Support the industry on Global Fertilizer Day

October 13 is Global Fertilizer Day

Friday, October 13, is Global Fertilizer Day, established by the fertilizer industry as a way to help highlight the essential role fertilizers play in global food production. “About half of the world’s food production is attributable to the use of fertilizer, yet our industry commonly faces incorrect public perceptions about its importance,” says Michael Johnson, CHS Agronomy director of marketing.

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October Is Co-op Month

October is National Cooperative MonthCHS is proud to announce that October is National Cooperative Month. After all, what better time could there be than during harvest to reflect on everything cooperatives do for the farmers and ranchers who own them? As you’re busy bringing in your harvest, consider how rural co-ops, empowered by the combined strength of its owners, ensure the steady supply of affordable inputs that make your crop possible.

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Weekly Grain Update – October 9, 2017

soybean harvest

10/9/17

The USDA will be out with their October crop report this Thursday at 11 am.  I continue to recommend growers to use target orders on report days as the market gyrates greatly almost immediately once the numbers are released.  Many times we see opportunities present themselves moments after the numbers are known but vanish by the time the market closes.  If you still have bushels you must sell for this fall, lets take advantages of these opportunities as they will likely be few and far between in the coming days.

Many areas of the Corn Belt received rain over the last few days.  Most areas received between 1.5 to 3 inches of rain since Wednesday.  This quickly stopped any bean cutting for the moment.  Locally, we are seeing no rain in the forecast until Saturday.  This will allow the beans to dry out or give you the opportunity to go after some early corn before switching back to beans later in the week.  The rain might have been a blessing in disguise as most beans were terribly dry.  Most beans being brought into our facilities were testing 9-12% moisture.  Obviously, 13% is dry and anything under this moisture is hurting you with excess shrink as the beans loose moisture in the field.  With the rain, you will now have the opportunity to cut beans much closer to 13% which will help boost bushels per acre.

This rain will put a damper on harvest selling pressure for the next day or so.  As a result, we have seen bean futures catch a bid and are currently moving higher again.  Currently, Nov ’17 bean futures are at $9.75.  I still feel we have an opportunity to rally Nov bean futures to the $9.85 to $10.00 level as this will represent the 50% to 61.8% retrace of the entire July – Aug slide.  Again, if Nov bean futures can rally into this window, I would seriously consider selling all remaining beans that must be sold this calendar year for your operation.  This would create a double top on the charts and Nov bean futures could easily fall quite dramatically if achieved.

On corn, we are seeing December corn futures have a decent amount of support at $3.50.  I don’t believe Dec corn futures will fall below $3.45 as the farmer is not selling corn.  We continue to see the farmer selling beans for cash flow and will tuck away every kernel of corn as possible.  This will cause futures and basis to remain firm.  The real test will be in two weeks when nearly all of the Corn Belt is in active corn harvest.  If we cannot break Dec futures during this period, this will likely be the low for the year.  Futures and basis will react to what the farmer does.  If he is not a seller, the basis and futures will be forced to do the work to create movement.  I encourage all of you tucking corn away in every crack on your farm to NOT get complacent.  In order to protect your operation, you need to be proactive and lock in corn sales later in the crop year where futures and basis is much stronger.  The corn market is offering excellent carry, where you can gain approximately 30-40 cents per bushel if you can hold the corn until July, for example.  You can only lock in this carry if you forward contract the bushels now for July delivery.  You cannot wait until July and sell it spot because the cash carry will vanish by then as the cash price will likely be very similar to what it is today.

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.

For farmers delivering into Seymour, there is a major construction project being completed at the main intersection of town.  Please look at the easiest way to get into our facility by the map posted online.  Any questions, please call the Seymour or Center Valley office.

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

Marcus

Is Your Diesel Fuel Up to the Challenge

 

About 10 years ago engine designers were tasked with new EPA standards for less emissions and better fuel economy.  In 2007, the common rail system was born!  Since then more stringent emissions standards have been put in place.  This has created upgrades to the common rail system, since 2010 there have been two major upgrades performed, these upgrades have created a diesel fuel engine that has extreme pressure and heat with lower tolerances.  The major side effect of this heat & pressure has been “cooked fuel.”  Over the past 10 years farmers are seeing more filter changes and higher down time than ever before.

I have created a four part series with some examples of how Cenex Ruby Fieldmaster & Roadmaster have come to the rescue and addressed these fuel related issues that are associated with the common rail system.  Please turn your sound up on your computer or phone and watch this overview of the common rail system as it pertains to you.

K is for Potassium, Why soil K levels need monitoring.

 

Soil sampling for pH has become a staple in decision making on farms across the state that grow alfalfa. The second soil test nutrient that is monitored heavily is phosphorus, this is due to the need to maintain soil P levels for compliance and soil conservation. The forgotten tool in a routine soil sample is the soil K level. Potassium is the key nutrient that drives yields in corn silage, alfalfa, soybeans and grain corn.

The majority of potassium stays in the cells of plant tissue in the fall, meaning that any removal of Stover yields a large export of soil K from fields. Rock River Labs out of Watertown have followed trends in soil K levels. Their research has shown the levels of soil K have been increasing in the low and very low categories over the last 5 years for a total of an 8% increase in these categories. This paired with the research by UW Madison has shown a decrease level of 1.5ppm / year. This is problematic to crop production as the remedial process for soil K can be a 5-8 year adventure.

So my advice for you is to monitor your soil K levels before they become low or very low, and affect your yields for 5-8 years. Soil K removal for 60 bushel beans is 70lbs K , alfalfa at 5 ton is 245 lbs K, and corn silage at 20 ton is 145lbs K . Converted to Potash this is 115, 395, and 230 lbs respectively. This can become a huge amount of K removal from a field in a 4/5/or 8 year rotation. Ask yourself if your current rotation and fertility programs are able to address the yields that you have removed from the fields. If you feel that you have not replaced the soil K levels that have been removed, contact myself, or your CHS Larsen agronomist to talk about monitoring your soil K levels with soil testing and proper fertilization.

By Alex Yost, CHS Larsen Co-op YieldPoint Specialist 

Deferred Pay Fall Applied Fertilizer

 

Think back just a few months and we’ll remember the many challenges we faced with the wet spring and summer. One of those challenges was applying fertilizer to your fields. Now ask ourselves “What can I do differently to avoid this challenge next spring?” The answer, “Apply your P and K fertilizer in the fall.” Applying P and K fertilizer in the fall has even greater advantages, than just eliminating a challenge in a wet spring. It is a very sound and proven agronomic practice. Your fertilizer is where it should be working for you. It’s prior to spring soil compaction as it is not an issue. It eliminates a trip across the field in the spring giving you more time to get your crops planted, and CHS Larsen Co-op can provide more prompt service as well as fertilizer prices are historically lower this time of year.

I often get remarks like “I’d like to apply my fertilizer in the fall but I don’t know if I want to tie money up for that long.”

We at CHS Larsen Co-op have a tool for you to use to take advantage of the best of both worlds.

You can apply your fertilizer this fall and not pay for it until March 31, 2018. As far as your cash flow goes it is similar to spring applied fertilizer without the hassle of dealing with unknown spring conditions.

And just like the guy on television selling the one time offer deal. — “Wait, we are not done yet.”

We’ll include custom application charges too, buy wait there is more, we can include your crop input financing under this program as well.

Think about working smarter, getting field work done in a timelier manner and taking the guess work out of what the weather will do next spring by applying your P and K this fall.

Ask your CHS Larsen Co-op agronomist about this financing program or call Dave Banks at 920-982-1111.

By Dave Banks, CHS Larsen Co-op Loan Officer

Weekly Grain Update – October 3, 2017

Mississippi barge

 

10/3/17

The USDA came out with its Quarterly Grain Stocks report on Friday and pegged corn at 2.295 B bu and beans at 301 M bu.  These numbers indicate the final amount of corn and beans left over before the new crop year starts on September 1st.  As a comparison, the final numbers from last year were 1.737 B bu of corn and 197 M beans.  These numbers indicate that there are very ample supplies of corn and a slightly tighter bean supply than originally thought.  This helps to explain the higher market on Friday as several funds decided to cover their short positions after these numbers were released.  However, by the close of the market on Friday, many elevators pre-hedged their anticipated purchases over the weekend, and all of this selling pressured futures right at the close.

The Mississippi and Ohio Rivers continue to struggle with shipping problems during this harvest.  The Ohio River is closed at lock 53 as it is broken down.  Many areas on the Mississippi are struggling with low water levels, and many have hit bottom on their way to the Gulf.  The lower water level is forcing all barge loaders to only partially fill their barges so they have lower drafts and so they don’t bottom out.  All of this is occurring during the most active barge loading season of the year, during October.  This is causing excess capacity to not be utilized and more barges are needed to ship the same amount of grain.  This is causing barge freight to scream higher as barge freight costs reach levels during 2014.  Rumors have surfaced that barges traded at 1300% of tariff today which is a huge number.  It will be a long season this year if this situation remains.

Local Update

Locally, we are seeing many beans being delivered into our facilities.  Most of the beans are dry, with only a few loads over 13% moisture.  Beans continue to be dry, but the stems are difficult to cut.  We have not had a killing frost as of yet, and thus most bean plants and all vegetation are not dead yet.  The dry weather has allowed many acres of wheat to be planted, and significantly more acres than last year.  Once we get a rain, this wheat should germinate and grow aggressively with the warm temps.  Everyone planting wheat should be looking at forward contracting their wheat for July delivery into the elevator.  The wheat market is offering some wonderful carries which is resulting in better prices for next July.  I suggest placing targets at $4.50 and then place a target to sell every 25 cents higher and reward the market on rallies.

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.

For farmers delivering into Seymour, there is a major construction project being completed at the main intersection of town.  Please look at the easiest way to get into our facility by the map posted online.  Any questions, please call the Seymour or Center Valley office.

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

Marcus

CHS announces equity management decisions


At its September meeting, the CHS Board of Directors made a number of decisions regarding equity management. The following letter from CHS Board Chairman Dan Schurr outlines these decisions:

Dear Cooperative Owner,

CHS was built on the shared values of managing our business with the highest integrity, building lasting and mutually rewarding relationships, and partnering for our collective success.

These values guide every decision your CHS Board of Directors makes on your behalf. Thanks to the dedication and hard work of those owners and employees that came before us, CHS is a cooperative that’s been built for the long haul. Your Board of Directors will ensure that tradition continues. It’s with this spirit that we share recent Board decisions around equity management.

Despite solid performance in our core businesses, a few large events have resulted in substantial fiscal 2017 financial losses in certain patronage-based businesses. These events included a loss attributed to a large producer loan and business unit asset impairments in the United States.

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Weekly Grain Update – September 25, 2017

9/25/17

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.

Marcus

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.

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