NO BULL---- Song and Dance

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08/25/2022

SONG AND DANCE

Miss Independent

Holy cow, we have two-and-a-half going on 25 with Genevieve.

I will spare you the details, but we have reached the point she must do EVERYTHING on her own.

To top it off she came home with not one but two post-it notes detailing her bad behavior within the first week of school. I sense an innumerable amount of challenges ahead with this one!

Independence Day

Ukraine celebrated Independence Day Wednesday, marking the 31st anniversary of when the country voted to break from the Soviet Union.

This year's celebration was muted however, as Wednesday marks six months since the Russian invasion. 181 long days later, it appears as if neither side really has the upper hand, nor does either appear to be giving up.

Thousands of lives have been lost, 3.5 million Ukrainians have been left homeless and infrastructure damages exceed $108 billion, according to a study from Kyiv School of Economics.

Although the fighting has yet to let up, we did reach a milestone in July as the grain export corridor agreement was signed, allowing safe transit of exports from the Black Sea region.

Russian and Ukrainian officials met in Istanbul, Turkey for the signing. UN Secretary-General António Guterres and Turkish President Recep Tayyip Erdoğan signed the deal as well, marking an important turning point for conflict in the world's Breadbasket.

Five weeks after the signing, there have been dozens of vessels leave Ukrainian ports loaded with grain. In fact, it appears as if Ukraine has recently offered corn for sale on the world market, something buyers have not seen since February's invasion.

I like the image above because not only does it show that some vessel traffic has resumed, but it gives us all a nice little geography refresher.

Have you been wondering why Turkey's name keeps popping up in the headlines, facilitating discussions and hosting ceasefire talks? Take a look at the map. Turkey sits on the southern edge of the Black Sea where ships must transit its Bosphorus Strait before they can eventually make their way into the Mediterranean Sea to continue their journey.

Now you know, because I admittingly did not!

The Jitterbug

Actually, it's a weevil. This isn't your typical weevil though. While you will find it in a grain bin roaming around, this weevil is actually a farmer's friend.

The Grain Weevil is a bin management robot designed to tackle the dangerous tasks that would otherwise require bin-entry. This nifty little guy can break crusts, feed augers and level out bin contents. It prevents bin accidents by allowing you to avoid the tasks that pose risks from the moment you step foot inside the bin.

If you have been in the grain industry for any amount of time, chances are you know someone who lost their life in a bin. We all know it is dangerous, yet producers continue to do it as bin entry is generally unavoidable over the course of a crop year.

Kudos to the folks at Grain Weevil for this innovative robot that not only stands to make your life easier, but could save it as well.

If you are headed to the Farm Progress Show next week, you can see the Grain Weevil in action at Pivot Bio's Farm Next exhibit (#308).

The Grain Weevil is not available for purchase by the public yet, nor has pricing been disclosed but I can assure you we will be talking about this amazing robot more in the coming months.

Many thanks to Chad Johnson, Grain Weevil co-founder and CEO, for answering my questions earlier this week. As you may expect developing a robot with functional safety aspects is subject to all sorts of regulatory hoops before it can be mass produced, while costs will vary based on features in addition to bin diameter. 

Hopefully by this time next year (when you are emptying bins ahead of harvest), the Grain Weevil will be within reach. If you want to keep tabs on their progress, check them out on Twitter @Grain_Weevil or visit their website HERE.

On Top of the World

US yields have been top of mind this week as the ProFarmer tour rolls through the Corn Belt, capturing the attention of farmers everywhere as their findings generally come in below USDA's estimates. 

Before we take a deeper dive into USDA yields, let's see how we stack up against other major producers around the world.

If you are anything like me, sacks or bags, kilograms or metric tonnes per hectare do not mean much. In fact, doubtful you see hectare and immediately think 2.47 acres. 

Lucky for you - I have done the math. No doubt who earns the King Corn title as US yields tower above the rest. Check out Ukraine - they dealt with drought in 2020, followed by record-large production in 2021 only to be met with significant headwinds in 2022 after Russia's invasion.

Argentina holds its own, but poor Brazil brings up the rear. Keep in mind a significant portion of Brazil's production comes from double crop acres (aka Safrina), which weighs on overall yield as shown below (USDA FAS).

Yesterday Brazil's Conab released its initial estimate of 2022/23 full season yield - a whopping 102 bpa - a far cry from yields we come to expect here in the US.

Don't be so quick to laugh at Brazil though, because they are actually out-yielding the US when it comes to soybeans.

Gasp! Say it ain't so?!

Brazil actually passed us by in 2017/18, out-yielding American producers by ~3 bushels per acre. If the yields below are realized, this will be the 4th time in six years Brazilian soybeans have out-performed those grown in the US.

I feel like I am going to get some unsubscribes after presenting that little no-so-fun fact.

PS - I just stuck China on there for reference as they do not exactly have yields worth writing home about.

I Can't Get No Satisfaction

It seems overwhelmingly appropriate to name this next bit after a Rolling Stones favorite because after all, there isn't a producer out there ever satisfied with USDA's yield estimates.

From the Ag Outlook Forum's initial numbers in February that generally carry through to May's first stab at new crop S&Ds, to rare (but not impossible) adjustments in June and July, then surveys and everything but the kitchen sink in August, followed by objective yield results in September, October, November, capped off with a "final" yield in January that occasionally gets revised by the time the end of the marketing year (Aug 31) rolls around...

Yes, lots of yield adjustments and ample opportunities for the producer to be aggravated as USDA's numbers are always wrong, right?

Last week we looked at historical crop conditions versus final yield. Today, let's look at (often-unsatisfactory) yield changes, month-by-month:

Looking at these make the memories come flooding back...

Remember 2020? That whopper yield in August that went on a big downhill slide shortly after. What about 2017 and its record-cool August that worked some serious magic on the corn crop. Last year is worth noting as well, as corn started out at a 179.5 before falling nearly 5 bushels by the August report.

2016's initial estimate was 46.7 bpa which eventually turned into a record 51.9 final yield. Then in 2020 the August yield was massive as 53.3 bpa, up 3.5 bpa from July before falling more than 2 bushels to finish at 51.0 that year. 

And with beans - little changes can make a BIG difference to the bottom line, as far as ending stocks are concerned.

FINAL THOUGHTS
Song and Dance

'Tis the season for crop tours and yield estimates!

I could go on for days... the (different) methodologies, the (different) routes, the cherry-picking of fields and the quest to dominate headlines and social media with tip-back and low pod counts.

No offense to my friends affiliated with the ProFarmer Tour (who are on this mailing list and probably already offended), but I just hate these tours in general.

It ends up being the same ol' song and dance...

Farmer sees a yield lower than USDA and pictures of lackluster crops on social media.

Farmer gets bulled up.

Farmer fails to manage risk.

Farmer gets angry.

And so on.

Throw in a couple 'USDA disappoints' in there and voila - you have an entire marketing year that has came and went.

If there is one thing to remember about yield - IT IS THE DIRECTION.

Be mindful of the direction and consider the implications.

The smaller the crop gets, the higher prices likely go. The higher prices go, the more demand-rationing we will see because let's face it - $6.50 corn for extended periods of time isn't cheap - especially when Russia appears to be harvesting a record wheat crop (sanctions or no sanctions).

It is not my job to pinpoint a top just like it is not yours to get fixated on where that top may be.

If I spent my days trying to pick a high and you spent yours worrying if you were going to sell the high - we would both be wasting a considerable amount of time.

I was reminded of a fantastic quote while scrolling through the Van Trump Report earlier this week, so I will leave you with this:

I made a fortune getting out too soon.
-JP Morgan