DTN Ag Headlines

OMAHA (DTN) -- Corn and soybean inspections were neutral to bearish while wheat inspections were neutral in the latest USDA export inspections report, according to DTN Lead Analyst Todd Hultman.

Corn inspections totaled 25.7 million bushels for the week ended Thursday, June 13, below the 40.7 mb needed each week to reach USDA's export estimate of 2.200 bb. Inspections for 2018-19 now total 1.608 billion bushels, down 4% from the previous year. The overall pace of corn inspections is neutral to bearish in 2018-19, Hultman said.

Soybean inspections totaled 24.8 mb for the week ended Thursday, June 13, below the 30.5 mb needed weekly to reach USDA's export estimate of 1.700 bb. Inspections for 2018-19 now total 1.31 bb, down 26% from the previous year. The overall pace of soybean inspections is neutral to bearish in 2018-19, Hultman said.

Wheat inspections totaled 13.8 mb for the week ended Thursday, June 13, below the 17.4 mb needed weekly to reach USDA's export estimate of 900 mb. Inspections for 2019-20 now total 29.3 mb, up slightly from the previous year. The overall pace of wheat inspections is neutral early in 2019-20, Hultman said.

(AG)

By Jerry Hagstrom
DTN Political Correspondent
and
Chris Clayton
DTN Ag Policy Editor

WASHINGTON, D.C. (DTN) -- The National Milk Producers Federation expects a high rate of participation in the new Dairy Margin Coverage program (DMC) as farmer signup begins Monday.

National Milk President and CEO Jim Mulhern is urging the farmers to sign up amidst industry challenges.

"We are very pleased with the dairy title" in the 2018 farm bill, Mulhern said.

"The DMC provides a stronger safety net for America's dairy producers, one sorely needed as low prices, trade disturbances and chaotic weather patterns combine to create hardships. We have advocated for months that margin calculations must consider the higher feed costs dairy producers pay to properly nourish their livestock. USDA's decision to include premium and supreme quality alfalfa feed is appropriate and is another win for dairy farmers that will provide additional, crucial aid."

Agriculture Secretary Sonny Perdue formally announced in a news release Friday that farmers can begin signing up for the DMC at their county Farm Service Agency offices on Monday, June 17.

Perdue noted FSA personnel had met the Trump administration's goal of making the DMC a top farm-bill implementation priority.

"This new program offers protection to dairy producers when the difference between the all-milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer," USDA noted in the release.

"With an environment of low milk prices, high economic stress, and a new safety net program with higher coverage levels and lower premiums, it is the right time for dairy producers to seriously consider enrolling when signup opens. For many smaller dairies, the choice is probably a no-brainer as the retroactive coverage through January has already assured them that the 2019 payments will exceed the required premiums," Perdue said.

Mulhern said at a new conference that farmers need the program because, "this is the fifth year of low prices. The last good year was in 2014."

The new program replaces the Margin Protection Program, which was created in the 2014 farm program, but which most farmers found not worthwhile.

In a news release, National Milk said, "Producers may cover up to their first 5 million pounds of annual milk production (equivalent to the production of a 200-cow dairy farm) at a margin of up to $9.50 per hundredweight. Payments under the program will be retroactive to Jan. 1."

"Calculations already made for the first four months of the year show that producers signing up at the $9.50 level would receive payments for each of the year's first four months, with total payments well over the already-set annual premium. All producers will be able to access this affordable coverage regardless of size, and larger producers will have access to significantly more affordable $5.00 catastrophic-type coverage."

Mulhern said the program will be most valuable to smaller producers, while it will be "basic" for larger producers.

DMC provides farmers coverage at various levels based on the premium and a $100 annual administrative fee. Farmers can sign up for catastrophic coverage and just pay the $100 fee as well.

DMC has coverage protection levels that range from 5% to 95% in 5% increments. Tier I coverage for the first 5 million pounds of production provides price ranges from catastrophic coverage up to $9.50 per hundredweight in 50-cent increments. Tier II coverage, for production over 5 million pounds, offers coverage up to $8 per hundredweight.

To sign up for DMC, dairy farmers must have established production history based on documentation of actual milk marketing sales. USDA stated that for most operations, production history is based on their highest milk production from 2011-2013. New dairy operations must establish a production history, according to FSA. Enrollment starts Monday, June 17, and continues through Sept. 20. Farmers will complete a DMC contract and make the annual coverage election.

For 2019 enrollment, farmers can lock in coverage at a certain level for five years and receive a 25% discount on their DMC premiums. USDA is only offering this option in the 2019 registration and election.

For farmers who stopped selling milk in 2019, they can still enroll in DMC for the days the dairy operated.

According to USDA, DMC payments are also subject to a 6.2% reduction in 2019 because of budget sequester laws.

House Agriculture Committee Chairman Collin Peterson, D-Minn., a strong advocate of the DMC, has repeated several times some of the same advice he suggested Friday: Farmers should sign up their first 5 million pounds at the maximum coverage level.

"We put this program together in the farm bill to enable farmers to get their revenue from the market in those years when the milk price is up, but still provide a backstop in the event that milk prices come down or feed costs go up. I've said it before and I'll say it again: Dairies should sign up their first 5 million pounds of production history [at] the $9.50 coverage level. I know times are tough, but this program is going to provide some real help."

USDA has a web-based decision tool for DMC that can be found at www.fsa.usda.gov/dmc

Jerry Hagstrom can be reached at jhagstrom@njdc.com

Follow him on Twitter @hagstromreport

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(CZ)

By Mary Kennedy
DTN Cash Grains Analyst

The long, record-breaking flooding of 2019 on the Mississippi River system has taken a toll on farmland, personal property and the many cities and towns that line the rivers. It has also disrupted commerce on the rivers that depends on barges to move product, especially fertilizer, grain and oilseeds, to and from the Gulf of Mexico and other points along the way.

Only 12 barges have made it to St. Paul, Minnesota, the northernmost point on the Upper Mississippi River, so far this shipping season. The Motor Vessel Aaron F. Barrett, pushing 12 barges heading to St. Paul, Minnesota, locked through Lock and Dam 2 near Hastings on April 24. Since then, flooding and ensuing lock closures have kept most of the entire Upper Mississippi River closed. Most recently, the closure of the St. Louis Harbor shut down barges from moving up or downriver through there.

Upper Mississippi River Locks 11 through 27 from the Illinois-Wisconsin boarder to St. Louis have been closed on and off over the past three months due to flooding conditions. As of June 16, the United States Army Corps of Engineers (USACE) reported Lock and Dam 24, Lock and Dam 25, Mel Price Locks and Dam, Locks 27 and Costello Lock and Dam were still closed. Projected opening dates run from June 16 to as late as June 23.

Here is a link to the USACE St. Louis District reporting lock closures and other flood information: https://www.mvs.usace.army.mil/….

The St. Louis Harbor is closed until the river level recedes below 38 feet, which is not expected to occur until June 20, according to current forecasts. Mississippi River levels at St. Louis crested for the second time this year at 45.7 feet on June 10, 3.9 feet lower than the record level of 49.6 feet set on Aug. 1, 1993. On Sunday, June 16, the river stage was at 42.7 feet.

Here is a link to the National Weather Service hydrograph for current and future river stage forecasts at St. Louis: https://water.weather.gov/….

The Lower Mississippi River remains open below St. Louis, but barge traffic continues to be disrupted by reduced tow sizes and transit time due to restrictions of daylight-only hours under some bridges between St. Louis and the Gulf. Barges are also subject to no-wake zones that also slow their transit time to the Gulf.

"The system and everything within are stressed and upside down," said Tom Russell, Russell Marine Group. "Barge logistics are totally out of balance. Empty barge availability in New Orleans is limited and costly, and ships are backing up in New Orleans waiting for cargo deliveries. Roads and bridges in flooded areas limit rail and truck movements."

In the Southwest Pass (SWP), there is congestion due to safety protocols and high water. These protocols include daylight-only docking/undocking at midstream terminals when water levels are above 12 feet and extra tug power remains in barge fleets at all times, said Russell. "At 16 feet and above, all vessel movement will be daylight only from mile marker 233 through 90.5. Vessels anchoring in that area with a draft of 35 feet or greater will maintain a pilot on board while at anchor." Other safety protocols are also in place when New Orleans experiences heavy fog.

"Midweek, there were 15 to 20 ships in queue waiting entry," said Russell. "There are five dredges working in the SWP to maintain draft. Due to heavy flows and strong current, shoaling and sandbars are a major issue." The Southwest Pass is one of the channels at the mouth of the Mississippi River that empties into the Gulf of Mexico at the southwestern most tip of the Mississippi River.

Shoaling and sandbars will be problematic throughout the entire river system where flooding has been ongoing. In the St. Paul district, dredging continues because of shoaling and is expected to continue most of the 2019 shipping season, according to the USACE St. Paul. This may add to slowdown in traffic once barges are able to move through the river system again. The USACE St. Paul District reported on June 14 that there are currently three active channel-dredging operations in the Mississippi River, and two contract mechanical-dredge crews are mobilizing to begin the week of June 17.

BASIS, BARGE FREIGHT HIGHER; LOADED BARGES REMAIN STUCK ABOVE ST. LOUIS

According to USDA's weekly Grain Transportation Report, flooding continues to reduce the amount of barged grain on the Mississippi River and its tributaries. "So far this year, 13,194 barges of grain have been unloaded at ports on the lower Mississippi River. This is 15% fewer than last year, and 13% below the three-year average. Year-to-date tonnages of down-bound grain, at locking portions of the Mississippi, Ohio and Arkansas Rivers, were 10 million tons, 29% lower than last year and 35% lower than the three-year average."

Corn and soybean deliveries to New Orleans are near six-year lows, according to USDA, as hundreds of barges full of corn and soybeans have been kept waiting up river until water recedes. American Commercial Barge Line reported in their daily newsletter on June 14 that they currently have 629 barges destined to areas affected by adverse river conditions.

As of June 15, the Mississippi River at New Orleans was holding steady at 16.6 feet, and current predictions show that it will not drop below 16 feet until late July. "The river stage in New Orleans is now in the longest sustained flood stage level on record," added Russell. That record could likely continue as weekend forecasts called for scattered showers in the Gulf area.

Here is a link to the National Weather Service hydrograph for current and future river stage forecasts at New Orleans: https://water.weather.gov/….

Cash basis for corn and soybeans on the Upper Mississippi River have strengthened for July and August delivery in anticipation of the river being nearly back to normal, allowing terminals to load out barges to move up and down river through St. Louis once again. Barge freight in that same area is high for the first two weeks of July and stays strong through the month, as there will be a big demand for empties. Basis has also been stronger in the Lower Mississippi River area as buyers need to get corn and soybeans to the Gulf for waiting ships.

"Sooner or later, flood waters will recede," said Russell. "However, the consequences and repercussions will be felt for some time before returning to normal."

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn

(BE/AG)

OMAHA (DTN) -- Farmers who are not able to plant a crop this spring will not get a trade-aid payment and should not expect higher payment levels than normal under prevented-planting insurance, according to a USDA question-and-answer released late Monday on Market Facilitation Program payments and the new disaster aid.

USDA issued a statement from Agriculture Secretary Sonny Perdue on trade aid and disaster relief, along with some Q&As where the department sought to spell out some clarity.

On MFP payments, Perdue stressed, "USDA does not have the legal authority to make MFP payments to producers for acreage that is not planted. To qualify for a 2019 MFP payment, you must have planted a 2019 MFP-eligible crop. Producers unable to plant their crop should work with their crop insurance agent to file a claim."

Farmers who file a prevented-planting claim and plant a cover crop, however, could qualify for "minimum" MFP payment, USDA stated. "If you choose to plant a cover crop with the potential to be harvested, because of this year's adverse weather conditions, you may qualify for a minimal amount of 2019 MFP assistance. You must still comply with your crop insurance requirements to remain eligible for any indemnities received."

When it comes to planting a second crop or cover crop, USDA cautioned that producers "must comply with crop insurance requirements to remain eligible for a full prevented-planting indemnity. USDA encourages you to visit with your crop insurance agent to ensure you are aware of those various options for your operation. If you choose to plant a cover crop with the potential to be harvested, because of this year's adverse weather conditions, you may qualify for a minimal amount of 2019 MFP assistance."

USDA reminds producers they "should plant what works best for your operation and what you would plant any other year," without a trade-aid payment. The 2019 MFP will be based on a single county payment rate that will be multiplied by a farm's total planting of MFP-eligible crops. The payments "are not dependent on which of those crops are planted in 2019, and therefore will not distort planting decisions," USDA stated.

A full list of the eligible crops includes: alfalfa hay, barley, canola, corn, crambe, dry peas, extra-long staple cotton, flaxseed, lentils, long grain and medium grain rice, mustard seed, dried beans, oats, peanuts, rapeseed, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, upland cotton, and wheat.

Dairy producers will receive a per hundredweight payment on production history, and hog producers will receive a payment based on hog and pig inventory for a later-specified time frame.

Tree nut producers, fresh sweet cherry producers, cranberry producers, and fresh grape producers will receive a payment based on 2019 acres of production.

A farmer's total payment-eligible plantings cannot exceed that farmer's 2018 eligible plantings.

USDA also tempered expectations from the potential payments for prevented planting under the disaster bill. The bill gives USDA the authority to compensate prevented-planting losses for 2019 up to 90%. But, the Q&A noted, "While that authority exists, USDA must operate within finite appropriation limits. It is highly unlikely that the supplemental appropriation will support that level of coverage in addition to crop insurance."

USDA stated Congress funded $3.005 billion for the 2018 and 2019 disasters, and requires USDA to prioritize how those funds are spent. USDA intends to provide aid on prevented-planting losses "within the confines of our authority."

USDA also will determine "on a case-by-case basis" whether the department will allow the higher prevented-planting benefits outside of areas that are under a presidential or secretarial disaster declaration.

The disaster bill gives USDA authority to pay farmers higher prevented-planting protection, and also whether to allow the "harvest price option" on prevented-planting claims. In its Q&A, USDA stated it "is currently exploring legal flexibility to provide assistance that better utilizes the harvest price in conjunction with revenue and prevent-planting policies."

On haying and grazing, USDA is reviewing the prevented-planting restrictions in the Federal Crop Insurance Act to see what might be done to loosen the Nov. 1 date for haying and grazing on that prevented-planting ground. USDA stated producers should visit with their crop-insurance agents to understand the best options available to them. USDA added, "Further clarity regarding this haying and grazing date will be forthcoming."

For farmers who do not have crop insurance, USDA reiterated that farmers still must plant a crop to be eligible for an MFP payment, including again that farmers who plant a cover crop "may qualify for a minimum amount of 2019 MFP assistance."

Farmers who did not have insurance could still qualify for compensation under prevented-planting losses under the disaster bill, especially if they farm in one of the secretarial or presidential disaster areas. Again, producers outside of those areas will be considered "on a case-by-case basis."

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(ES/AG)

By Loren Lindler
DTN News Intern

OMAHA (DTN) -- This twice-monthly column condenses the latest news in the field of crop technology, research and products.

UNEVEN EFFECTS OF CLIMATE CHANGE ON FOOD PRODUCTION

Researchers from the University of Minnesota, with help from researchers at the Universities of Oxford and Copenhagen, have seen firsthand some of the effects of climate change on global food production. They released a study showing climate change is already affecting production in the world's top 10 crops and energy sources, although the effects are geographically uneven.

In the study led by University of Minnesota scientist Deepak Ray, researchers determined barley, cassava, maize, oil palm, rapeseed, rice, sorghum, soybean, sugarcane and wheat are in for a wild ride for years to come as the climate continues to change. With the uneven effects of these changes, some regions are coming out on top while others are faring much worse.

You can see the study here: https://journals.plos.org/….

HERE, THERE, AND EVERYWHERE

Climate change yield effects are relatively positive in North and Central America, Latin America and Asia, whereas Australia, Southern Africa, and Europe are seeing generally negative impacts, the researchers concluded. Half of all food-insecure countries are among those experiencing climate-related crop yield losses.

As for the Midwest, rising temperatures allowed some yield increases in certain crops, including corn, sorghum, soybeans and sugarcane. On the other hand, barley, rice and wheat decreased in yields. Other regions are seeing consistent yield losses, including parts of the southern and eastern U.S.

You can read more about the University of Minnesota study here: https://twin-cities.umn.edu/….

The U.S. stands as one of the top soybean producers in the world. A previous study on climate change impacts on soybean production, published in 2015, argued that some new climate patterns may actually be suppressing U.S. soybean yields. With most of the soybean production focused in the Midwest and most of the region not irrigated, producers rely heavily on weather patterns. The researchers concluded that soybean growers in the U.S. have lost $11 billion in yields over two decades from increased temperatures and precipitation variation because of climate change.

Wheat production may also be seeing negative effects from climate change. A recent study led by Mississippi State University ag economist Jesse Tack concluded that high temperatures in the spring and more freezes in the fall have lowered wheat yields. Also, many new wheat varieties are not well-equipped for higher temperatures.

For more information about climate change effects on soybeans, check this out: https://www.nature.com/…. For more on yield impacts in wheat production, see this: https://www.pnas.org/….

BACKBONE OF THE STUDY

By studying the top 10 global crops around the world where they are commonly harvested, the Minnesota researchers were able to connect the puzzle between harvested crop yields and weather. The study consisted of two data sets: climate and weather, and crop yields and harvested areas. Researchers used the temperature and precipitation information from the Climate Research Unit (CRU), to study average seasonal and average annual weather conditions.

The study was built around a 15-parameter equation relating crop yields to weather variables. With these findings, researchers can conclude which areas and crops are most at risk. Research such as this allows researchers to see the impacts that global food production is now facing, so that they can determine where it is heading in the future.

Loren Lindler can be reached at loren.lindler@dtn.com

Follow her on Twitter @Loren_Lindler

(EU/SK/ES)

By Matt Wilde
DTN Progressive Farmer Crops Technology Editor

WEST UNION, Iowa (DTN) -- Cover crop seed will be in short supply this year. Farmers and landowners need to get orders in early, according to dealers and veteran cover croppers.

Demand for cereal rye, chickpeas, tillage radishes and other cover crop seed was already strong as more farmers adopt the conservation practice. The latest Census of Agriculture indicates nearly 15.4 million acres of cover crops were sown in 2017, an increase of 50% from the last census in 2012.

Persistent wet conditions throughout the Midwest could prevent a record amount of corn and soybean acres from being planted this year, up to 15 million acres by some estimates. Cover crop experts urge landowners and farmers to seed unplanted acres with some type of plants to keep weeds at bay and maintain soil health.

Potential seed shortages were discussed during a cover crop and interseeding field day June 13 at FloLo Farms, owned by Loran and Brenda Steinlage of Grundy Center, Iowa. Experts said the problem isn't insurmountable with proper planning.

"Farmers better be calling their seed dealers early with orders to get what they need. Supplies will be tight," said Kevin Glanz, a dealer for Albert Lea Seed. "Cover crop rates may have to be trimmed to cover acres if seed shortages occur. Whether or not you planted corn or soybeans this year, you want something growing all the time."

Persistent, heavy rains this spring caused massive amounts of soil erosion in many northeast Iowa fields without cover crops, he stated. Gullies, washouts and precious topsoil in waterways and ditches were common.

Glanz said that didn't happen on his Manchester, Iowa, farm. All of his 700 acres are planted with cereal rye and other cover crop seed mixtures. The roots and heavy biomass keep soil in place and improve water infiltration.

"I cringe when I see all the erosion, it just makes me sick," Glanz said. "My soil stayed put. That's a big indicator that what I've been doing the last 10 years planting covers is working."

COVER CROPS PAY

Long-time cover croppers told more than 70 people at the field day about the practice. They said the benefits like improved soil health, water quality, weed suppression and a better bottom line far outweigh the challenges.

Cover crops keep soil in place and sequester nutrients like nitrogen on farmland and out of waterways, studies show. Soil health improves by sowing cereal rye, oats, radishes and other plants just before or after harvest, building organic matter. Cover crops extend biological activity of the ground until spring planting.

Glanz said it takes time to learn which covers work best for a farmer's soil types and geography, and initial yield hits may occur. But, in time, the practice can pay for itself in reduced nutrient and herbicide inputs and increase production. Glanz uses 33% less nitrogen in corn production than in the past and yields increased 10%-15%.

"I'm not farming for fun," he said. "To stay in business, anything I do needs to pay."

Cover crop seed and application costs can vary from $10 to $30 or more per acre, depending on mixture and methods used.

Steinlage often hosts field days to share the agronomic and economic benefits of cover crops. He said it's more important this year so farmers new to the practice keep doing it, even if seed is hard to find.

"Knowledge sharing is the key," said Steinlage, who's been planting cover crops for more than a decade.

Steinlage interseeds a cover crop mixture of 32 species, mainly small grains, into corn at the V4 to V6 stage. He also plants covers after corn and soybean harvest.

All of Steinlage's cover crop seed is in the shed for 750 acres. He encourages farmers to order seed now to lock in delivery. Farmers may have to order species of cover crops in less demand to get enough seed. It's worth it, he said.

"I don't run a non-profit," Steinlage said. "I'm getting an extra 15 bushels of corn per acre on $15 worth of cover crop seed."

CRAZY SMART

Jack Boyer of Reinbeck, Iowa, started interseeding cover crops into corn in 2014. By planting early, he said the plants build more biomass to capture more nutrients for the cash crop. In 2015, the amount of nitrogen retained was more than double the amount in non-interseeded corn, or 66 pounds per acre, worth an extra $30, he said.

Boyer said organic matter climbs 0.1% annually due to cover crops, which promotes organic nutrient use to bolster yields.

"People think I'm crazy when I say I'm getting 1 bushel of corn per half-pound of nitrogen," he said.

For prevented-planting acres, Boyer suggested seeding brassica radishes, buckwheat or other warm-season plants. Millet, sorghum and Sudan grasses are also good.

For more information:

http://mccc.msu.edu/…

https://www.dtnpf.com/…

Contact Matthew at matt.wilde@dtn.com

Follow him on Twitter @progressivwilde

(PS/ES/SK)

By Katie Dehlinger
DTN Farm Business Editor

MOUNT JULIET, Tenn. (DTN) -- The DTN National Corn Index settled at $4.20 on Thursday, the highest level in five years.

The index, which DTN assembles from more than 3,000 cash corn bids from across the country, has increased 89 cents from the low it hit in mid-May. While the market has seen declines of that size in recent years, it outpaces the rallies from harvest lows seen last year and in 2016-17.

"The main thing about this rally is that there is still serious reason to possibly expect higher prices because the situation is for real," DTN Lead Analyst Todd Hultman said.

U.S. farmers are likely to claim a record number of prevented planting corn acres as the soggiest spring in decades kept them from the fields. Much of what did get planted was planted late, which will likely also reduce yields.

"Ending stocks at the end of the year could be significantly lower than even USDA estimated on Tuesday (June 11). That's what really underpins and makes this move different than anything that we've seen in a long time," he said. USDA forecast 2019-20 corn ending stocks at 13.68 billion bushels (bb), 1.35 bb lower than its forecast last month.

The Great Lakes region, Illinois and eastern South Dakota have seen some of the strongest cash price moves, gaining 85 to 95 cents or so over the past month. Prices in Iowa, Minnesota, North Dakota, Kansas and Missouri are also up by about 65 to 75 cents.

"I think given their especially wet conditions this year, and the fact that Illinois to Ohio seems to be the heart of the problem area this year, it's no surprise that they're getting a little extra boost in their corn price," Hultman said.

They're also likely to see a greater increase in basis values due to the region's higher demand and greater access to the river transportation system.

DTN Cash Grains Analyst Mary Kennedy said ongoing flooding and a lack of barge movement from north of St. Louis to the Gulf is another factor in rising cash prices.

"While many river terminal basis levels remained flat through the flooding, the need for corn at the Gulf for previous commitments has pushed prices higher. Railroads have faced issues as well due to flooding over tracks in the Midwest. And on top of all of this, farmers in flood areas have been unable to transport corn," she said.

Much of the Eastern Corn Belt is in line for more rain next week, DTN Senior Meteorologist Bryce Anderson said. "Our DTN forecasts call for total rain of 2.25 inches to over 3 inches from Illinois through Indiana and Ohio during the next eight days ending Saturday, June 22. The scary feature is that the upper-air pattern is showing a redevelopment of the same trough west-ridge southeast configuration that we had in May, when the skies opened up."

While crop production concerns are the primary driver of the corn market rally, Hultman said other factors lend their support to the trend continuing higher.

"I don't think we've seen strong participation yet from noncommercials and we don't have strong confidence in production estimates yet, which is probably part of the reason holding them back," he said.

Brazil and Argentina also had large crops, and USDA expects them to export a combined 68 million metric tons (mmt) in the current 2018-19 marketing year, an increase of about 20 mmt, or about 800 million bushels, from last year. Hultman said he expects the U.S. to lose some export opportunities to South America as price dynamics change.

While those sales shift origins, USDA anticipates global ending stocks of corn to decline for the third straight year, which Hultman said is also constructive for corn prices.

Then there are things that are hard to quantify into prices, such as the fact that corn ending stocks have never been this low when soybean stocks have been this high or the volatility introduced by trade policy negotiations with Japan, Mexico and China.

"As bearish as things were looking in April and early May, this is just a huge turnaround in market sentiment," Hultman said. "It wouldn't be surprising to see a choppy summer, especially since we don't have a good handle yet on acres and we certainly don't have a handle yet on what yield will be. There are a lot of moving parts this year. It's a little more of a challenge."

Katie Dehlinger can be reached at Katie.dehlinger@dtn.com

Follow her on Twitter @KatieD_DTN

(BE/AG)

Informa Agribusiness Intelligence

Here is a breakdown of wholesale prices and trends of various fertilizers.

AMMONIA

International

Global ammonia prices weakened in May as the market continued to suffer from oversupply. Emerging spot interest from Turkey and China has not influenced prices.

In the West, the Tampa price for June fell another $17, down to $220 per metric ton (mt) cost and freight (CFR), the lowest price since the summer of 2017. The full effect of new production finally seems to be taking its toll on the market, coupled with a poor U.S. direct application season as DAP prices plummeted.

The East has seen a slightly different situation emerge. Demand was not overwhelming, but it seems Malaysian producers have been able to increase FOB (free on board -- the buyer pays for transportation of the goods) levels to satisfy some spot requirements from Yara and Trammo for Australia and India, respectively, with the latest sale to Trammo at $265 FOB.

Yuzhnyy, Ukraine, prices are still weak despite continued contract shipments and a strong Turkish market; FOB levels are $210 to $215, compared to $235 to $240 in late April.

The global ammonia price level is starting to hurt some production spots but, so far, no major cutbacks are seen. We may therefore see another fall before some decide enough is enough and reduce output.

Domestic

Domestic ammonia prices are starting to fall as sellers compete for buyers ahead of lower prices for summer fill. Wet fields and delayed planting continue to dampen ammonia demand. Potentially lower-planted acres for corn does not bode well for sidedress demand.

Corn Belt FOB values are at $400 to $530 per ton (t) FOB with the high in Illinois and the low in Nebraska, compared to $500 to $545 for the same region in April. Farmers are expected to take prevented planting payments on millions of prospective corn acres this year. This will reduce ammonia demand accordingly and likely lead to higher carryover, especially in the central and Eastern Corn Belt.

Ex-plant prices (the price at the factory, not including any other charges, such as delivery or subsequent taxes) in Oklahoma are unchanged from last month at $350 to $395/t. There is a little sidedress demand emerging in Kansas.

There is some talk about summer fill, but no programs have been announced yet. Details are expected to be announced sometime in June. Lower prices are a certainty, with thought that certain areas of the Corn Belt could see near a $200 reset.

The domestic price outlook is soft. A strong reset is expected for summer fill.

UREA

International

The urea market continued stable to firm in May with a strong buy from India supporting levels early in the month and traders taking positions and pushing prices again higher late in the month ahead of the next tender from India.

India purchased 741,500 t urea, almost double the 400,000 t that many in the market had expected. Prices came in at roughly $280 to $286 per mt CFR India, up $25 to $30 from the April tender. India is expected to return again in mid-June, likely for July-through-early-August shipment. Some in the market expect the importer could be looking to book 1 million mt.

There was some caution in May as Chinese exporters became active again. However, by the end of the month, Chinese sellers also joined the bulls with domestic producers achieving higher prices up to $280 FOB.

On the negative side, the U.S. could be looking at reduced demand owing to lost corn acres and U.S.-sanctioned Iranian product continuing to move into Brazil at lower prices, stifling importers' appetite there for higher-priced tons from non-sanctioned countries. However, the weakness in the U.S. is likely to be contained to the domestic market, though some contract shipments could be diverted to other markets if barge prices get too weak. One potential home could be Brazil, where demand is expected to be bolstered by the recent increase in corn prices.

The short-term price outlook is stable to firm with the India tender expected to support the market.

Domestic

Barge urea prices weakened in May, $242 to $248/t FOB NOLA (New Orleans, Louisiana) in early June compared to around $260 in late April.

Firmness in the international markets supported barge prices at certain times of the month, but this was outweighed by domestic demand concerns stemming from expected planted acreage losses. Closures on the river system reduced barge demand as many potential buyers are not able to receive the product anyway. There is talk of re-exports, but this seems difficult given the general disorder on the river system and the fact that most barges are positioned upriver.

Interior prices are dropping in many markets despite continued river closures limiting the availability of imported product. Many dealers are now getting clearer indications from farmers on how many corn acres will be lost to prevented planting. There has been some activity in the central Plains this past week as farmers here have had success planting and post-plant applications are ramping up. Producers are competing for this business, slashing June prices, with Port Neal, Iowa, down to $330 t ex-plant (The price at the factory, not including any other charges, such as delivery or subsequent taxes.) and Enid, Oklahoma, as low as $315, down $120 and $65, respectively from the highs in early May.

The outlook for domestic urea prices is mostly weak as demand is likely to suffer from reduced corn acres. Interior prices have room to move down as logistic issues clear up, but this may take a while to fully normalize. The NOLA market is soft-to-stable as some sellers appear long in the short term, but a firm international market and solid CF exports will likely support prices in the medium term.

UAN

Domestic UAN prices were generally firm in May but the strength mostly disappeared by the end of the month.

NOLA barge prices edged slightly higher to $165 to $170 t FOB, compared to $160 to $170 last month, but this market was quiet as focus shifted to the terminal level.

CF increased its river terminal prices at St. Louis, Mt. Vernon, and Cincinnati early in May by $35, bringing its prices to $230 per t FOB. There is some nervous selling taking place below CF due to corn acreage loss concerns. On the other hand, with new-crop corn prices rallying, farmers find incentive to apply nitrogen on the acres that do get planted. UAN is also proving to be a better nitrogen option for many buyers in the Western Corn Belt, as it is relatively cheaper compared to urea and is also more readily available in the region.

It is a little early to start talking about UAN summer fill expectations, but it is thought that the program will be announced later than usual this year because of the delayed season, which may mean it comes out after the Southwest Conference taking place in Nashville July 21-25.

The domestic price outlook for UAN is stable to weak. Seasonally increasing end-user demand should be supportive, but this could easily be outweighed depending on how many corn acres are lost.

PHOSPHATES

International

The global phosphate market was weaker again in May with price reductions on both sides of the globe.

India grabbed headlines recently with a tender for 100,000 DAP; an award was reported at a lower $355 CFR, down $30 from late April.

Chinese producers are either at or nearing their own floor in terms of cost and, unless we see a reduction in raw material prices or any further depreciation in the renminbi, some may look to cutback if the price falls much further. A cutback of some 800,000 t DAP was discussed in April, but this was a non-binding agreement and therefore has not been rigorously adhered to by the producers. Some have, however, been taking planned maintenance. This could ease the near-term pressure but does not represent a formal curtailment and does not allow for any significant relief to the burgeoning global export availability from mid-June onwards.

Prices remain weak in the west. Mosaic Fertilizantes announced that it has resumed mining activities at its Catalao mine in the state of Goias. Two other mines remain idled while the company works to bring its mine tailings dams into compliance with new Brazilian regulation. In its Q1 results, Mosaic noted that depending upon the timing of the mines' return to full operation, its plans to ship up to 300,000 incremental metric tons of finished phosphates from its Florida production facilities to Brazilian customers. This follows the company's announced cutback in March of around 300,000 t phosphate fertilizer. Despite the reduced production, prices in the NOLA barge market remain the weakest in the world and Brazilian MAP CFR prices have declined to $365, compared to $390 to $395 in late April.

In the absence of additional production cutbacks, phosphate prices appear set for further decline in the short term.

Domestic

NOLA barge prices continued to drop during May but appear to have bottomed out late in the month. DAP and MAP were both last trading at $310 to $320 t FOB, compared to $318 to $320 t FOB and $315 to $322, respectively, at the end of April.

There are reports of substantial quantities of all products on the river unable to reach their destination in time for the season, suggesting volumes in the summer-fill program could be reduced. On the upside, reports of higher crop prices lend support to farm level demand next season. However, on the other side, the higher prices stem from lower-planted acreage, in turn suggesting lower resupply demand for fertilizers at retail level.

Mosaic announced its summer-fill program on June 5, with prices of $330/t FOB NOLA for DAP and MAP. Mosaic has stated that the latest corn price rally to a five-year high, combined with the anticipation of a big fall, should lend support to this program.

Throughout May, other producers and importers were concluding summer-fill business at $305 to $315 t NOLA equivalent. While product available at the low end of the range has dried up there is still reported to be availability from traders for summer fill at $310 to $320 FOB NOLA equivalent.

Importers are hesitant to book further cargoes. For one, the price is no longer attractive, and the river system remains a mess. That said, there are two cargoes from Morocco scheduled to arrive in June and unconfirmed reports of a third.

River terminal prices are softening as sellers compete for end-of-season sales. DAP is generally around $350 to $360/t FOB on open sections of the river, down from $360 to $375 in late April. Some markets maintain a premium due to river closures, but these are starting to fade.

The outlook for phosphate prices is steady in the short term, but further imports pose a risk to this stability.

POTASH

Domestic potash prices are under pressure as sellers compete for end-of-season sales and before summer-fill prices are announced. It is becoming abundantly clear that the $10 to $15 increase posted by Canadian producers in early Q1 has not been fully accepted by the market. It seems the poor fall, late spring, and for the most part weak crop prices have combined to limit demand enough to cap domestic potash prices at the earlier price. Now it is beginning to look quite likely that significant corn acres will be switched to soybeans or just not be planted, which, if realized, will likely lead to high spring carryover.

River terminal prices are around $300 to $305 per t FOB on most sections of the river system. A slight premium remains in markets that have been closed off to barges, but it is fading. Barge prices have fallen to $260 to $268/t FOB, compared to $265 to $272 in late April.

North American producers are expected to announce summer-fill programs in June. A decrease in prices is fully expected but the extent of the decline is somewhat uncertain. Most speculate producers will decrease prices by $10 to $30 from current values.

The domestic price outlook for potash is soft in the short term.

**

Editor's Note: This information was supplied courtesy of Fertecon, Informa Agribusiness Intelligence.

(CZ/ES)

By Emily Unglesbee
DTN Staff Reporter

ROCKVILLE, Md. (DTN) -- Turns out there are a few creatures out there that are enjoying the wet mess of the 2019 planting season.

Some early season caterpillars and slugs are out and feasting on small, late-planted corn and soybean fields.

These fields are especially vulnerable to damage from insects this year, cautioned University of Illinois Extension entomologist Nick Seiter.

"In general, the later the planting, the younger the plant is when they feed on it," Seiter explained. "And younger plants are less able to overcome that stress."

To add to the problem, many growers missed spring herbicide applications, which allowed some fields to get "pretty hairy" and host a lot of insects, Seiter noted. "A lot of weeds in a field allows caterpillar pests to complete their early development and then, once the weeds are burned down, they need to find something to eat."

Here are this week's top culprits to watch for:

BLACK CUTWORM

Cutworms are active in much of the Midwest now, and they do their worst damage in young cornfields that haven't yet reached the V5 or V6 growth stage.

They typically lay their eggs in weedy vegetation and then move to corn. Weedy fields and cover crop fields are most at risk. In the early stages of development, namely instars one through three, black cutworms will feed through the stem of a young corn plant, producing a distinctive "shothole" appearance, Seiter noted. By the fourth instar, the cutworm is capable of completely "cutting" a corn plant off -- either stunting it or killing it if the cut is below the growing point.

"That's the damage we're most worried about -- the stand loss situation," Seiter said.

Some Bt traits, such as Cry1F and Vip3A, do target black cutworms, but the bigger the cutworm larvae, the less protection the traits will provide, Seiter said.

"The traits are much more potent against early instars, so how well it works depends on the timing of the interaction," he explained. "Usually, once cutworms get up to cutting size, the trait will deter but not necessarily stop them."

The black cutworm is a particularly ugly insect -- Seiter describes its black color as having a "greasy, dull sheen," although they aren't actually slimy to the touch. During the day, the cutworm burrows down into the soil, so scouting means getting your hands a little dirty by brushing aside soil near damaged plants.

If you find that 3% to 5% of your corn stand is suffering from cutworm damage, and the insects are still active in the field, it may be prudent to spray for them, Seiter said. See more details on recommendations for managing black cutworm from the University of Illinois here: https://ipm.illinois.edu/….

ARMYWORMS

True armyworms share a lot of the same early-season habits of the cutworm, such as a great love of weedy vegetation and a taste for young corn plants. However, armyworms often target soybeans and wheat in addition to corn, and they have a preference for grassy weeds or crops, such as rye.

"The reason they get their name is that, once a food source has run out, they will all march in unison to a new food source together," Seiter explained.

Armyworms are defoliators -- they will feed on corn leaves, but don't have the same cutting potential as the black cutworm, and corn is usually more resilient to their feeding, Seiter added. "Corn can take a lot of damage early on, as long as they haven't fed on the growing point," he said. Remember that only the Vip3A Bt protein protects corn against true armyworm -- check the Bt Trait table here: https://agrilife.org/….

Avoid useless "revenge applications" by making sure that armyworms are still active in your field when you spy significant damage. "If you can't find any larvae, it's because they've developed and moved on, so you want to make sure they are there and actively feeding before you treat," Seiter said.

See more details on true armyworm management from the University of Missouri, which lists different treatment thresholds for different crops: https://ipm.missouri.edu/….

Finally, cutworms and armyworms may have cycled out of fields and pupated in some parts of the Midwest, so growers should check local trapping networks for guidance on the timing of potential infestations, Seiter added. For example, Illinois growers can find their state's trapping information here: http://bulletin.ipm.illinois.edu/….

SLUGS

By far the most frustrating of the three pests selected here are slugs, which are extremely hard to treat in-season.

These slimy pests favor wet weather and plenty of residue, so no-till fields, cover crop fields and fields coming out of pasture or the CRP program are at the highest risk for damage.

"When they do really well is when we have wet conditions right around planting and cool, wet weather persists and slows down development of the plants and give slugs more time to do damage," Seiter said.

Soybeans are often most at risk, because the slugs are more likely to destroy their growing point and kill the plant entirely, Seiter added. Corn can overcome their feeding better. Fields with open seed slots -- often the result of mudding seed in -- are also at risk, he said. "That open seed slot makes a nice location for the slug to hide, and it will feed on germinating seeds right as they push cotyledon out."

As mollusks, slugs are not affected by insecticides, which makes controlling them extremely difficult. Molluscicides exist, but they are often expensive, of limited availability and can be impractical for large-scale crop fields, Seiter noted. Tillage can help, but it is obviously not a good solution for no-till farmers, he added.

"The best solution, unfortunately, is often to just wait it out," he said. "Slugs do not like hot summer temperatures."

See more on slug management from Penn State University here: https://ento.psu.edu/…

Emily Unglesbee can be reached at Emily.unglesbee@dtn.com

Follow her on Twitter @Emily_Unglesbee

(AG/SK)

Powered by DTN