Weekly Grain Update – September 25, 2017


Harvest is starting to ramp up in many areas of the Corn Belt as the unseasonably warm temperatures push the crop into maturing several weeks earlier than originally anticipated.  Local yields on beans seem to be decent, but many farmers are complaining that although the beans are dry, the stems are still alive and hard to cut.  On Saturday at Readfield, we dumped approximately 20 loads of new beans and almost all of them were under 13.5% moisture.  Most of these beans are coming from the southern areas.  It is truly shocking how the beans dried down so quickly when just 2 weeks ago we thought nothing would ever dry down.  Heat will do this.  In fact yesterday was the hottest day of the entire summer in this area, and it is the last week of September!  Who would have ever guessed.

We witnessed an unusually strong grain market on Friday.  Corn closed up 3 and beans closed up 14 cents.  This type of market activity normally does not happen during harvest.  After consolidating around $3.50, Dec corn futures broke up through its upper channel line of resistance that it had been respecting for weeks.  This bullishness caused some of the funds to start to cover their short positions, and the market ran higher after many protective buy stops were triggered.  This is the first sign of corn bullishness that we have seen in months.  This strength is from a technical perspective and not from a fundamental perspective.  The corn fundamentals are still quite weak.  Argentina still has the cheapest corn in the world by far, and we have no outside country buying corn at any significant volume.  We did start to see some slight farmer selling of corn on storage, but most farmers continue to sell their beans for cash flow and store their corn.  Time will tell if this is the start of a reversal process in corn.  However, please keep in mind that we have just barely started corn harvest in the corn belt.  When this happens in about 2 weeks, there will be some selling pressure which will likely put pressure on futures and basis.

The bean market took the lead from corn and continued its upward move as well.  It is interesting to note that if one looks at the Nov bean futures chart, it made a high on July 11th at $10.47 and made a new low on Aug 16th at $9.21.  Now, please keep in mind that it is quite normal for the markets to retrace 50% to 61.8% of a move before resuming the previous trend.  The market move lower during this period by the total of $1.26.  The normal retracement window is 50 to 61.8% of this move or 63 to 78 cents above the low of $9.21 before it turns around and again moves lower.  This represents the Nov futures window of $9.84 to $9.99.  On Friday, Nov beans closed at $9.85 ¼ or exactly a 50% retracement.  Isn’t it interesting how a normal barrier of resistance like $10.00 almost exactly matches the 61.8% retracement level of $9.99?  This is not by coincidence.  There are many traders at Chicago who are looking at the very same thing.  If you still have beans left to sell for harvest delivery, my best quest is that Nov beans will make a high between $985 and $10.00 before turning around and moving lower, and possibly significantly lower through harvest.  Please take advantage of this opportunity before it slips away.

As you deliver your grain into our CHS Larsen Co-op elevators this fall, please communicate with your drivers on what you wish to do with your grain when delivering.  At the elevator, the scale operator will need to know if you want to sell your grain, place it on an existing contract, place it in Delayed Price or Open Storage, or into Grain Bank if you are using it for feed.  It is critical that we know what to do with your grain BEFORE the truck leaves the elevator.  This will help to make sure there are no delays in processing your grain deliveries.  Unfortunately, if your truck leaves without telling us what to do with your grain, we will be forced to place your grain into Delayed Price and title will be lost.  Please avoid this mistake by communicating with your drivers or simply calling our office so we do not make a mistake on processing your grain shipments.  We greatly appreciate your help in this matter.

As always, if I can help you with anything, please call me in Readfield.


Phosphate industry expects minor impact from Irma

Loading phosphate at distribution center
There was a small uptick in phosphate sales ahead of Hurricane Irma’s arrival in Florida, where the bulk of North American phosphate production is located. Phosphate facilities there shut down as part of their hurricane preparedness plans.

Early reports from manufacturers are that damage at the facilities appears to be limited, but full assessment will take time. Some finished product has sustained water damage but no exact estimates have been released yet.

A major manufacturer expects to be able to resume production fairly soon, but says its third quarter production volumes could be impacted by the storm disruptions. It had stopped making price offers to either domestic or international customers until late Thursday, Sept. 14. The market has reacted and prices moved up significantly late last week.

Several import vessels of phosphates are arriving in the Gulf this month, including one vessel with CHS cargo, which arrived and was unloaded in between hurricanes. Most of that product is now making its way up the river system.

Staff at CHS terminals are busy filling orders and working with accounts to get product in position before the busy harvest season gets underway across the Cornbelt. CHS is working hard to make sure producers are being kept informed of any supply changes or concerns that might arise from the recent storm damage to production facilities or transportation infrastructure.

Weekly Grain Update- September 19, 2017


Last week, the big news was the USDA’s September Crop Report, where they pegged the corn yield at 169.9 bpa and beans at 49.9 bpa.  These are huge numbers, and many market participants were surprised by the continued increases in yield.  Many traders want a confirmation that these big yields are actually in the field before they take positions.  As harvest starts in the southern areas, the Delta region is seeing some very good yields on beans.  Even though they are experiencing some damage of 3-5% due to the hurricane rains, generally yields are very good.  As harvest starts to ramp up in many other areas, I get the sense that the yields are mostly there, and they are starting to confirm the big numbers from the USDA.

We are seeing the funds cover their bean short position, and this is supporting the bean market.  There are many index funds who want something to trade.  Corn and wheat are uneventful, and beans are the commodity that might have life.  We have seen the funds be rather aggressive in covering their short in the recent days, and this is one reason we bounced significantly off the lows prior to the close after the USDA report last Tuesday.  Beans seem to be supported compared to corn and wheat.  The market is also seeing the Chinese being rather aggressive in buying our beans for October out of the Gulf.  If they continue to buy our new crop beans, this will add another layer of support to the bean market.  From a cash perspective, the farmer is selling his beans for cash flow, and storing his corn in any crevice he can find.  He hates the cash price for corn, and will only sell if forced to do so.  If this trend continues, we will likely see the basis firm as harvest progresses.  The lack of farmer selling will cause the commercial to also hesitate to sell company owned corn because he also does not own much corn.  All of this will likely cause the corn basis to firm rather quickly after harvest.

Locally, we saw our first load of new beans be delivered into Readfield yesterday.  They were cut on Saturday, and had a moisture 11.9%.  We were all surprised by the moisture level, and many other bean fields are turning rather quickly.  Last week’s heat really helped mature the crop in this area, and likely pushed harvest forward in many fields.  We definitely needed the heat from last week to help progress the crop forward.

As you deliver your grain into our CHS Larsen Co-op elevators this fall, please communicate with your drivers on what you wish to do with your grain when delivering.  At the elevator, the scale operator will need to know if you want to sell your grain, place it on an existing contract, place it in Delayed Price or Open Storage, or into Grain Bank if you are using it for feed.  It is critical that we know what to do with your grain BEFORE the truck leaves the elevator.  This will help to make sure there are no delays in processing your grain deliveries.  Unfortunately, if your truck leaves without telling us what to do with your grain, we will be forced to place your grain into Delayed Price and title will be lost.  Please avoid this mistake by communicating with your divers or simply calling our office so we do not make a mistake on processing your grain shipments.  We greatly appreciate your help in this matter.

As always, if I can help you with anything, please call me at Readfield.


September 17 USDA Comments

On Tuesday, September 12, the USDA released its September Crop Report and shocked the market with its findings.  The USDA pegged the corn yield at 169.9 bu / ac with a production total of 14.184 Billion bu.  They pegged the bean yield at 49.9 bu / ac with a production of 4.431 Billion bu.  Most traders thought the government would lower yields from last month, but this was not the case.  Looking at ending stocks, using these numbers put the 16/17 corn ending stocks at 2.35 Billion bu and the 17/18 stocks at 2.335 Billion bushels.  Any number over 2 Billion is considered bearish and will usually cause futures and spreads to act quite weak.

On beans, the government pegged the 16/17 ending stocks at 345 Million bushels and the 17/18 stocks at 475 Million bushels.  The bean ending stock number for this year is not excessively bearish, and this is what the market could be looking at today.  The markets reacted significantly weaker after the report yesterday, but fund buying at the close supported futures significantly off their lows.  Today, we witnessed the firmer tone in beans as well.  The Chinese are looking to buy more Oct beans out of the gulf and their buying could be significant.  This is helping to firm the bean basis locally and is providing support to the futures market.  However, the corn market is struggling, and the bushels are stacking up.  We do not have a corn export program of any size, and this is allowing corn futures and the basis at the gulf to remain much weaker than normal.

By Marcus Cordonnier, Grain Manager

Grease is Grease….Right?


When looking at grease, most would think that all greases are the same; and as long as I am greasing my equipment regularly, no matter the name brand or type of grease…I am ok!
Here is the first question I would ask you, “why are you choosing the grease you are using now?”

Brand loyalty: My father used it, my grandfather used it my great-grandfather used it and I use it.

Grease Color:  The red grease is the best!

Price: I grease every day, I’m not gonna buy that “expensive” stuff, and waste money.

Accessibility: I buy my grease at the gas station, I’m there filling my truck up anyway.

Friendships: I buy my grease from Jim, he is my neighbor, we’ve been friends for years…and his sister is real pretty!

All of these reasons may seem legitimate, but have you ever stopped and wondered if there isn’t more to choosing a grease than the above mentioned? Think about this for a second – are you using the correct grease for the application?  I wouldn’t think that a multipurpose grease created for small engines and passenger vehicles would be the grease you would want to use in a backhoe or a pay loader.  That would be like putting 87 grade gasoline in Dale Jr’s Race car.  Doesn’t make any sense.  Yes, I agree that the multipurpose grease is easily accessible and most likely more economical than a higher grade grease.  But by using the incorrect grease in your equipment, you are greasing more often than necessary, when lubricating twice as much as needed, I can’t imagine you would be saving a whole lot of money.  The extreme heat and pressure given off by backhoe’s and pay loaders are creating way to much friction for this grease to handle and it will ultimately fail- leaving you with no lubrication to protect your equipment and potential for breakdown.

Guess what, not all red grease is created equally either.  Every brand has their own “red” grease & not all are for the same application, most have different base greases.  Base grease is very important, it is like the flour that holds a cookie batter together.  With just eggs, butter and sugar your cookie would be a mud pie looking mess, but add that flour and now you have a cookie with some consistency.  Base greases are the same- you need all the other components to the grease, like misc. oils & additives, but without the base to thicken it, you would have nothing more than car engine oil. It would make it kind of tough to lube up a bearing with that!  As important as Base grease is, please understand that not all bases are compatible with each other.  For instance, if you are currently using a lithium based grease, you would not want to add a calcium complex based grease on top of this.  They would break down almost immediately and run off.  If you find that you would like to change to a grease more suited for your application, but contains an incompatible base; simply flush out your system prior to your first greasing.

We offer many different types of greases for all your needs. To learn more about what lubricants we carry click here. If you would like to discuss your current needs, please contact our energy team and we will be happy to stop by and help you choose a lubricant that is right for you.  By the way, I have a pretty sister too!

By Kim Leisner, Energy Sales Manager 

Weekly Grain Update- September 12, 2017



The big news this week is the monthly USDA grain report to be released on Tuesday at 11 a.m.  There are definitely areas of the corn belt where the crop is less than stellar, but the over-all size and quality of this crop is pretty good.  I am hearing reports today of damaged beans coming out of the southern delta region due to the massive rains from the hurricane over a week ago in Texas and western Louisiana.  This rain is causing problems with quality on a ripe crop.  Still, yield reports from these southern areas seem to be quite good.  The market is expecting a 166-168 bpa yield on corn and a 48-49 bpa yield on beans.  Any significant variance from this and the market could react explosively.  I have seen enough of these report days and anything is possible.  I encourage all of you to have your targets already in place resting at Chicago in case we do see something bullish hit the floor today.  If this happens, you all can take advantage of a pop.

We did witness a nice bean rally last week.  The cool weather has the market concerned about the lack of maturity in many areas.  The dry areas in Ohio and Indiana are also raising concerns.  The funds were short beans early last week, but these uncertainties caused them to cover the majority of their short positions in beans.  So most of us had the opportunity to sell $9.00 fall beans again if you needed to make some “catch up” sales.  We witnessed strength Monday through Thursday in beans, and then the managed money crowd decided to take their profits to the bank and sold it back again before the close on Friday, sending beans solidly lower on Friday at the close.

Corn and wheat are acting like “sticks in the mud” while beans moved higher last week.  Beans would rally, but corn and wheat could not do a thing.  Folks, we have a solid export program in beans at the Gulf this year.  Our beans continue to be the cheapest beans in the world.  China is expected to continue to buy more and more beans as harvest progresses.  However, our corn export program is woefully inadequate, and the corn will start to stack up soon.  South American corn is the world’s cheapest bushels, and world buyers of corn are bypassing the US.  Corn basis levels at the Gulf remain weak, and this is weighing on the entire corn market.  What is concerning is that we are not to gut slot harvest yet, and there are already concerns about the back log of corn barges.  This corn market could get really interesting in about 30 days.  Time will tell.

As I look at the charts last night, I still see clear resistance on the Dec ’17 corn futures chart at $370.  Any rally attempt to this level needs to be sold.  On beans, it is interesting to see that Nov ’17 bean futures rallied to the exact 50% retracement level of the entire $1.26 slide from July 11th  through Aug 16th.  The high point during this move is $977 ½ and that is now our resistance point.  Any rally attempt to get us back to this level should be sold.

If I can help you in any way, please call me at the Readfield office.



Justifying Variable Rate Cost

Variable Rate


On my drive to work this morning the temperature was 47 degrees, and I noticed more and more of the leaves on beans and of corn are beginning to mature, fall is coming fast. And as fall comes fast, so too does fall spreading of fertilizer and soil sampling. Variable rate spreading of fertilizer is one of the biggest misconceptions that I find growers have.

Many people believe that Variable rate spreading is way more expensive, calls for a lot more fertilizer, and has to be done forever once started. All of these misconception can be true, but all of them usually deem false to most growers. In an example today I will walk you through a 40 acre piece of land. Soil type is a loamy sand, and rotation is two years of corn followed by one year of soybeans. Tillage is done after the first year of corn. Otherwise it is run as no till. After sampling on 2.5 acre grids (to produce good data for variable rate spreading) we found potassium levels to vary from 38 – 118 ppm, with an average of 63 ppm. This large variance in levels is not uncommon in Wisconsin fields. For this particular field the grower shoots for 200 bushel on the first year of corn. This being said a flat rate recommendation would be for 200 lbs of Potash. Using flat rate spreading, the field would cost the grower $1,310. With the increase in cost for variable rate application and a 200 bushel yield goal, the cost for the field is $1,271, this decrease in cost can help justify the cost of sampling the field and still provides the needed fertilizer for all the plants in the field. The application prescription varies from 121 lbs- 219 lbs of product with an average amount of 177 lbs. This use of variable rate spreading will be utilized until the levels of potassium in the field reach an equilibrium allowing us to return to flat rate spreading.

As we move closer to fall harvest keep this bit of information in mind, and if you may be interested in variable rate spreading and soil sampling feel free to contact your local agronomist or YieldPoint Specialist. If you would like to receive more information on this price comparison and the data behind it, feel free to contact me.

By: Alex Yost, YieldPoint Program Specialist

Good management practices increase silage safety

Silage Facing Safety

On a farm, even a simple task can turn into danger in an instant. There are many “simple” tasks during annual silage production and harvest that are so familiar we can become distracted and lose the focus required to ensure safety.

“In the farming community, every year we hear stories of on-farm accidents while working around silage that affect both workers and bystanders, regardless of their age and experience,” notes Bob Charley, Ph.D., Forage Products Management, Lallemand Animal Nutrition.

However, these tragic accidents can be prevented with strict adherence to good silage management and silage safety resources.

“It is unfortunate that many people are not aware there is a danger but, in reality, there is,” says Dr. Charley. “Given the right resources and awareness of the issues, potential risks and fatalities can be understood and avoided.”

One area of silage safety issues that is often overlooked is face management. Improper face management is one of the biggest contributors to silage avalanches or cave-offs. Proper management of the face on a daily basis is crucial to safety. Plus, these practices benefit the quality and consistency of the feed, so there is no reason not to adopt them. With the right tools and resources, injury and death can be prevented by:

  • Practicing caution around silage. This includes keeping a safe distance from the face and inspecting surroundings cautiously.
  • Executing proper feedout. Never dig the bucket into the bottom of the pile: this can create an overhang that could lead to a potential silage avalanche. Additionally, never drive the unloader parallel to, and in close proximity of, the feedout face in an over-filled bunker or pile.
  • Use caution when removing plastic, tires, tire sidewalls or gravel bags. When working in, around or on a pile, always wear a harness connected to a safety line and bring a buddy to watch out for you.

“At Lallemand Animal Nutrition, safety is a priority, especially when working around silage,” Dr. Charley says. “People are the greatest resource in any operation, and ensuring the safety of farm employees and visitors is the highest priority. For this reason, we have created a silage safety kit to help provide the best materials for silage safety.”

The information and resource kit was developed in conjunction with leading silage safety experts, Keith Bolsen, Ph.D., Professor Emeritus, Kansas State University and Ruthie Bolsen. The kit includes:

  • Silage Safety Handbook, which offers practical tips for building, maintaining and feeding out silage bunkers and piles safely
  • Quick-reference poster, which demonstrates the main principles for silage safety
  • Safety vests to improve staff visibility when working in, at or near silage storage facilities
  • Warning sign to be placed strategically to raise awareness of visitors and staff
  • Basics of Silage Safety video — a quick video resource that reiterates the importance of safe practices, which is also hosted on the Lallemand Animal Nutrition YouTube channel

Producers can request these free resources by contacting their Lallemand Animal Nutrition representative or by visiting http://QualitySilage.com/.

“We want to ensure all livestock producers practice silage safety. By offering these free resources, people have the opportunity to improve their safety practices — and even their silage quality,” Dr. Charley states. “These resources demonstrate Lallemand’s commitment to continually support producers and partners, safely and productively.”

Original Source: www.lallemandanimalnutrition.com

Weekly Grain Update- September 5, 2017


We all witnessed a nice rally on Thursday due to fund short covering on the last day of the month.  Managed money had accumulated a short position in corn, beans, and wheat, and in order for these firms to realize their gains during the month, many decided to cover some of their short positions, and take their profits to the bank.  Many had their fiscal year end closing Thursday night, and this rally was due to managed money buying back their short positions so profits could be realized during the month of August.  I hope that everyone who needed to liquidate corn, either on storage or selling for new crop, took advantage of this short lived opportunity.  Again, these opportunities will be few and far between in the coming weeks and months ahead.  These are opportunities to get caught up with needed sales, and not to get overly bullish.

Hurricane Harvey did a big number in South Texas with massive flooding and huge amounts of water everywhere.  Fortunately, the devastation is mostly in South Texas and Western Louisiana.  These flooded areas will affect the energy market in the coming days and weeks.  However, the grain industry can breathe a sigh of relief that our main grain shipping channel, the Mississippi River and the Gulf ports in Southern Louisiana, were not harmed in a big way.  That scenario could have been very serious for our industry.  Harvey is all but gone now, and some areas did receive some much needed rain.  However, parts of Indiana and Ohio are now quite dry and Harvey did not bring much moisture to the area at all.  Crop ratings will be out Tuesday at 4 p.m. and will likely show some deterioration in crop quality in the Eastern Corn Belt.  However true, some of this is already factored into the market at this time.  It is quite normal for condition ratings to fall during the end of the growing season, so this is not a huge surprise.

It will be interesting to see what the funds do on Tuesday.  Will they continue to short this market like they have been?  Most likely they will.  If this is the case, the bigger the short they put on, the bigger the potential rally we will have when they decide to cover.  All it takes is for one or two firms to get spooked, or decide to head for the exit, and the herd will follow.  If this does not develop, we could very likely see another rally at the end of September for the very same reasons as listed above.  We also have another monthly grain report on September 12, at 11 a.m.  If the USDA decides to throw us a curve ball, we could see some fireworks on that day as well.

How can you take advantage of these short bursts of market activity?  By using target orders.  Give us a firm order to sell a specified amount of grain at a price above the market, and we will watch it for you and place orders at Chicago to price your grain if the market suddenly pops up.  These work extremely well, and it allows you to take advantage of opportunities that sometimes are very short lived.

As I look at the charts tonight, I see clear resistance on Dec ’17 corn futures at $367.  On Friday, we closed at $355 ¼.  If we can get back to the $367 area, and if you need to move corn for this fall, I would seriously consider selling what you need to move.  On beans, I see a clear resistance level on the Nov ’17 bean futures chart at $955 followed by $963.  On Friday, we closed at $949 ½.  Again, if we can continue to see strength in beans and get to these levels, I would seriously consider selling what needs to be moved at harvest.  I hear many farmers saying they will sell their beans for cash flow this harvest, but store their corn.  I have heard this many times already this year.  The point is that if we do have a rally, we are likely to see many farmers take advantage of it, and their selling could smother the fire.  Something to keep in mind.

If I can help you in any way, please call the Readfield office.


2017-2018 Propane Supply

Propane Supply


As a salesman for the energy team at CHS Larsen Cooperative, I have always worked under the concept that our customers should contract or lock in their fuel to secure a price for the season…whether that season be corn drying or winter heating; price was always the driving factor behind contracting propane.

What Has Happen

Over the past two decades I have seen my share of volatility and I had never witnessed any other reason to secure your propane aside from price….until  a few years ago.  Please, think back to the winter of 2016/2017 and remember one of the coldest winters on record in Northeast Wisconsin. Below zero for days, then weeks, the cold weather would just not let up- at this point, folks are becoming concerned about the cost of heating their homes; not realizing that our main source of heating homes in rural areas was quickly becoming nonexistent.  By the end of January 2014, Northeast Wisconsin residents were quickly becoming more concerned with how they would heat their home, not so much on what the cost would be to heat.  You might ask yourself, how could this happen?  We have winter every year in Wisconsin, we have always had enough LP to heat our homes in the past…how and why does this happen?

The winter of 2014 did not create this problem, it was just a contributing factor!  This disaster started in the Spring of 2013; where we saw a cold, wet planting season.  A cool growing season did not help either. Then we get to fall harvest and we have corn coming off the fields as high as 32% moisture.  This brought one of the biggest drying seasons the Midwest has ever seen.  During this entire time, China started putting obscene values on propane; which led to the US exporting record amounts of propane.  Going into winter, we saw some of the lowest inventories ever recorded.  Then the cold started….and wouldn’t let up.  We ran out of our winter supply real quick.

Were we not prepared for a super cold winter?  Maybe not, but that was just one factor that contributed to this disaster.  After all of the media coverage related to this shortage, Governor Walker declared a state of emergency and horrific stories of the elderly looking at the possibility of freezing to death because they would not leave their homes; we learned our lesson and have taken extra measures to assure that this will never happen again, right?

Sorry folks, nothing has changed, no adjustments have been made to assure us that we will not encounter another shortage.

Now, This Year

This brings me to the Spring, Summer and Fall of 2017.  Cold wet late spring, right?  Cooler summer, not the greatest growing season, right?  Fall will bring a heavy drying season.  The US is currently exporting more propane than ever.  National propane inventories are currently lower than they usually are in the dead of winter…this is summer, we should have an overabundance…but we don’t.  The question I have to ask; what kind of winter are we going to have?  This scenario scares the daylights out of me.  All I can think is that we need to protect ourselves from the possibility of a re-occurrence of 2014.

Now, ask yourself, how can you protect yourself and assure that I will have enough propane to get through the winter?  If you have not already done so, please contact CHS Larsen Cooperative and talk to our staff about securing your propane for Fall 2017 and Winter 2018.  We still have contracts available and would be happy to assist you with the process of locking in your supply.

by Kim Leisner, Energy Sales Manager

© 2018 CHS Inc.