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.

(more…)

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.

Weekly Grain Update- September 19, 2017

9/19/17

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.

Marcus

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?

Grease

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

 

9/12/17

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.

Thanks,

Marcus

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