Tucker Talk: August 21

Corn

Values of corn, soybeans, and wheat fell today over worries of a weak China economy, ample production estimates on corn and soybeans, and heavy losses in the US stock market.  China, the number one economy in the world just a few years ago has seen some major stalling in economic growth.  This has led to devaluation in the Yuan (currency), a collapse in the country’s stock market,  and reductions in commodity imports into the country.  China has been working on increasing stocks of stored corn within the country for the past several years but the devaluation of the currency is increasing exports and having the opposite effect.

The Brazilian Real weakens as the US dollar strengthens and the gap between them is getting ever larger.  The result is a decrease in commodity exports from the US and an increase in exports from South America.  A line up can be seen of 82 vessels waiting at Brazilian ports for corn compared to 36 vessels last year.  South American analysts estimate corn exports up by 200 million bushels from last year.

John Deere and Company has issued a report estimating sales down by 25% due to lower commodity prices.  There is concern that land equity will soon collapse as values are 30% higher than they should be given the last two years’ commodity prices.

The Pro Farmer crop tour finished up today estimating US corn production at 13.323 billion bushel (USDA: 13.686 billion) with a yield of 164.3 bu/acre (USDA: 168.8 bu).  There is no doubt that Nebraska has a decent corn crop but there is still considerable risk of an early freeze in late September/early October.

Weather forecast models are predicting a strong El Nino that will rival, if not exceed, the El Nino in 1997 that continued into the late spring of 1998.  If this becomes reality the US may be looking at a 0.8 billion bushel increase in corn carryout in 2016 that will put even more pressure on prices.

Wheat

The wheat market is a bear.  The USDA estimated record high world carryout numbers in the supply and demand report on August 12.  This means that there is plenty of wheat in the world.  Spring wheat harvest is exceptional with unconfirmed reports of 15% protein and 60+ test weight coming out of the Dakotas.  US wheat is the last on anyone’s list when it comes to exports as both Russian, and the EU have cheaper wheat due to lower valued currencies.  The only hope for wheat prices is if there is some weather scare in either soybeans or corn that causes a rally and pulls wheat up.

Ergot in Wheat: A Brief Summary

Wheat infected with Ergot.

Introduction

We have seen a lot of ergot in the panhandle of Nebraska this year and we have been getting a lot of questions about it.  I wanted to write a some-what brief article about what ergot is, why it is important, and what can be done to manage for it.

Ergot is a plant disease in cereal crops and grasses caused by the fungus Claviceps purpurea.  The disease manifests itself as dark colored sclerotia (ergot bodies), replacing the seed or kernel of the infected plant.  The sclerotia are often black or dark purple with a white interior, vary in size, and are sometimes similar in shape to the infected plant’s kernel or seed.

Ergot as it appears on a head of wheat and in harvested wheat.

Consumption of infected grain causes a condition called ergotism in animals and humans and can cause a variety of symptoms that range from convulsions to gangrene.  Wheat is considered ergoty when it contains more than 0.05% ergot bodies by weight.  Most sclerotia can be removed by modern cleaning equipment however, if they are the same size as wheat kernels, it is more difficult and costly to clean wheat within acceptable levels using screening.

The images above contain a 500 gram sample of wheat. The one on the left has 0.088% ergot by weight and is illegal by USDA grading standards. The one on the left is the same wheat but has been cleaned with a screener and now has 0.04% ergot which is an acceptable level.

Host Crops and Grasses

Rye and some grasses are more susceptible to ergot infection due to the open pollination process of reproduction that allows easy access of the fungus to reproductive units within the plant.  Crops such as wheat and barley are less susceptible because they are self-pollinated but can be more prone to the disease if weather conditions are cool and wet during flowering.

Life Cycle

Sclerotia fall to the ground in the fall and survive on the surface until the following spring.  The sclerotia germinate and produce tiny mushroom-like bodies about the size of a pin which then burst to shoot spores into the air.  These spores are carried by the wind to grain heads where they infect the plant.

When an ergot sclerotia germinates it produces tiny mushroom-like bodies from which it releases spores.

When the ergot spores infect the plant they infect the flower and cause it to produce an ergot body (sclerotia) instead of a seed or wheat kernel.  About 5 days after infection, the floret excretes a sticky sap-like substance called “honey dew”.  This substance contains spores that can be spread to other florets by rain splash and insects.  The floret can excrete spores for as long as flowering occurs.

Infection by ergot can occur when sclerotia germinate or when a flower is infected.

Conditions

Ideal conditions required for sclerotia germination are a cold winter followed by wet soils in the spring.  Wet, cloudy and cool weather conditions during the period of flowering increase the window of infection for spores to enter florets.  Wet and cool weather conditions may also favor higher insect populations which help spread the spores.  Ergot has also been linked to copper deficiency in the soil which often occurs in sandy soils.

Control

Many factors have to occur in order for there to be widespread occurrences of ergot.  Unfortunately there is not much that can be done to control ergot in the field.  There has been limited to no success in spraying fungicide during flowering in order to prevent spore infection.  There has also been limited success in spraying fungicide in the spring in order to prevent sclerotia germination.  Prevention before an ergot infection occurs is the best management policy.

Management Strategies Include:

• Scout the field and harvest in parcels.  Ergot infection can be greater near the edges of the field due to infection from roadside grasses or neighboring fields.
• Rotate cereal crops with non-susceptible crops for one year or longer. Sclerotia usually cannot survive in the soil for more than 1 year.
• Deep plow fields to bury crop residue.  Sclerotia will not germinate if buried in 1″ or more of soil.  Sclerotia can over winter if they fall onto the ground so if you have ergot one year there is a good chance that there will be some the next year.
• Plant clean seed that is ergot free in order to avoid reintroducing fungus into the field.
• Eliminate wild grasses and rye that are susceptible to ergot infection before they flower.  This will reduce the amount of carriers and thus reduce the chance of crop infection.

If you want to read more about ergot here are a couple links to other articles.

http://www.agriculture.gov.sk.ca/ergot-of-cereal-grasses

Ergot

Tucker Talk: August 3

Wheat

Wheat has finally dropped to a level where the United States is competitive with the rest of the world.  However, the Russian Ruble keeps dropping in value so Russian wheat continues to get cheaper.  Russia is getting unwelcome rains during harvest which is lowering the quality of the wheat but they are still reporting better than expected yields.  Wheat quality is low in Ukraine and many areas of the United States which is increasing the amount of feed wheat in the market and undercutting corn offers.

Wheat is oversold and is due for a corrective bounce.  Spring wheat yield looking to be 5 to 15 bushel better than last year but disease potential is greater according to preliminary estimates from the Spring Wheat Crop Tour.

Corn

After an initial rally a couple weeks ago due to concern over acreage reduction and overall reductions in yield, the market has decided that beneficial weather is actually going to add bushel.  Iowa and Illinois had exceptional weather in July which has estimates of their yield being in the 180s to 190s.

Trade is now discussing how much old crop corn will be moved this year before harvest starts as farmers continue to hold on to old crop corn.  Buyers think that farmers will have to sell in order to make room for new crop but that may not be true.  An increasing number of farmers are saying that they have the storage to store last year’s crop as well as the new crop.  There is concern with stored inventory however.  Stored inventory has taken on moisture this year through condensation and temperatures have been too warm to run aeration fans.  Some producers may have to wait for new crop in order to mix with the old crop to improve the condition.