(Agriculture.com) 2016 is looking to be the year of soybeans. Chris Hurt, Purdue University agricultural economist, is predicting corn acreage to be 1.5% to 2% lower and soybean acreage to be around 2% higher for the Midwest’s 2016 growing season. With Hurt’s soybean estimate hitting 84.8 million acres, a new record would be set for total U.S. soybean acreage.

Based on Indiana budgets projected for 2016, quality of land appears to have a $30 to $40 better return for soybeans. Indiana is currently the fifth largest corn-producing state in the U.S. With lenders watching their farm clients closely and some putting restrictions on how much they’ll loan for operating capital, this could have a big influence on 2016 planting decisions.  ...continue reading

(WSJ) As the farm-equipment industry sputters to the end of its worst sales year since 2009, Deere & Co. will soon provide clues to how much more pain is in store for the coming year.

Deere, the world’s largest seller of tractors and harvesting combines, plans to report its fiscal fourth-quarter results on Wednesday. The Illinois-based company is expected to offer a sales outlook that will set the tone for the farm-machinery industry in 2016. Many analysts see a big stepdown in Deere’s projection that would signal a prolonged slump for the sector.

“We know that 2016 is not going to be an up year. The question is to what extent will the decline continue,” said Mircea Dobre, an analyst in Robert W. Baird & Co. “There’s a lot to be cautious about when it comes to agriculture and Deere especially.” ...continue reading

Lower commodity prices are moderating farmland values through the midsection of the U.S., according to a new report from AgriBank, one of the largest banks within the national Farm Credit System.

The report provides an overview of farmland values across the 15-state AgriBank District, including differences by sector and by state. It also reports the latest data on cash rents and looks ahead to how cropland values may fare in the future. ...continue reading

(WSJ) Farmland values fell in parts of the Midwest in the third quarter, reflecting a downdraft in the agricultural sector driven by three years of lower crop prices, according to Federal Reserve reports on Thursday.

The average price of “quality” farmland in the St. Louis Fed’s district, which includes parts of Illinois, Indiana and Missouri, dropped 2.6% from a year earlier, as farm incomes weakened considerably, the Fed bank said.

In the Kansas City Fed’s district, which includes Kansas and Nebraska, irrigated-cropland values declined 1%, while the average price of nonirrigated land rose 0.4%, the bank said. Irrigated farmland depends on man-made water systems rather than rainfall. ...continue reading

(Reuters) World food prices rose in October, spurred by weather-driven concerns about sugar and palm oil supplies, but remained well below their equivalent level a year ago, the United Nations food agency said on Thursday.

The Food and Agriculture Organization's (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 162 points in October against 155.9 the month before.

The FAO said this was the sharpest increase since July 2012, although food on international markets in October was still 16 percent cheaper than a year earlier. ...continue reading

(Bloomberg) Despite torrid weather and virtually no rain, the world’s largest oil producer once grew so much of the grain that its exports could feed Kuwait, United Arab Emirates, Qatar, Bahrain, Oman and Yemen. The circular wheat farms, half a mile across with a central sprinkler system, spread across the desert in the 1980s and 1990s, visible in spring to anyone overflying the Arabian peninsula as green spots amid a dun sea of sand.

The oilfields remain, but the last wheat farms have just disappeared to save the aquifers supplying them. For the first time, Saudi Arabia will rely almost completely on wheat imports in 2016, a reversal from its policy of self-sufficiency. It will become a full member of the club of Middle Eastern nations that, according to the commodity-trade adage, "sell hydrocarbons to buy carbohydrates." ...continue reading

(Dean Mead) Florida growers are justifiably proud that their products fill the fresh fruit and vegetable bins of supermarkets across the country during the winter months. I’d like to propose that if we had the infrastructure, more of Florida’s agricultural products that are wasted or never grown could also go into natural fruit and vegetable drinks and food products that are processed!

Historically, Florida’s agricultural production (other than citrus) has focused primarily on the fresh fruit and vegetable markets for limited time periods when high value returns can be obtained for being counter-cyclical (able to produce when other parts of the country are not) and to take advantage of its close proximity to urbanized Northeastern population centers. Other states and countries have been the primary supplier to fruit and vegetable processors, ...continue reading

(Barron’s) A decades-old government crop report, combined with the very latest data from NASA, seem to indicate that there will be poor growing conditions and lower grain yields over the next few years. As a result, traders should expect prices for wheat and corn to rise.

The report from the U.S. Department of Agriculture, published almost four decades ago, studied crop yields in the U.S. from 1866 to 1973. The paper, “Do Sunspot Cycles Affect Crop Yields?” by Virden Harrison, an agricultural economist with the commodity economics division of the USDA’s economic-research service, matched historical crop-yield data for wheat, corn, rice, and cotton with sunspot activity. And National Aeronautics and Space Administration forecasts for sunspots forming on the solar surface suggest that the sun is commencing lower activity that will last for the next five years.

THAT’S BAD NEWS FOR growers because historically fewer sunspots are associated with colder weather and lower crop yields. It has only recently become apparent that the solar cycle hit its peak last year, with the sunspot count in decline since then. “Sunspots are a proxy for the total solar effect,” says Joe D’Aleo, chief meteorologist for agriculture at Weatherbell Analytics. The activity manifests itself as more, or less, ultraviolet radiation, cosmic rays, and geomagnetic activity, all of which act as “magnifiers” to warm, or cool, the planet, he said in a 2014 white paper for INTL FCStone.

It’s worth noting that there are plenty of skeptics who would disagree as to how much alterations in solar activity affect temperatures around the globe and if there is any causation between sunspots and weather. Whether it’s a coincidence is irrelevant for investors as long as the correlation holds, which it has for some time now.

In fact, says Don Coxe, of Coxe Advisors, “It’s a coincidence that has occurred consistently since Galileo’s time.”

Broadly speaking, fewer sunspots, as NASA is projecting, mean chillier weather. That results in lower crop growth and reduced yields. “On the basis of this [forecast for fewer sunspots], we feel the chances of having the kind of growing weather we have had recently is decreasing,” Coxe adds.

HE SAYS THAT THE actual effect partly will depend on where you are on the globe. Most of the world’s grain is produced within northern climates.

How much lower could the yields fall in the downward part of the cycle? A substantial amount, if the findings in the 1976 USDA paper still hold. For instance, it found that the yield of Texas wheat dropped 7% during periods of fewer sunspots. Likewise, corn yields in Illinois were lower by 8%. Both declines were found to be statistically significant, according to Harrison. Other crops and locations were found to show reductions in yields, but weren’t statistically meaningful.

D’Aleo expects the effects of the sunspot cycle to be gradual, with the “big effect later this decade,” when he sees cold weather lingering into spring.

Contracts for soft red winter wheat recently traded at $5.22 a bushel, while those for corn fetched $3.82 a bushel, both on the CME.


(Bloomberg) After aggravating some investors for rebuffing a $47 billion approach from Monsanto Co., Swiss agrochemical maker Syngenta AG has the chance to take merger matters into its own hands following the departure of Chief Executive Officer Mike Mack.

With Dow Chemical Co. considering a sale of its agrochemical and seeds business and rival DuPont Co. increasingly seen as a breakup candidate, the new management may lead Syngenta to take an active role in consolidation after being a target, analysts said. Chief Financial Officer John Ramsay has been named as an interim replacement.

“With a Monsanto bid off the table, that leaves Syngenta in the role of a consolidator,” said Jonas Oxgaard, an analyst at Bernstein. Syngenta could move to acquire the Dow business, he said. ...continue reading

Corn harvest across the Corn Belt has progressed quickly over the past several weeks. Dry weather throughout the Midwest has expedited the in-field drying process allowing farmers to move quickly through their fields. The picture below was submitted by a reader in eastern Wisconsin.

POW 10-23-15 (800x600)

Remember, we are always looking for agricultural pictures or videos from anywhere in the world. Submit your pictures or videos to farmlandforecast@colvin-co.com