3 Big Things Today, October 19
1. Grains, Beans Little Changed Overnight on Strong Demand, Harvest Pressure
Grains and soybeans were little changed overnight as investors see strong demand yet worry about harvest pressure.
Demand for U.S. supplies of corn, beans, and wheat has been robust so far in their current marketing years.
Since the start of September, the beginning of the 2016-2017 marketing year for corn and beans, corn sales are up 85% from the same time frame a year ago, and bean sales have gained 28%, according to the Department of Agriculture. Wheat sales since the start of the marketing year on June 1 are up 26% from the same period in 2015, government data show.
Dry weather in much of the Midwest will keep the harvest rolling, however, which is keeping a lid on prices. Corn was 46% harvested as of Sunday while soybeans were 62% collected, according to the USDA.
Corn futures for December delivery fell 1½ cents to $3.52¼ a bushel overnight on the Chicago Board of Trade.
Soybeans for November delivery rose ¼¢ to $9.72¾ a bushel in Chicago. Soy meal futures for December delivery fell 60¢ to $302.80 a short ton, and soy oil rose 0.14¢ to 35.21¢ a pound.
Wheat futures for December delivery fell 2½ cents to $4.17½ a bushel in Chicago, while Kansas City futures lost ¾¢ to $4.21 a bushel.
2. Benefits of Precision Agriculture Vary Based on Farm Size, Technology
The benefits of various types of precision agriculture are debatable, but a new study from the Department of Agriculture’s Economic Research Service said GPS mapping has the largest impact on operating profit, followed by guidance systems and variable-rate technology.
GPS mapping, including yield monitors and soil and yield mapping, was shown in the study to increase operating profit by almost 3% on corn farmers, the ERS said.
That was followed by guidance, or auto steer, systems that improved profitability by about 2.5%, and variable-rate technology that raised profit on corn farms by 1.1%, according to the study.
The government report showed yield monitors were the most widely adopted precision agriculture technology, used on about half of U.S. farms, while guidance or auto-steer systems are used on about a third of farms. GPS-based yield mapping was used on about 25% of farms, and variable-rate technology was used on 16% to 26% of ag operations, the USDA said.
Not surprisingly, the largest farms – those with more than 2,900 acres – have double the adoption rate of precision ag technologies than the rest, the USDA said. About 80% of large farms use mapping, about 80% use guidance, and 30% to 40% use variable-rate technology.
“The share of all corn and soybean acres on which PA technologies are used tends to be higher than the share of farms, implying that larger farms are more likely to adopt these technologies,” the USDA said.
Oddly, adoption of some form of precision ag reduced labor costs by almost 70% on small farms from 140 to 400 acres, but increased labor costs on larger farms as the latter may use more information management and field-operation specialists.
“Precision agriculture technologies require a significant investment of capital and time, but may offer cost savings and higher yields through more precise management of inputs,” the USDA said.
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3. Temperatures to be Warm in Eastern Midwest; Cool Front Moving In
Temperatures are expected to be warmer than normal in much of the eastern U.S. through today before giving way to cooler temperatures the rest of the week, according to the National Weather Service.
“A large dome of high pressure will allow temperatures to soar to 10°F. to 20°F. above normal over a large portion of the ... eastern U.S through Wednesday,” the NWS said. “Record-high temperatures are possible with highs expected to reach the 80s and 90s.”
Much of the central Midwest is already experiencing the cooldown with temperatures in the 60s and 70s.
Little rain is expected in most of the region today, though parts of Missouri could see showers and thunderstorms develop this morning, the agency said. Along with rainfall, there’s a risk of large hail and strong winds.
The rest of the week will bring a dry and cool weather pattern to much of the region. Some rain is forecast for parts of Missouri and southern Illinois starting early next week, the NWS said.
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