers.

“That is a great reminder to me that part of the truth is way more harmful and damaging than an outright lie, and, unfortunately, our friends at EPA know that a lot better than we do.”

Vroom, speaking at the Southern Crop Production Association annual meeting in New Orleans, said the industry was determined not to let the claims go unchallenged and began responding almost immediately after the EPA press release hit the streets.

“Fortunately, the neonicotinoid registrants already have massive benefits analysis underway. That was being used that Wednesday afternoon just hours after we met with EPA Administrator Gina McCarthy and the team from the Office of Pesticides, and we voiced our frustrations and dismay that they kept this analysis of benefits a state secret and blindsided us with it.”

“I think we’re on top of this now, and in my subsequent conversations with EPA leadership, I’m beginning to hear that they may be thinking about doing a little bit more course correction on some of the follow-on label change actions that they were contemplating at EPA,” Vroom said.

Most Americans have only a cursory knowledge of honeybees, he noted. Some may have heard of the threat the Varroa mite poses to bees, but they have no idea what the mite is or what it does to pollinators.

Vroom displayed a photo taken at the Bayer CropScience Bee Center in Research Triangle Park in North Carolina. Center personnel use a visual that is about the size of a sofa pillow to show visitors the impact one Varroa mite can have on a honey bee.

The primary weapon for combatting the Varroa mite is a miticide or a pesticide that will eliminate the pest without endangering the honeybee.

“It’s a great reminder in a visual way to those who have concerns about the health of pollinators that there are a lot of factors associated with pollinator health that go well beyond inadvertent exposure to pesticides that may diminish honey bee health,” he noted.

“And, in fact, the answer to the mite problem is miticides, which are pesticides. That’s an eye opener for a lot of folks in the public that don’t know anything about these issues.”

The bee health issue has now gone all the way to the top, he said, with President Obama creating a federal government pollinator task force last June. He made USDA and EPA the co-chairs of the task force.”

“We were pleased with that and commended the president for that move,” said Vroom. “But we’ve been disappointed that USDA has not kept pace with the leadership from EPA around driving the bus on the pollinator task force for the president."        `

Since the EPA's release, the neonicotinoid registrants - Bayer CropScience, Syngenta and Valent USA Corp. - have issued a number of reports about the efficacy and benefits of the compounds in seed treatments on a number of crops, including soybeans. To see those reports, visit www.GrowingMatters.org.

Fertilizer Prices & The 4 R's of Nutrient Application

I hope harvest has been going smoothly for you, though delayed for most in Ohio this fall. This week Agriculture.com has some information that is important as we think about fall and spring input prices.

Fertilizer prices are higher this fall compared to a year ago on seven of the eight common forms.

Some farmers anticipate prices softening between now and spring so they are holding off on purchasing fertilizer inputs. This may or may not hold true as retailers say that the high cost of freight and rail will keep fertilizer prices locked in. Retailers are seeing less fertilizer sales today compared to a year ago.

Fertilizer accounts for over 40 percent of your variable input costs for corn and about 25 percent of your soybean variable input costs. The way this input is managed can have a large effect on your bottom line - yield and cost.
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Remember the four “R”s of nutrient application: the right source, and at the right rate, in the right place, at the right time.

Fall Nitrogen Application Tips

Efficient nitrogen (N) applications can translate into a better bottom line. Here are five tips Agriculture.com came up with to help you efficiently manage your fall N applications.

1. Watch the temperature.“Our guideline is, when it hits 50°F. between 6 a.m. and 8 a.m. at the 4-inch depth, it’s time to apply,” says Dave Franzen, North Dakota State University Extension soil specialist. 

Applying anhydrous ammonia before soil temperatures reach 50°F. can lead to ammonium conversion to nitrite, says John Sawyer, Iowa State University Extension soil fertility specialist. He recommends spring N applications and sidedressing instead of fall applications to avoid loss.

2. Consider the soil type.“Soils that have a greater chance for N loss would be less preferred for fall applications,” says Sawyer. Also, avoid applying N in the fall on historically wet fields.

3. Plan split applications.
Franzen recommends applying half of the total N rate in the fall or preplant, and then the other half when the corn reaches V5 to V8.


“That way, if it does become really wet in May and early June, you only have half of your N at risk,” Franzen explains.

4. Use the correct form.
Only certain types of N fertilizer should be fall applied. For fall applications in Iowa, Sawyer only recommends anhydrous ammonia. All other forms should be spring-applied he says. 


“Some states don’t recommend putting on urea at all, but we haven’t found that to be an issue,” says Franzen. However, he doesn’t recommend UAN for fall applications.

5. Follow the guidelines. Franzen recommends checking state guidelines before making N applications. State guidelines will give combinations recommendations for fall N applications, he says.

11 Ways to Cut Grain Drying

Recently Agriculture.com looked at the best ways to cut into grain drying.  Here is what they came up with.

Drying grain can be one of the most energy-intensive operations on the farm. When you burn fuel to produce that energy, you also burn money. 

There isn’t an easy solution to cut costs. “No two farms are the same,” says Gary Woodruff, GSI. “There isn’t one best way to dry grain.” 

This list will help you identify energy-saving tips for the size of your operation and your grain-drying infrastructure.

1 Run in all-heat mode
“One thing that’s been around for a long time but is still cost effective is running a portable dryer in the all-heat mode,” says Woodruff. 

In all-heat mode, you heat the grain in the dryer and cool it in the bin. “The advantage is you can come out of the dryer at a higher moisture content, and then you lose one, two, or three points of moisture in the cooling process,” explains Kerry Hartwig, Sukup Manufacturing Co. “Drying those last points takes the most energy.”

That can save you 20% to 30% of your operating costs, says Woodruff. Running in all-heat mode also increases your efficiency, because grain flows through the dryer more quickly. Plus, you end up with better quality grain, because cooling grain rapidly can increase stress cracks on corn kernels. 

There are limitations to running in all-heat mode. This drying system won’t work on most bins larger than 50,000 bushels. That’s because you need to run between 1∕3 and ½ cfm of air through each bushel when the bin is full. For bins 50,000 bushels or smaller, you will need to have larger aeration fans and increase the number of roof vents. It will also require more management. 

“There are better drying systems on the market that don’t require the extra management that all-heat mode requires,” says Woodruff, “but this is one of the least expensive ways to improve how you process grain on your farm.”

2 Buy an all-heat dryer 
If your present dryer can’t run in all-heat mode, consider upgrading. “A new all-heat dryer gives the most capacity, efficiency, and quality for the dollar, even with the bin aeration upgrades required,” says Woodruff.

3 Upgrade to vacuum cooling or heat recovery
“For larger operations, it will be more efficient for grain to come out of the dryer cool,” says Hartwig. “That’s where vacuum cooling or heat recovery can make a big difference.”

In vacuum cooling, heat that is given off by the cooling grain is cycled back into the drying process. By doing this, less fuel is required to raise the drying air temperature.
Vacuum cooling is offered on tower dryers, centrifugal dryers, and centrifugal stack dryers. 

“With vacuum cooling, you can dry grain with even better efficiency than you can with all-heat drying,” says Woodruff. “You will spend more money up front, and you’re going to need a pretty good size grain dryer to get that newer technology.”

4 Dry grain evenly
“If a dryer dries grain faster in some areas and slower in others, the dryer will overdry grain to make up for the underdried grain,” says Hartwig. “This adds drying cost in extra fuel used and lower grain test weights from overdrying.”

There are different systems available to help you dry grain more evenly. Sukup’s single-module and stacked dryers use a quad-metering roll system that pulls dryer grain near the inside of the grain column out of the dryer faster, while leaving wetter grain near the outside of the column in the dryer longer. Stacked dryers also use a grain cross-over system that takes grain from one side of the dryer on the top module to the other side of the dryer on the bottom module. This inverts the grain for more even drying. Sukup tower dryers use a grain exchanger system halfway down the heat chamber.

Another option is to use a system like GSI’s grain inverters. The inverters move all grain, except the outer 2 inches within the column, to eliminate overdried grain and to maximize drying efficiency. The inverters redirect the warmest grain from the inside of the column next to the wettest grain at the outside of the column. The wet grain is dried by the captured heat, which recovers up to 15% of the heat that would have been lost.

5 Run at a higher plenum temperature
“One thing you might not be aware of is that the higher you run your plenum temperature, the more efficiently you dry grain,” says Woodruff. “At the end of the season, farmers will say they are only removing three to four moisture points, so they lowered their plenum temperature to save some fuel. Exactly the opposite happens.”

Running at a higher temperature reduces the drying time and, therefore, saves you fuel. However, higher temperatures can potentially do more damage, so you need to find a good balance. “Each dryer’s airflow and column management is different, so you have to balance efficiency with quality,” says Woodruff. “There will be a maximum best temperature for each type of dryer.”

6 Do preseason maintenance
Before you start drying grain, make sure there are no obstructions in the columns and that the burner is ready to go. During harvest, empty, clean, and restart the dryer once a week to make sure the dryer is performing optimally. 

“Like any other piece of equipment, if you don’t take the time to clean it and keep it in operating mode, you are probably going to reduce your efficiency,” says Woodruff.

7 Avoid overdrying
Grain needs to be dried to a safe moisture level so it can be stored. This can range from 13% to 15%, depending on how long you will store the grain. However, you want to avoid overdrying. Grain takes more energy per point of moisture removed. So drying beyond the desired moisture level will eat up extra energy.

8 Use a remote monitoring system
One way to keep from overdrying is to use a remote monitoring system. These systems differ for each manufacturer, but most will allow you to monitor all dryer controls just like you would at the dryer from a smartphone, tablet, or other device. 

“Farmers want to be able to monitor their dryers in the combine, at home, wherever they are,” says Hartwig. 

With some systems, like Sukup’s remote monitoring and GSI’s WatchDog, you can also make adjustments remotely. 

“The only thing you can’t do is start the dryer without being there, because that would be dangerous,” says Woodruff. “You can adjust things like the plenum temperature, moisture control setting, and unload limits.”

Beyond avoiding over-drying, remote controls will also ensure that the dryer is running efficiently and hasn’t stopped for some reason. 

“The average dryer puts 2,500 bushels through an hour,” says Woodruff. “In 10 hours, that’s 25,000 bushels. If your dryer isn’t running for that long, that can make a huge difference.”

9 Manage dryability for different hybrids
“There is a lot of variation in the way different corn varieties dry,” says Hartwig. “Even with the same hybrid, there can be drying differences in different years.”

Woodruff says this has become more of an issue in the past five years. His recommendation is to closely monitor your dryer when you change fields or when you’ve changed varieties to make sure the dryer is running where you think it should be.

10 Check moisture controls
To make sure your dryer is running properly, pull samples, check the moisture control, and make sure the dryer is where it is supposed to be. 

“Moisture sensors are temperamental. It only takes one little stock of grain hanging up in the wrong place to throw their values off,” says Hartwig. “You should pull samples two to three times a day.”

11 Get an energy audit
“Sometimes you need someone who is willing to look at your entire operation to make sure that you are operating in the best way you can for your system,” says Woodruff. 

One way to do this is to get an energy audit. Your local NRCS office should have a list of businesses that conduct professional energy audits. 

A USDA REAP grant is available to help you upgrade your system if you can increase your efficiency by 25%.

“If you pursue a grant, work with a grant writer,” advises Woodruff. Learn more about the grant at Rurdev.usda.gov/energy.