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Turkey in Negotiations With Moscow and Kyiv to Open Grain Export Corridor

Alistair MacDonald, William Mauldin and Ann M. Simmons reported in today’s Wall Street Journal that, “Russia is open to easing its blockade of Ukraine’s ports along the Black Sea if sanctions on Moscow are lifted, a Russian official said Wednesday, a move that, if it went ahead, could increase grain exports and help relieve rising food inflation and shortages.”

But a Ukrainian official on Wednesday questioned whether Moscow could be trusted and urged world leaders to instead focus on ending the war and strengthening sanctions. A senior U.K. official also rejected the idea of lifting sanctions, a potential early indication of where other Western governments might fall.

The Journal article indicted that, “State Department spokesman Ned Price said, ‘We certainly won’t lift our sanctions in response to empty promises, and we’ve heard empty promises before from the Russian Federation. Our nonfood sanctions will remain in place until Putin stops his brutal war.’”

MacDonald, Mauldin and Simmons explained that, “Elsewhere, Poland and Lithuania say they will make space available at seaports, while Warsaw has suggested sending trucks to help bring the wheat out of Ukraine. The European Union is looking at ways to streamline the movement of food across Ukraine’s borders. Kyiv itself wants to invest in new border posts and expand its roads to cope with the influx of grain cargoes.

“The current routes out of Ukraine, which mainly involve putting grain on trucks and trains to be sent to Romanian and Baltic ports, are sometimes subject to weeks of delays and border queues as long as 9 miles. The increased journey time is adding to the costs for Ukraine’s cash-strapped farmers and making grains even more expensive.”

Reuters writer Sabine Siebold reported yesterday that, “Ukraine’s Foreign Minister Dmytro Kuleba said on Wednesday that Russia was trying to ‘blackmail‘ the international community by raising the possibility of an offer to unblock Black Sea ports in return for a relaxation of sanctions.”

And Reuters News reported today that, “British foreign minister Liz Truss accused Russian President Vladimir Putin of holding the world to ransom over food, responding to a question about whether she supported lifting sanctions in exchange for grain exports from Ukraine.”

Meanwhile, Bloomberg writer Natalia Drozdiak reported yesterday that, “The Netherlands would consider joining an alliance to send warships to escort grain supplies stuck in Ukrainian ports but would need assurances from Russia and, ideally, involvement from Turkey, according to the Dutch defense minister.

Estonia and Lithuania have been calling to establish a coalition of the willing to send naval escorts for grain freighters, as European officials decry Russia’s effective blockade of Ukrainian ports that’s left Kyiv struggling to get grain shipments out.”

With respect to Turkey, Reuters writer Orhan Coskun reported today that,

Ankara is in negotiations with Moscow and Kyiv to open a corridor via Turkey for grain exports from Ukraine, a senior Turkish official told Reuters on Thursday.

The Reuters article stated that, “Ukraine’s Black Sea ports have been blocked since Russia invaded in February and more than 20 million tonnes of grain are stuck in silos there. Russia and Ukraine account for nearly a third of global wheat supplies and the lack of exports from Ukraine is contributing to a growing global food crisis.

“‘Turkey is negotiating with both Russia and Ukraine for the export of grains from Ukraine,’ the official said, requesting anonymity.

“‘With a corridor to be opened from Turkey, there was a demand for this grain to reach their targeted markets. Negotiations are still ongoing,’ the person added.”

Still, Bloomberg writers Andrea Dudik and Rosalind Mathieson reported yesterday that, “Resuming Ukrainian grain shipments will be time consuming given challenges that include mine-clearing in Black Sea ports and the need for cooperation from the very country that kicked off the war, Lithuanian President Gitanas Nauseda said.”

“Mined Ports, Red Tape and Russia Risk Stop Ukraine Grain,” by Andrea Dudik and Rosalind Mathieson. Bloomberg News (May 25, 2022).

And more broadly on the ongoing impacts of the Russian invasion, Jason Douglas, Jon Emont and Vibhuti Agarwal reported in today’s Wall Street Journal that, “Countries around the world have enacted a wave of export curbs on food since the start of the Ukraine war, a trend that economists say risks aggravating shortages and global food-price inflation.

On nearly every continent, nations have put new restrictions and bans on products ranging from wheat, corn and edible oils to beans, lentils and sugar. Lebanon has even banned the export of ice cream and beer.

The cascade of restrictions marks another setback for unfettered global trade, which has been dented in recent years by tariff and regulatory spats between the U.S. and China and moves by countries to safeguard supplies of medical equipment and vaccines during the coronavirus pandemic.”

Export Curbs Pressure Prices. Wall Street Journal Front Page (May 26, 2022).

Today’s Journal article added that, “For governments, limiting food exports is a way to soothe public anger over rising prices and beef up domestic supplies, particularly after Russia’s invasion of Ukraine disrupted global food markets and raised prices for many commodities. Both countries are major exporters of grains and vegetable oils.

“Economists, though, say experience has shown that restrictions on food exports inevitably push global prices up further as importers buy what they can from reduced supplies. While governments may get a brief respite from surging prices, they are rarely significant or long lasting, usually because farmers respond by limiting production or switching to other crops that attract better prices at home and abroad.”

USDA Releases “Cotton And Wool Outlook” Report

The May 2022 Cotton and Wool Outlook report presents and discusses USDA’s initial 2022/23 U.S. and world cotton supply and demand projections. The associated tables also include the latest U.S. textile and apparel trade data.

To view the complete report, click here.

Soybean Farmers Release Their 2023 Farm Bill Priorities

The American Soybean Association is excited to share soy’s 2023 Farm Bill priorities [ https://soygrowers.com/wp-content/uploads/2022/05/ASA-2023-Farm-Bill-Initial-Priorities-5.24.22.pdf ] . As the House and Senate Agriculture Committees lay the foundation for this pivotal legislation, ASA hopes its initial priorities list will provide insight and assure soy growers’ interests are considered as the farm bill process continues with hearings this year and legislative development next year.

ASA President Brad Doyle, who grows soybeans in Arkansas, said, “Getting to this point has involved a thoughtful information-gathering process that began back in September 2021. We wanted to assure as many farmer voices and soy states as possible were involved to make this a comprehensive list tailored to their needs. We look forward to sharing with our congressional leaders as a helpful resource and reminder that ASA is available to assist with the farm bill reauthorization process.”

The document contains a general needs assessment and topical break-outs, including farm safety net, conservation, trade, energy, rural development, research and nutrition.

Among the priorities included:

• Improving the Title I farm safety net for soybeans
• Continuing the voluntary, incentive-based, flexible approach to conservation programs
• Investing into promotion of U.S. commodities globally
• Building biobased and biofuels opportunities
• Ensuring broadband coverage is accessible throughout rural America

ASA’s steps for determining its farm bill principles began internally with education sessions for farmers serving on the ASA Board of Directors and soy state affiliates to hear more about the various titles included in the farm bill. ASA then worked in conjunction with allied soy groups United Soybean Board and U.S. Soybean Export Council to distribute a widespread survey to farmers. Finally, ASA hosted a series of 12 listening sessions, by both titles and geographic regions, in which farmers and states could share input – or follow up by comments submitted to ASA staff. These priorities will be refined into more specific requests by early 2023.

No-Till Farmer Podcast, Revisiting Dwayne Beck On Crop Rotations Part 2

This week’s edition of the No-Till Farmer: Influencers & Innovators podcast is a continuation of the previous Influencers & Innovators podcast featuring NNTC presenter Dwayne Beck. Beck discusses the particulars of the discussion he started with the last episode: the particulars of crop rotation and using rotations to fight pests. Beck recently retired as the director of the Dakota Lakes Research Station in South Dakota.

Potential 2022 Fall Prices for Corn and Soybeans Based on History , By Gary Schnitkey

Corn and soybean prices for 2022 fall delivery are at high levels. During the first two weeks in May, fall delivery bids in central Illinois averaged $7.39 per bushel for corn and $14.52 for soybeans. Significant changes in prices going into fall are possible. History suggests that there is a 5% chance that cash prices for corn in October will be below $4.60 per bushel. There is a 5% chance of cash prices below $10.56 per bushel for soybeans. Conversely, there also is a chance of higher prices. There is a 5% chance that October cash prices exceed $10.50 per bushel for corn and $18.49 for soybeans.

Framework Used to Evaluate Possible Price Changes

Our objective is to present possible fall prices for corn and soybeans. To do this, we evaluated changes in both futures and cash prices from May to October. The analysis provides a perspective on both futures and cash markets. While futures and cash prices are highly correlated, cash prices tend to move down more in years of falling prices. Analyses are first presented for corn in the following section and then for soybeans in the second.

Corn

Table 1 shows historical prices from 2001 to 2021. The panel labeled “May” gives average prices during the month of May and includes three columns. The “Dec CME” column shows the average settlement prices of the December Chicago Mercantile Exchange (CME) contract. From 2001 to 2021, futures prices averaged $4.00 per bushel. For the first two weeks of May in 2022, the December contract has averaged $7.39, well above the historical averages. The $7.39 average was the highest of all prices since 2001. In May, the fall delivery price for central Illinois averaged $3.74 per bushel from 2001 to 2021 as shown in the “Fall Delivery Bid” column. The “Basis” column shows the difference between the futures and fall delivery price averaged -$.26 per bushel. There is variably in the basis, ranging from -$.50 in 2008 to -$.13 in 2012. In 2022, the basis is -$.29 per bushel.

 

The panel labeled “October” give an average of daily prices during October and includes three columns. For October, the December contract averaged $3.82 per bushel from 2001 to 2021 as shown in the “Dec CME” column. The “Cash bid” column gives the delivery price for grain, while the “Basis” column gives the difference between the CME and cash bid. From 2001 to 2021, the cash bid average was $3.64 per bushel, $.19 below the average December futures contract. Note that the average May basis of -$.26 per bushel is more negative than the October basis of -$.19 per bushel. A more negative basis in May likely is due to a risk premium built into fall delivery bids.

The final panel, “Change”, includes two columns showing changes in both futures and cash prices. Over time, the change in the December contract from May to October averaged -4%. The change in May to October cash prices average -2%.

Historical price changes shown in the final two columns of Table 1 are used to calculate the probabilities of low and high prices. These probabilities are calculated by ordering the changes from low to high and then calculating price change percentiles. Results are shown in Table 2. For a .05 probability, the futures price change is -31%. From 2001 to 2021, 5% (or 2 out of 20) of the changes in future prices were at or below -31% (i.e., -34% in 2008 and -31% in 2004). In 5% of years, we would expect price to decrease by at least -31%. From the current $7.39 level, the resulting October futures price would be $5.14 per bushel ($7.39 x (1 – .31).

 

For cash prices, the probabilities in Table 2 suggest:

  • $4.00 — The chance of having a $4.00 price or lower is below .05.
  • $5.00 — The chance of a $5.00 or lower price is between a .1 and .15 probability, interpolated to be 12%.
  • $6.00 — the chance of a $6.00 or lower price is between .15 and .25, approximately 23%.

There also is considerable upside potential. For example, in Table 2, the price that corresponds to a 0.75 probability is $7.59 for cash corn. In other words, there is a 25% chance of prices being above $7.59 in October.

The .95 probability in Table 2 suggest a 5% chance of cash prices exceeding $10.50 per bushel in October.

Soybean

Historic soybean prices are shown in Table 3. The November CME futures contract is used for soybeans. Highlights are:

  1. May 2022 prices are $14.84 for the November CME futures contract, and the fall delivery price is $14.52 per bushel, giving a basis of -$.32 per bushel. Basis in May has averaged -$.30 per bushel historically.
  2. In October, the basis between the November CME contact and cash prices averaged -$.25 per bushel, less negative than the -$.30 basis in May.
  3. Over time, the change in May and October futures prices has averaged 0% from 2001 to 2021, ranging from a decline of 29% to an increase of 30%.
  4. The percent change in cash prices between May and October has averaged 1%, ranging from -29% to 31%.

 

The probability of soybean price changes are shown in Table 4. For cash prices:

  • $10 per bushel — There is less than a 5% chance of soybeans being below $10 per bushel
  • $11 per bushel — The chance of less than $11 per bushel cash prices is near 8%.
  • $12 per bushel — The chance of less than $12 cash prices is 20%.

Higher prices also are possible. Historic price changes suggest that cash prices could exceed $18.49 with a 5% probability.

Summary

History suggests that large changes in prices are possible from May to October. We quantified possible price chances using history as a guide.

USDA Issues Report On The Adoption Of Cover Crops

Cover crops are an increasingly popular management practice that farmers use to provide seasonal living cover between their primary commodity cash crops. Farmers often plant cover crops in the fall to provide winter cover for soil that otherwise would be bare. Over the past decade, fall cover crop adoption has grown in the United States, according to data from USDA’s Agricultural Resource Management Survey (ARMS).

On fields growing corn for grain, one of the most commonly grown commodity crops, 0.6 percent of the acreage used a fall cover crop before the 2010 crop. By 2016, 5.5 percent of corn-for-grain acreage had a preceding fall cover, and by 2021, 7.9 percent of corn-for-grain acreage followed a fall cover crop. This represents a 44-percent increase in fall cover crop adoption on corn-for-grain fields between 2016 and 2021.

The growth in adoption of cover crops on cotton fields is similar, with a 46-percent increase between 2015 and 2019. The ARMS surveys asked farmers to report on the cropping history, including the history of cover crop use, for each selected field. The average within-survey growth in cover crop adoption was similar for each target crop, as evident in the average year-over-year changes.

A version of this chart appeared in the USDA, Economic Research Service report Cover Crop Trends, Programs, and Practices in the United States, released in February 2021.

This chart adds data for 2019 cotton and 2021 corn-for-grain fields.

CropLife Canada Launches Season Three Of “Real Farm Lives” Series

Canadians’ interest in food and their desire to know how it was produced has been heightened over the last two years. Real Farm Lives, which is returning for a third season, gives Canadians who may not have the chance to visit a farm a behind the scenes look at a day in the life of the hard-working farmers who grow our food.

Season 3 travels to PEI and builds on two previous successful seasons that have featured farm families from Alberta all the way to Nova Scotia. In an effort to share accurate information with consumers about food production, the documentary web series highlights the realities of modern farming, straight from the perspective of Canadian farmers.

“Most Canadians no longer have a direct connection to the farm so it’s understandable that they have questions about how their food is grown. Consumers want transparency in the food system and that’s what we are trying to give them through Real Farm Lives,” says Pierre Petelle, president and CEO, CropLife Canada, the association behind the series.

Featured in Season 3 is a fifth-generation farm family, the McKennas, from Newton, PEI. The McKenna family grows potatoes, carrots and turnips and they are driven by a commitment to sustainability and continuous improvement.

“It might surprise a lot of consumers to know that agriculture is among the most innovative and technologically driven industries in the world. Farmers are sustainably growing more food while adapting to the challenges of climate change. And it’s a story we think more Canadians would like to hear,” says Petelle.

According to research conducted by the Canadian Centre for Food Integrity, Canadians have a high level of trust in farmers but they often have an outdated view of what a farmer looks like.

“Real Farm Lives gives Canadians the chance to hear directly from farmers about how they grow the food they find on their grocery store shelves. And it helps to tackle some of the misconceptions Canadians have about farmers and about agriculture writ large,” says John Jamieson, president and CEO of the Canadian Centre for Food Integrity. “I think Canadians will feel a real sense of pride about the work Canadian farmers do to feed Canada and the world after watching these videos.”

Season 3 of Real Farm Lives features videos of potatoes, carrots and turnips being grown and harvested, along with interviews with three generations about the challenges and opportunities that come with growing food.

Real Farm Lives was developed by CropLife Canada and funded in part by the Government of Canada under the Canadian Agricultural Partnership’s AgriCompetitiveness Program. It was also supported by the Canadian Centre for Food Integrity.

To watch Season 3 of Real Farm Lives visit: www.realfarmlives.ca.

STEYR Wins iF Design Award For Its Terrus CVT Tractor

STEYR, a regional agricultural tractor brand of CNH Industrial (NYSE: CNHI / MI: CNHI), won the prestigious iF DESIGN AWARD for its Terrus CVT Tractor, the latest in a series of accolades for this machine.

Founded in 1953, iF Design has become a global symbol of excellence in design and its annual awards are highly esteemed. The iF seal is granted to products that blend innovative style and aesthetics with enhanced functionality to benefit customers while raising the profile of the design community.

STEYR won in the Product Design category for its new Terrus CVT tractor, produced at the brand’s St. Valentin manufacturing facility. It is a perfect combination of function and form, blending a bold and rugged exterior design with a premium interior focused on operator comfort and ergonomics. The cab has been restructured to create a better working environment and now serves as a ‘command center’ in which style has purpose. The design of the controls makes tractor operation more intuitive, efficient, and productive.

The iF DESIGN AWARD is further recognition of the outstanding work carried out by the CNH Industrial Design team in creating machines that blend customer- focused style with product quality, capability, efficiency, and sustainability.

Lg Seeds Agronomist: Early Season Steps Can Pave The Way For A Big Corn Crop

Mother Nature has a major impact on the corn crop in its early vegetative growth stages, but there are still steps farmers can take to improve plant health and yield potential, says Dan Mitchell, an LG Seeds agronomist in the mid-South and Delta.

Tip #1: Don’t skip side-dressing
“This year, farmers are looking at the dollar signs and wanting to take one nitrogen source, generally dry urea, and apply it prior to planting, completely skipping side-dressing,” says Mitchell, who warns that’s a bad idea.
“You can’t afford to skip side-dressing,” he says, reminding that nitrogen is one of the most critical nutrients for corn throughout the growing season.

Nitrogen works best if it’s applied when the plant needs it most. When it comes to side-dressing, that’s in the V6 to V8 stages and later when rapid nutrient uptake is taking place.

Tip #2: Biologics, starter fertilizers, micronutrients are worth a look
High corn and fertilizer prices also have more farmers interested in products like biologicals to improve crop potential and soil health or starter fertilizers to give corn plants an early boost. The latter is particularly important for fields in a conservation tillage program.

Such products have improved immensely over the past decade, with many now backed by sound research and results. Mitchell says many starter fertilizers can provide return on investment. “Even if they don’t add yield directly, they can enable plants to grow more efficiently, resist stress, and dry down sooner. That earlier, drier corn crop is an economic benefit,” he says.

With a multitude of products on the market, deciphering which are worthwhile can be difficult. Mitchell says, “I encourage farmers to make sure there’s science behind it. Start small, test it on some acres, but don’t get carried away with a new product until you’ve proven to yourself there is a return on investment. And then if there is, expand it to more or all of your acres.”

More farmers in Mitchell’s area are also adding nutrients like sulfur, zinc, manganese and copper to their starter fertilizers or later in their fertility programs. These can provide for more complete feeding of the crop to get it through the V6 to V8 stage when it has a more ample root system and is more sufficient on its own.

Tip #3: Control weeds and southern rust ,/b>
Weed control is another major focus when corn crops are in the V4 to V6 stages of development. Heavy weed growth, especially grassy weeds, can really sap the plants, Mitchell says.

He also emphasizes the importance of being ready to apply fungicide in areas where Southern Corn Rust (SCR) or Gray Leaf Spot are likely to occur. SCR can knock 20 to 30 bushels per acre off yields quickly. Farmers should monitor the SCR northward movement from southern areas and be ready to act, he says.
Fungicides are most commonly applied aerially during the period between full tassel and two weeks after the tassel has been accepted. But multiple applications may be needed, since most fungicides have a maximum protection window of 20 to 30 days, Mitchell adds.

Fungicides have also improved substantially over the past decade, he says, with many now using three different modes of action to protect against diseases.
Would you like more tips on building yield? LG Seeds prides itself on having a lot of boots on the ground for superb customer service and sound recommendations. Contact your local LG Seeds agronomist today.

U.S. Planting Catches Up: 72% Of Corn, 50% Of Soybeans Now In The Ground

Rows of soy bean plants in a field

U.S. corn and soybean planting moved closer to normal last week. Activity got off to a slow start in many areas this year due to cool, wet weather and while conditions still haven’t been ideal overall in parts of the region, a recent somewhat warmer, drier pattern has helped planting pick up steam.

The USDA says that as of Sunday, 72% of corn is planted, compared to the five-year average of 79%, and 39% of the crop has emerged, compared to 51% on average.

Half of the soybean crop is planted, compared to the normal rate of 55%, with 21% emerged, compared to 26% on average.

28% of winter wheat is in good to excellent shape, up 1% on the week, with 63% of the crop headed, compared to 65% on average.

49% of spring wheat is planted, compared to 83% typically in late May, with 29% emerged, compared to 50% on average.

54% of cotton is planted, compared to usual pace of 51%.

91% of rice is planted, compared to the five-year average of 89%, with 66% emerged, compared to 71% normally, and 70% of the crop in good to excellent condition, 1% below a year ago.

22% of U.S. pastures and rangelands are called good to excellent, unchanged from last week.

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