Posts By: Anne Moore

Grain Market Update – August 7

Wheat Harvest 2019

The markets have been on the downward spiral the last few weeks. There is a lot of speculation on what the report will read, come Monday at 11 a.m. Many people think that the USDA did not take into consideration the prevent plant acres. That should be on this report which may cause a bump in the corn market. Markets should remain relatively flat until that point, but be proactive once they do come out with targets. You can set your own targets with our Online Target Offer Center, click here.

Weather is still moving the market to some extent. Beans are, in large part, still being effected by the Chinese trade wars one way or another. Consider doing a cash plus with beans for a little premium that may get back to the $8 range for cash prices.

Wheat was effected as of late, due to weather conditions and other countries buying wheat from others outside the US.

Long Term Storage Agreement Listing: a local farmer has listed the reminder of their long term storage agreement, better known as condo storage. If you have an interest in purchasing this click here to see listing or contact Mary Kay for more details. They are listing a price for just this one year or for the remaining 12 years.

Written by: Michael Steingraber, CHS Grain Originator

Weed Control Systems

Weed control has been on top of the mind for many growers the last year.  Troublesome weeds have started to pop up everywhere.  Because of these weeds, new methods of control have been developed and deployed for growers to use.

The team at CHS Larsen Co-op took advantage of the many acres of prevent plant to help sort out the differences in some of the weed control systems.  There are at least six different trait platforms a grower can choose from on soybeans.  This allows for a huge variation in the products that can be applied post emerge.  In addition to the base chemistries behind the systems, there’s an infinite amount of surfactant to go with. 

We took a deep dive investigation into the surfactants that go with the base systems.  This is where the interesting things happened.  Just by changing surfactant,  a grower’s weed control could be affected by 50%.  Choosing the right surfactant is almost as important as the base chemistry.  The Enlist ™ and Xtend® programs offered the best weed control when coupled with CHS Level Best.  Please contact your agronomist for more information. 

Written by: Jeremy Hunt, CCA, Agronomy Sales Manager

Grain Market Update – July 24

The corn market has been a bit of a roller coaster these last few weeks. The market is currently running off weather until the next report on August 12, which should give us an accurate depiction of the crops that are out there and how beans and corn will progress through the year. China trade talks are still in discussion, if they do buy beans we could see a return on the bean market.

Do not be afraid to look to next year’s crop already, I still believe we need to be proactive. 2020 new crop corn is still hanging around the $3.75 mark and it may not be a bad idea to set your bench mark at that level. Consider doing an HTA (set futures now and wait for basis to narrow then apply the basis).

Leadership Change Update

Employees were informed July 17 that Gerry Baker from CHS Elburn is going to be our Interim Grain Manager in this time of transition.

The CHS Larsen Cooperative Grain team came together and met with four individuals from CHS Elburn in late July. The team from CHS Elburn will be collaborating with CHS Larsen to ensure all management duties are covered.

CHS Elburn is based in Illinois and handles 150-160 million bushels annually. They have two ethanol plants and one river terminal grain outlet. They have five grain facilities, including one in southern Wisconsin. This knowledgeable team will be a great resource to utilize during this time as they are well versed in grain marketing. Your local grain originator will still be your on-farm contact

The seamless sharing of people resources across CHS businesses, when needed, is a good reminder of the value of our CHS cooperative system.

Any questions call us in the grain department, we are more than willing to help.

Thank you!

Mike Steingraber

Grain Market Update – July 10

7/10/19

The USDA To Release July Crop Report on Thursday

The USDA will be out with its July monthly crop report to be released on Thursday at 11 am.  After the June 28th acreage report, the market will likely take this report with a grain of salt.  The real challenge is and will continue to be being able to accurately predict the amount of actual planted acreage of both corn and beans.  Up to this point, the industry is grasping at straws to figure out what corn and bean acreage numbers actually are.  Most everyone agrees that the 91.7 M corn acres that the USDA released on June 28th are much too high, and the 80 M bean acres are much too low.  The numbers played havoc with the grain markets following the June 28th report.  My best guess is that the corn acres will be close to 89 M acres and beans at 82 M acres.  The USDA will be resurveying all of the producers in the Corn Belt states during the month of July, and then the August 12th USDA report will have the updated acreage numbers based on this resurvey.  Thus, on August 12th, we should have the first solid acreage data of the year.  The market will be trying to position itself ahead of this data release.

After months of wetness especially in the eastern Corn Belt, we have finally been receiving warmer temps and the excessive rain has finally moderated.  This has allowed the corn and bean crops to finally start to catch up in maturity, and the heat and less water has allowed aggressive and productive growth, finally.  The crop will still be late, but maybe with continued heat, as long as the rain still comes, we can close the gap somewhat before harvest.  Most of the corn has now had nitrogen applied and many corn acres are now aggressively growing with a deep green color.

There are major corn and bean acreage in Ohio, Michigan, Indiana, and Wisconsin that did not get planted.  Northwest Ohio, northern Indiana, central Michigan, and northeastern Wisconsin are the worst areas with the largest unplanted acreage.  Folks, this is serious.  There are thousands and thousands of unplanted acres in these areas.  I know as I have travelled through them all.  The major livestock producing areas in west central Ohio, northwestern Michigan, and east central Wisconsin are all in panic mode because they are unclear on how they will secure enough corn to feed their livestock for the next 14 months.  Basis on old crop corn in these areas have skyrocketed higher in Ohio and Michigan to +75 to +100 over at major feed destination locations.  Farmers who have old crop corn are not budging.  They can see that they have a commodity in demand, and they want to get as much as possible during this opportunity.  They also are unsure of their own production this year, so they do not want to sell to much and possibly leave more in the bin to hedge next year’s production.  All of this has caused old corn and new corn basis to rachet higher to severely higher the more east you travel.  CSX Columbus, Ohio corn trains traded today at +75 cents over the September futures today in the east.  This is the high-water mark so far this year.  The extreme strength in old crop corn will continue to support basis and will ultimately cause corn spreads to stay narrow, and likely keep new crop spreads more narrow than normal as well.

The other story today that is not getting much press is the continued efforts to get a new trade deal approved with China.  The US has been working diligently with China for the last 18 months to get a new deal developed, but nothing is concrete as of yet.  However, President Trump did meet with Chinese President Xi last week at the G20 meeting.  The US delegation continues to negotiate with China, but there is still work to be done.  This will be something to watch in the coming weeks.  Ultimately, we need to have a China bean export program for Oct / Nov out of the Gulf as well as the PNW.  My fear is that the weather problems has caused a much higher corn price that is killing our export demand.  South America has the cheapest corn and beans in the world, and China is buying their corn and beans instead of ours.  Long term, this is not good for the US.  Any time we destroy our demand base, it takes years to redevelop these relationships.

Targets Produce Success and Protection For Your Farm

Weather markets will push the market around like a yoyo and produce unprecedented volatility.  However, volatility can be your friend if you have a solid marketing plan and know how much and at what price you feel comfortable selling when the right opportunities present themselves.  If you are not working with one of our grain originators today, please give us a call.  We will gladly sit down with you to create a plan and help you protect your farm.  For a list of our grain originators and the one closest to you, please click here.  These types of volatile markets are a grain marketer’s dream.  The volatility present selling opportunities that are very short lived.  For the disciplined marketer, who knows exactly what commodity he needs to sell and at what level, this is a perfect scenario.  You simply place target orders in our system and at 3 am in the morning next Thursday while China makes an announcement when we are all sleeping, the markets ramps up, hits your target, locks in your contract price, all automatically while you are in bed.  How fantastic is that!  I encourage all of you to start using our online target system.  Its free, easy, and will protect your farm.  Please click here for more information.

New Arrive Delayed Price Rates have Been Reduced

We have reduced our Delayed Price rates for new arrive corn and beans into Readfield and Center Valley.  These rates are for new arrive bushels only, and the rate will be in effect until Oct 1, 2019 when new crop storage rates will go into effect.  The new Delayed Price rate is now FREE through Oct 1, 2019.

What Are The Charts Telling Us?

Here are the support and resistance levels for cash and new crop grains.  These are all futures levels as traded at Chicago:

Cash Corn – Sep 19 Corn Futures – Support at $4.13, Resistance at $4.45, Place Targets at $4.40

New Corn – Dec 19 Corn Futures – Support at $4.20, Resistance at $4.48, Place Targets at $4.45

Cash Beans – Aug 19 Bean Futures – Support at $8.71, Resistance at $9.03, Place Targets at $8.95

New Beans – Nov 19 Bean Futures – Support at $8.90, Resistance at $9.22, Place Targets at $9.15

New Wheat – Sep 19 Wheat Futures – Support at $4.98, Resistance at $5.19, Place Targets at $5.15

To see where grain futures are currently trading, please click here.

As always, if I can help you with anything, please call me at 419-279-3809 or send me an email at marcus.cordonnier@chsinc.com.

Marcus Cordonnier

Shop Safety Tips

The hazards associated with shop work require special safety considerations. Whether you work in a metal shop, wood shop, automotive shop, glass shop, or electrical shop, the potential hazards for personal injury are numerous. Below are key reminders to keep yourself and your coworkers safe when working in a shop or performing preventative maintenance.

  • Do not wear loose or torn clothing, neckties, or jewelry when working around machinery.
  • Wear clothes that are suitable for the work you are doing. If you wear a long sleeved shirt, be sure the sleeves are rolled down and buttoned.
  • Make certain that long hair is not loose and is pulled back away from equipment.
  • Be certain all safety guards are in place before operating any machine or equipment.
  • Turn off, de-energize/unplug, or lock out (depending on the type of equipment) all equipment before cleaning, repairing or adjusting. This includes trucks and cars when working in or under them.

Wear safety glasses with side shields when working with shop equipment. Additional protection using face shields with safety glasses or goggles are necessary for the following types of work:

  • Grinding, chipping, sandblasting
    Welding

Wear suitable gloves, preferably leather, when working with the following:

  • Scrap metal or wood
  • Sharp-edged stock
  • Unfinished lumber

Grain Market Update – June 19

What a Bizarre Spring!  The Abnormally Wet Weather Is Causing Problems In All Areas Of The Corn Belt.

The spring will go down as one of the wettest, if not the wettest, in history.  And not just for this area, but for the entire Corn Belt.  We have never witnessed a spring that has been so wet and has caused so many problems with getting our corn and bean crops planted.  Many local areas in Wisconsin, Indiana, and Ohio have been able to only plant 50-60% of their originally intended corn acres, and now the clock is running out on beans as well.  Many, many acres of corn and beans will go unplanted this year.  Some estimates have between 10 – 15 Million acres of corn and beans that won’t be planted, and if the farmer has Prevent Plant Insurance, these acres won’t be planted at all.  If a farmer does not have insurance, then he is continually struggling to get something planted to save his farm.  Corn planted today won’t yield much grain, but it can work for silage, and if you are a dairy farmer, this will be its intended use.  It is entirely too late now to plant corn for grain production as the crop will run into an early freeze, not to mention it will be very wet and suffer from poor test weights and higher FM levels.  Beans planted today could still work, but the window is slamming shut rather quickly.  And as I look at the forecast, the 6-10 day maps continue to look very wet for this area.  Not to mention that the crops that are planted are having a hard time emerging because we are lacking sunshine and heat to rapidly grow the crop.

The market is continuing to have a very difficult time getting its arms around the final planted corn and bean acres this spring, as well as the yield potential for this crop.  With the planting conditions being much below par and everything being at least 3 weeks later than a normal crop, there will be a yield lag that is quite noticeable this fall.  Without boring you with a detailed S & D analysis, my best guess is that corn ending stocks for this fall could easily drop down to 1.2 B bu and if we have a dry summer, it could drop as severely as 800 M bu.  If this happens, this will cause corn to remain very firm, much firmer than it already is.  Much of the corn carry on the CBOT will vanish, as it already has, and basis will firm dramatically.  On beans, the current estimate on bean carryout for this fall is just over 1 B bu.  If the weather does not cooperate, this could very likely be the biggest carryout estimate of the year.  Add to this a new Chinese agreement, and then the bean market could be off to the races because bean exports will all of a sudden grow instantly to China.  Similar to corn, bean carries are about half of what they were just 2 weeks ago, and bean basis is firming as well.

Just like you, the market is very stressed out about not having a clear picture on acres and yields.  It could be months before we have any accurate idea on what this crop will or will not produce.  In the mean-time, the market will gyrate like we have not seen since 2012.  The downside potential for corn and beans is limited, and any surprise in poor weather or a new Chinese agreement will just fuel us to a bullish story.  The corn market is not done rallying yet, and the bean market is very concerned about getting its last few acres planted while still in June.  We have seen the market correct a bit over the last day or so, but this is needed for a healthy bull market.  Corn and beans suffer from a lack of planted acreage and the late timing of the planted crop, and wheat is suffering from excess spring rains which will hurt quality.  None of this is bearish.  I expect that all grains will advance another leg higher once this small correction runs its course.

There are some producers who were very fortunate and were able to get most of their corn and beans planted.  If you are one of these folks, consider yourself lucky, and now you have a very favorable market to price your crop.  Dec ’19 corn futures are currently trading at $4.59  I believe we will have a shot to trade Dec corn up to the $5.00 level in the next few weeks, especially if we have a problem with the weather.  On beans, its anyone’s guess.  If the weather turns dry and we get a new Chinese deal, this market could turn from a sleeping bull to an enraged bull overnight.  The other factor is the actual acres planted, and how NASS is quantifying these acres each week.  Are the acres being planted or are they going to Prevent Plant and no longer being intended to be planted?  And if no longer intended to be planted, NASS is considering these acres planted whether they are actually planted or not.  This is all adding to the market’s confusion and frustration over the amount of planted acres.  This will likely add to the bullish sentiment as we move forward.

For livestock producers, this is going to cause you to pay more for corn in the coming year.  I wish I had better news, but your cost of corn will likely get rather expensive for the next year.  The lack of a planted corn crop locally has caused both futures and basis to firm in dramatic fashion, and frankly, I don’t see it backing off in material quantity until well after harvest.  Local basis has firmed over the last month, and this won’t change much either.  People who need to buy corn will likely need to pay at least option (zero basis under the Chicago futures level) or more to secure corn, if one can even find a source to sell corn to you.  Thus, for all of the above reasons, the corn basis has rallied firmer over the last month and will likely continue to do so.  New crop corn basis has firmed as well, and it will likely remain firmer than normal until past harvest.  I also expect the bean basis to firm as well.  Last harvest bean basis was very cheap due to the huge yields and the lack of Chinese buying.  This year is different, especially if a new Chinese deal is signed.  I don’t see new crop bean basis getting weaker than it is today at 90 cents under November and could firm dramatically if these other factors come into play.  Get your seat belts tightened.  Volatility will ramp up and this will be a wild ride.

New Arrive Delayed Price Rates have Been Reduced

We have reduced our Delayed Price rates for new arrive corn and beans into Readfield and Center Valley.  These rates are for new arrive bushels only, and the rate will be in effect until Oct 1st 2019 when new crop storage rates will go into effect.  The new Delayed Price rate is now FREE until Oct 1st 2019.  After Oct 1st, these bushels will be subject to the new crop storage rates posted at that time and are not known today.

Targets Produce Success and Protection For Your Farm

Weather markets will push the market around like a yoyo and produce unprecedented volatility.  However, volatility can be your friend if you have a solid marketing plan and know how much and at what price you feel comfortable selling when the right opportunities present themselves.  If you are not working with one of our grain originators today, please give us a call.  We will gladly sit down with you to create a plan and help you protect your farm.  For a list of our grain originators and the one closest to you, please click here.  These types of volatile markets are a grain marketer’s dream.  The volatility present selling opportunities that are very short lived.  For the disciplined marketer, who knows exactly what commodity he needs to sell and at what level, this is a perfect scenario.  You simply place target orders in our system and at 3 am in the morning next Thursday while China makes an announcement when we are all sleeping, the markets ramps up, hits your target, locks in your contract price, all automatically while you are in bed.  How fantastic is that!  I encourage all of you to start using our online target system.  Its free, easy, and will protect your farm.  Please click here for more information.

What Are The Charts Telling Us?

Here are the support and resistance levels for cash and new crop grains.  These are all futures levels as traded at Chicago:

Cash Corn – July 19 Corn Futures – Support at $4.38, Resistance at $4.64, Place Targets at $4.60

New Corn – Dec 19 Corn Futures – Support at $4.54, Resistance at $4.73, Place Targets at $4.70

Cash Beans – July 19 Bean Futures – Support at $8.94, Resistance at $9.21, Place Targets at $9.15

New Beans – Nov 19 Bean Futures – Support at $9.21, Resistance at $9.48, Place Targets at $9.40

New Wheat – July 19 Wheat Futures – Support at $5.15, Resistance at $5.49, Place Targets at $5.40

To see where grain futures are currently trading, please click here.

As always, if I can help you with anything, please call me at 419-279-3809 or send me an email at marcus.cordonnier@chsinc.com.

Marcus Cordonnier

Can I Use Corn or Soybeans as a Cover Crop on Prevented Plant Acres?

June 14, 2019

Written by: Paul D. Mitchell, Agricultural and Applied Economics, UW-Madison Office: (608) 265-6514 Email Web

As many Wisconsin farmers are taking prevented plant payments for their insured corn or soybeans acres, they are asking what they can use for cover crops on these acres. Traditional cover crop seed is hard to find this year with all the prevented plant acres in the region and farmers already have corn and/or soybean seed. Thus the question: Can I use corn or soybeans as a cover crop on prevented plant acres? The short answer is yes, but only if planted sufficiently late and if the cover crop is never harvested for grain, seed or silage/green chopped, even after November 1. Note that a cover crop can be grazed, baled for hay or baled for straw/stover for bedding, including a corn or soybean corn crop, but only after November 1. This bulletin provides guidance to farmers, examining at three options.

First, if a farmer takes the full prevented plant indemnity, planting the same crop as a cover crop before the end of the late planting period is not allowed. Instead, the farmer should report it as late planted with a reduced guarantee. For all but northern Wisconsin, June 25, is the end of the late planting period for corn grain, June 30, for corn silage. For soybeans, the late planting period ends on July 5, for the northern two-thirds of Wisconsin and on July 10, for the southern third. Therefore, after taking a full prevented plant indemnity, planting corn or soybeans as a cover crop before these dates is not allowed. These maps (above) shows the dates for the end of the late planting periods for each Wisconsin county. If a farmer wants to plant a cover crop during this period, something other than corn and soybeans should be planted.

Second, if the goal is to harvest forage from prevented plant acres, then farmers should take the partial prevented plant payment (35% of the full payment) and acknowledge forage as the alternative crop. Technically farmers can take the full prevented plant indemnity and wait until after November 1 to graze the cover crop, to bale it as hay for feed or to bale it as straw/stover for bedding (making silage is not allowed, even after November 1). However, this is a risky practice for forage production in Wisconsin and not recommended. Rather, farmers should take the partial prevented plant payment (35% of the full payment) and acknowledge forage as the alternative crop. If farmers have questions, they should consult with local agronomic experts for recommended crops for forage production as an alternative crop. Potentially, a full season corn hybrid (105-110 days) planted in early July may be a viable option for corn silage production, but it will not be insurable.

Third, the RMA does not have an official list of approved cover crops. RMA states that “For crop insurance purposes, a cover crop is a crop generally recognized by agricultural experts as agronomically sound for the area for erosion control or other purposes related to conservation or soil improvement.” (https://www.rma.usda.gov/en/Fact-Sheets/National-Fact-Sheets/Cover- Crops-and-Crop-Insurance). Thus a local agronomic expert, such as a University of Wisconsin Extension county crops agent, could provide a letter to a farmer and crop insurance agent that corn or soybeans was an acceptable cover crop in their county. Alternatively, a University of Wisconsin Extension state agronomic specialist could provide publically available written guidance on how to use corn or soybeans as a cover crop on prevented plant acres in Wisconsin including recommended agronomic practices. If farmers use corn or soybeans as a cover crop, they should carefully document the destruction of the corn or soybean cover crop (e.g., with dated photographs), that it was not chopped for forage or harvested for grain or seed, and if they grazed it or baled it for hay or straw/stover, that they did not do so until after November 1, and that is it clearly for bedding. Potentially, this documentation could include a written statement from an Extension county crops agent or other third party expert witness documenting and certifying these activities and their dates.

Finally, many farmers have been wondering about the impact of prevented plant acres on USDA support payments. The market facilitation program (MFP) has been announced for 2019, with Secretary Perdue making an official press release on June 10: https://www.usda.gov/media/pressreleases/2019/06/10/secretary-perdue-statement-disaster-and-trade-related-assistance. At this time, it seems that MFP payments will not be made for prevented plant acres (see item 4), but these interpretations can evolve, as MFP is authorized by executive order, not an existing law. Prevented plant payments do not affect Agricultural Risk Coverage (ARC) or Price Loss Coverage (PLC) payments. Lastly, how the USDA Farm Service Agency will count prevented plant acres as acres planted for determining base acres is officially unclear and has to be clarified by Congress.

Plan Ahead to Purchase Cenex® Grease this Summer for Gift Cards

Starting June 17 through August 16, 2019, end-users can earn VISA® gift cards on qualifying Cenex® grease products. End-users will receive a $15 gift card for every qualifying 4-10 pack or 35-pound pail purchased during the qualifying time frame.

Customers may also receive a $50 VISA gift card for every qualifying 120-pound keg purchased during the promotional window. Qualifying grease products include:

  • HD Moly Xtreme
  • Poly-Xtreme®
  • Maxtron® EP
  • Blue Gard 500+™
  • Molyplex 500+
  • Maxtron® FS
  • Red Protect XT™
  • ML 365®
  • Fluid Gear Grease
How it works:
  1. Provide a copy of the redemption form to the end-user to submit their claim. You can get these forms from your Certified Energy Specialist
  2. End-user completes the Summer Grease for Gift Cards redemption form, attaches required receipts, and mails it to CHS post-marked no later than September 16, 2019.

Questions? Contact your CHS Larsen Co-op representative.

Grain Market Update – May 30

The market has been driven by wet weather across the Corn Belt, but is also effecting us here in the north. Hopefully you were able to get something in the ground. However, if unfortunately, you were not able to get what you needed planted there are options to help take care of your contracts.

Many people are taking insurance or preventive plant alternatives due to lack of planting ability. If you do have corn to market, set targets above $4 and in increments above to hit on the way up. Beans are getting slightly pulled up with corn, but are also on planting delays, so if you can hit a decent $8 price you can add a cash plus for a decent offer to even out the prices for some risk.

The government is planning on issuing out relief support this year probably based off of county averages and not this year’s crop.

If you are not working with one of our grain originators today, please give us a call.  We will gladly sit down with you to create a plan and help you protect your farm.  For a list of our grain originators and the one closest to you, please click here.

Written by: Michael Steingraber, CHS Grain Originator

Crop Drying LP Contract

CHS Larsen Coop’s Energy Team: Keeping Up with the Needs of the Modern Farmer.

Winter is finally over… well kind of… and spring is in full force… sort of.  As we quickly enter planting and growing season, drying those crops will definitely be on the minds of most.

  • How many bushels will I dry this year?
  • How much propane will I need?
  • How much is this going to cost me?

Today’s farmer have enough stress to deal with daily, without the concern of budgeting for the unknown. Helping farmers control costs has always been a priority for CHS Larsen Coop.   In the past, we have allowed farmers the opportunity to add their crop drying gallon needs to their winter heating contract.  In an effort to evolve and take the savings one step further, CHS Larsen Coop is extremely proud to offer a CROP DRYING CONTRACTS!

Details of the new CROP DRYING CONTRACT are simple.  Contracts will run 09/01/19 – 11/30/19, which is the prime drying time.  You may lock in as many gallons as you need for drying during that time frame, while taking advantage of pricing based off of a lower demand and typically higher supply.  This will translate to great savings for our Agricultural customers!

We would still urge customers to lock in their winter propane needs as necessary.  But I believe the new CROP DRYING CONTRACT will be an excellent addition to our already great contracting programs!

Please contact your local energy sales team member for more information on how we can help you plan for fall.

Written by: Kim Leisner, Energy Sales Manager

© 2019 CHS Inc.