Crop Report

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CROP AND WEATHER REPORT
For the Monthly Report Ending August 15, 2018

GENERAL WEATHER FOR THIS AREA:  Dare we say that the weather has been relatively normal during the past month here in Southwestern Minnesota (SWMN)? After excess snowfall and rainfall throughout most of the first half of 2018, the past 30 days we have received adequate, but not excessive rainfall.  In fact, the moisture has been welcome to aid corn and soybean development and refresh some of the areas that flooded in early July.  According to the Southwestern Resource and Outreach Center (SWROC), it has received 24.7 inches of moisture to-date in 2018, which is about 7-inches above the historical average, but much less than in 1993, the last wettest growing season on record.  Top soil and subsoil moisture is still adequate to above average for this time of the year.  Overall, if we receive about 1-2 more inches of rain between now and Labor Day, it should really be enough to get this crop to the finish line in decent shape. 

We probably could not have asked for better weather during pollination for the corn and flowering in the soybeans. Daily high temperatures have ranged from 67 degrees to one day at 90 degrees.  Daily lows have ranged from 50 to 68 degrees.  Fortunately, there has not been any extreme heat and Growing Degree Days (GDD) have remained above average.  The GDD through 8/13 are at 2,029 units, compared to the historic data of 1,810 units (SWROC). 

Figure 1 – This is precipitation from 1/1/2018-8/13/2018 at the SWROC compared to the past 3 years, the historic average, and 1993 (a very wet year) and 1988 (a very dry year).

SOYBEANS: We have reached the critical stage of soybean development. In Minnesota, 92% of the soybeans are setting pods, which is about 11 days ahead of average according to the Minnesota Ag Statistics Service (NASS – 8/13/18).  In Minnesota, 73% of the soybeans are rated good to excellent, which is 1% less than this point last year but 2% higher than the 5-year average. Nationally, 66% of the soybean crop is good to excellent.  Soybean aphid levels have reached economic threshold (250 per plant), so treatment began the end of last week and should be wrapped up by the 20th.  Unfortunately, aphid spraying has become standard the past decade.  Interestingly enough, despite the good overall crop rating, we are hearing of some farm operators who are not treating aphids this year because of drowned out areas and anticipation of crop insurance settlements.  

Figure 2 – It is a little hard for us to believe that the corn and soybean crop ratings in Minnesota are so high when we see quite a few fields with this type of drowned out acres (corn on the left and soybeans on the right on August 3rd). Where the crops were planted timely and have good drainage, they look very good with excellent yield potential, but there are definitely holes in the fields that will have reduced or no crop production. 

CORN:  Nationally, 70% of the U.S. corn crop is rated good to excellent, with Minnesota’s rating at 77%. Despite the late start to the planting season, 65% of the corn is in the dough stage, which is one week ahead of average and 12% of the corn is denting, which is 6 days ahead of average (MASS-8/13/18).  Overall, it appears that we will make it to full maturity around Labor Day with normal growing conditions. 

Figure 3 –  We talk a lot about the crop being “even”, which refers it to being uniform in height and development. This corn is uneven in height and color.  There will likely be a lot of unevenness and variability in yields in the fields this fall at harvest.  

REMARKS: Unfortunately, about the time when it looks like things are turning to the upside this year, we are dealt another blow. From mid-July, corn prices rebounded about 30 cents per bushel and soybean prices increased nearly 75 cents per bushel off the low going into the USDA Monthly Supply & Demand Report on August 10th.  We were able to sell the balance of the 2017 soybeans and also marketed some more of the 2017 corn to reach 90% sold.  The USDA estimated a national corn yield of 178.4 bushels per acre, which would be the 3rd highest national yield ever.  Corn price dropped about 10 cents on Friday (8/10), but is starting to rebound this week.  There is still a positive outlook for corn prices moving forward with national corn inventories projected to decrease into 2019.  National soybean yield was estimated to be 51.6 bushels per acre, which would be the second highest national yield and a record U.S. soybean crop.  National inventories could swell to over 700 million bushels, which is almost 500 million bushels more than they were just a few year ago.  As a result, soybean prices fell 45 cents after the report was released and wiped out a significant portion of the price gain during the past month.  

There have been a few new developments with respect to international trade. The U.S. and E.U. came to an agreement to suspend additional tariffs with additional negotiations.  There has also been noted progress in negotiations with Mexico with respect to NAFTA 2.0.  There is some speculation that there could be some positive trade announcements by the end of summer/early fall and more involvement from Canada thereafter.  There has not been any developments in the press, but there has been speculation that China will still need to purchase a certain amount of soybeans from the U.S. despite the 25% tariffs.

The Trump administration announced a $12 billion tariff aid package for farmers at the end of July. There are 3 facets of the program:  (1) Market Facilitation Program, which are direct payments to farm producers, (2) Food Purchase and Distribution Program, which purchases food for nutrition programs, and (3) Trade Promotion Program, which is set up to focus on developing new markets.  There are projected to be $9 billion of payments to farm producers, but not many details available yet as to what information/forms need to be processed in order to obtain payments, what the payments will be based upon, and when we might start to receive payments.  We will continue to research and monitor the situation on behalf of our clients. 

There were two school bond referendums this week during the primary election. Members of the Worthington School District (Nobles County), which voted against a $68 million bond referendum to build a new school in February, also voted down a $35-$39 million referendum by about 54-58% on Tuesday.  Members of the Mt. Lake School District (eastern Cottonwood/northeastern Jackson County) voted for a $13 million bond referendum to replace/improve/maintain its school facility after a $30 million referendum did not pass back in 2012. 

We have continued to work on re-enrolling land in CRP that is eligible back into the program by the deadline on August 17th.  We also have land that is being enrolled into the Conservation Reserve Enhancement Program (CREP), which is a permanent, conservation easement.  We are coordinating mowing and tree removal on some CRP fields and processing cost-sharing information.  We have been processing a few crop insurance claims and seeding oats as a cover crop. We are also getting ready to conduct yield estimates and updated projections for our clients as we move into September. 

Figure 4 – With the consistent moisture this year, there is a lot of scenic native plants flourishing in the land that is enrolled in CRP. 

Growing-Degree Days
Location 5-1-2018 TO DATE INDICATED TOTAL GROWING DEGREE DAYS DEPARTURE FROM NORMAL
Lamberton 8-13-2018 2023 +213

Corn Growing Degree Days are calculated by subtracting a 50 degree base temperature from the average of the maximum and minimum temperature for the day. The daily maximum is limited to 86 degrees and the minimum is 50 degrees.

Grain Markets (August 15, 2018)
New Vision-Windom Magnolia Poet Biorefining-Bingham Lake MnSP-Brewster
Cash
Corn 3.10 3.03 3.14 N/A
Soybeans 7.75 7.69 N/A 7.94
October
Corn 3.10 3.06 3.22 N/A
Soybeans 7.75 7.75 N/A 7.90
Rainfall
County City July 16 to August 15 March 15 to Date-2018 March 15 to Date-2017
Cottonwood Jeffers 3.94 22.16 16.87
Cottonwood Windom 2.60 23.49 15.44
Jackson Heron Lake 2.65 20.61 18.11
Jackson Jackson 2.48 25.43 17.76
Martin Trimont 2.06 23.71 16.14
Murray Fulda 2.45 27.25 19.67
Murray Slayton 3.40 26.00 17.99
Nobles Round Lake 2.24 26.79 16.55
Nobles Rushmore 2.71 25.44 18.88
Redwood Redwood Falls 2.68 25.32 20.83
Rock Magnolia 2.79 26.42 15.11
Klay D. Walinga
Vice President
Manager, Farm Services Department
Real Estate Broker
Accredited Farm Manager  

 

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