Seed Pain

Fri. Aug 26, 2016 12:47 PM


By Emily Unglesbee
DTN Staff Reporter

ROCKVILLE, Md. (DTN) -- Seed prices, and the companies that set them, have appeared stubbornly indifferent to the decline in commodity crop values over the past few growing seasons.

This past indifference -- and farmers' growing frustration over it -- may have changed, with some seed companies now re-examining their portfolios and pricing strategies.

Most of the larger companies are officially staying the course in 2017, but at least one brand, Dow AgroSciences' Mycogen Seeds, is throwing their old pricing model out the window for next year. For some smaller, independent companies, the answer is to trim the fat from their seed portfolios and brace for another lean year, in solidarity with their customers.

A STUBBORN INPUT

Before the advent of biotech traits, corn and soybean seed prices roughly followed the value of the crop -- when commodity prices were low, seed prices dropped to reflect it; when commodity prices rose, seed prices followed.

The development of genetically modified seeds, including herbicide-tolerant and Bt traits, in the mid-1990s disrupted that paradigm. Companies now had to seek returns on their multi-million-dollar biotech investments, regardless of grain prices, Tom Burrus, president of Burrus Hybrids noted. "Seed prices have gone up virtually every year since that time," he said.

The trend continued in 2016, even as commodity prices sank below many growers' breakeven points. In an annual survey of its growers, Granular, a farm management software company, reported that 2016 seed costs dropped only 1% from 2015 prices.

MYCOGEN MIXES IT UP

The trait-driven pricing strategy has dominated the industry for at least a decade, said Damon Palmer, general manager of Mycogen Seeds. "We're walking away from that," he told DTN. "We've developed new regional pricing zones, using data points on hybrid yield and performance from over five years. We're really trying to understand where each hybrid performs well and where farmers would see a return on investment."

The new value-driven pricing strategy will only affect the brand's corn line-up in 2017, Palmer said.

When growers examine their Mycogen corn options this fall, they'll find a streamlined system, he added. Within each regional pricing zone, farmers will find a maximum of eight different price points, down from upwards of 40 in the past. Those prices will reflect the regional value of each hybrid for a farmer -- and not necessarily the traits in that hybrid, Palmer said.

"For many farmers, having more traits doesn't necessarily mean high-producing hybrids, but that's usually what you'll see in pricing," he said. Mycogen will bring 30 new hybrids comprised of different trait offerings to the market this year, Palmer said. "But the pricing will be based on how that hybrid itself performs in that regional area and yield goals expected in that region, regardless of the trait package" he explained.

To calculate this new pricing strategy, the company analyzed five years of yield and performance data, culled from both USDA and the company's own test plots. They also consulted and worked with Rockney Walters, a marketing professor specializing in pricing at Indiana University's Kelley School of Business.

OTHER COMPANIES' STRATEGIES

Mycogen isn't alone in hoping to ease farmers' input burden in 2017. As an independent seed company that doesn't answer to shareholders, Burrus Hybrids has some flexibility in setting its price points each year, Tom Burrus said.

The company's 2017 corn line-up features 18 hybrids with a lower price point, six with a higher price point, with the rest remaining static, he said. Their 2017 soybean portfolio features no higher prices, he added. Ten varieties will be priced lower and the rest will stay stable.

Burrus has focused on picking only the traits and seed treatments -- a growing profit tool for seed companies -- that had clear yield benefits, which meant trimming potential revenue for 2017, the company's president said.

"Our margins will take a hit this year, but we're managing for the long run," he said.

Other companies, such a Pioneer and Monsanto, are mostly staying the course in their 2017 seed pricing.

Drew Porter, Pioneer's director of product marketing in the U.S. and Canada, said the company has broadened the range of prices in its corn and soybean portfolio in the past few years but made no major adjustments to their pricing strategy.

Monsanto's product communication's lead, Jeff Neu, echoed that sentiment, and added that "most existing products' pricing will be flat to down" in 2017. Both Neu and Porter stressed their financing options for farmers, such as 0% interest financing programs and early purchasing cash discounts.

While seed companies readily discuss overall pricing strategies with DTN, they declined to give specific dollar amounts for either various price points or the range of prices a hybrid would sell for in a value-based system.

All the companies contacted noted that demand for non-traited conventional corn and soybeans has been stable, and none expressed any intention of increasing the availability of untreated soybean seed or offering untreated corn seed. "We get questions about untreated seed, but it's a good place to spend just 1 bushel of yield to gain back 2 or 3," Burrus said. "It gives better protection from disease or insects, you buy 90% treated seed, and we furnish 100% free replant. It's a dang good investment."

LOOKING AHEAD

Cole Hansen, Mycogen's corn portfolio marketing leader, insists that this year's corn pricing strategy is not a short-term reaction to lowered commodity prices, but a long-term pivot back to the value-driven pricing model.

"We believe this approach will continue whether corn is $4 or $7, because it's more simply about maximizing return on investment in each field," Hansen said.

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

Follow Emily Unglesbee on Twitter @Emily_Unglesbee.

(GH/CZ)

DTN Distillers Grain Weekly Update

Fri. Aug 26, 2016 12:26 PM


By Mary Kennedy
DTN Cash Grains Analyst

The DTN average weekly DDG spot price was unchanged for the week ended August 25 at $122 per ton. Of the 37 locations DTN collects spot prices from, eight showed increases of $2 to $5 from last week, five locations reported decreases of $5 and the balance of the prices were unchanged. A trader told DTN that prices are steady to higher as there seems to be more demand this week than last and there is more interest in export tons this week, which also has helped demand.

Other traders told DTN it was a very quiet week with DDG price movement flat to a little firmer across the board with most plants well sold in the nearby and prices are flat through December as well. Another trader added that prices were steady this week as domestic demand continues to be good thanks to cooler weather helping to bump domestic consumption while exports remain steady.

Some of the buying interest seen the past week is also due to buyers squaring positions ahead of month end. Spot prices could remain firm through next week ahead of the Labor Day weekend.

CIF NOLA bids were steady to higher Thursday compared to one week ago with August unchanged at $167 and September up 2 cents to unchanged at $161 to $167 per ton. Informa Economics reported Wednesday that results of an investigation by China into imports of U.S. distiller's dried grains is expected to come soon from the Chinese Commerce Ministry, according to signals from U.S. trade and industry sources. "The investigation this time, as it did in 2010, resulted in a downturn in U.S. DDG shipments to China. USDA data indicate DDG exports to China dropped 25% between September 2015 and June 2016. But the U.S. industry opted to expand their export efforts to other markets, resulting in a 6% rise in total U.S. DDG exports over that period. The decline in U.S. DDG prices has helped make U.S. supplies more competitive on the world market, helping to offset the impacts from a fall in the level of U.S. DDG exports to China. However, it's not clear the rise in shipments has made up for the value downturn in the shipments to China. Given that U.S. ethanol producers have access to corn priced cheaper than domestic Chinese supplies available to their ethanol producers, U.S. DDGs are still competitive in the Chinese market."

The value of DDG relative to corn for the week ending August 19 was higher vs. the prior week at 105.60% and the value of DDG relative to soybean meal was higher at 37.62% vs. 36.97% last week. The cost per unit of protein for DDG was unchanged at $4.88, compared to the cost per unit of protein for soybean meal at $6.83, which was lower vs. the prior week of $6.95.

CURRENT PREVIOUS
COMPANY STATE 8/25/2016 8/18/2016 CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $135 $135 $0
Modified $65 $65 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $135 $140 -$5
Indiana Dry $130 $130 $0
Iowa Dry $115 $120 -$5
Michigan Dry $135 $135 $0
Minnesota Dry $115 $115 $0
North Dakota Dry $110 $115 -$5
New York Dry $125 $125 $0
South Dakota Dry $110 $115 -$5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $120 $120 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $125 $125 $0
Iowa Dry $115 $115 $0
Michigan Dry $120 $120 $0
Minnesota Dry $110 $110 $0
Missouri Dry $135 $135 $0
Ohio Dry $130 $130 $0
South Dakota Dry $110 $110 $0
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $118 $118 $0
Wet $40 $40 $0
Illinois Dry $145 $145 $0
Nebraska Dry $118 $118 $0
Wet $40 $40 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $130 $125 $5
Indiana Dry $125 $120 $5
Iowa Dry $115 $115 $0
Michigan Dry $125 $120 $5
Minnesota Dry $110 $105 $5
Nebraska Dry $112 $110 $2
New York Dry $125 $120 $5
North Dakota Dry $115 $115 $0
Ohio Dry $125 $120 $5
South Dakota Dry $110 $105 $5
Wisconsin Dry $115 $115 $0
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $130 $130 $0
Iowa Dry $110 $110 $0
Minnesota Dry $110 $110 $0
Nebraska Dry $115 $115 $0
Ohio Dry $130 $130 $0
South Dakota Dry $105 $110 -$5
California $185 $185 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $185 $185 $0
*Prices listed per ton.
Weekly Average $122 $122 $0
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 8/25/2016 $3.2350 $115.54
Soybean Meal 8/25/2016 $324.30
DDG Weekly Average Spot Price $122.00
DDG Value Relative to: 8/26 8/18
Corn 105.60% 102.20%
Soybean Meal 37.62% 36.97%
Cost Per Unit of Protein:
DDG $4.88 $4.88
Soybean Meal $6.83 $6.95

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

Follow her on Twitter @MaryCKenn

(CZ\SK)

Midwest Crop Tour Day 4 Wrap

Fri. Aug 26, 2016 9:11 AM


By Chris Clayton
DTN Ag Policy Editor
and
Pam Smith
DTN Progressive Farmer Crops Technology Editor

ROCHESTER, Minnesota (DTN) -- The overwhelming take-away from the 2016 Pro Farmer Midwest Crop Tour was it's a great corn crop, but probably not a record.

Tour scouts expected to see a bumper corn crop based on USDA's August national average estimate of 175 bushels per acre. Scouts saw a really good overall crop, but as the week wore on there were more and more doubts expressed by farmers and analysts on the tour about USDA's projected yield and 15.15 billion bushel production forecast.

If numbers from scouts released on Thursday are correct, Iowa corn yields won't be as high as USDA's forecast.

Three-hundred-sixty-seven corn samples in Iowa projected an average yield of 188.17 bpa. That was higher than last year's crop tour average, but nine bushels below USDA's latest forecast for the Hawkeye State.

Yields in central Iowa in particular were low compared to the potential state average. Central Iowa fields averaged 172.83 bpa, down about four bushels from the three-year tour average. Yields in southern Iowa counties were 20 to 22 bpa higher than the three-year tour average.

Minnesota was projected at 182.32 bpa, just slightly less than the government estimate of 184 bpa. However, the tour's Minnesota number is somewhat skewed because scouts only sample the lower tier of the state.

SOYBEANS

Soybean pod counts in Iowa came in close to last year's tour average. Scouts this week counted 1,224 pods in a three-by-three-foot area, which compares to the 1,219 average for the tour last year. The crop tour does not project soybean yields because the soybean crop is not as mature as the corn crop at this time of the growing season.

Pod counts in Minnesota on Thursday came in averaging 1,107 which is down from 1,119 measured by scouts last year and also below the three-year tour average.

Pro Farmer will release its national production and yield estimates on Friday.

Steve Fellure, a farmer from Attica, Indiana, and scout on the eastern leg of the tour, ran a route across south-central Iowa, shooting north and running parallel just west of Interstate 35 on Thursday. Fellure noted his route saw a good corn crop -- his team's samples in 11 counties averaged 191.5 bpa. But Fellure thought overall he was seeing a better soybean crop because of higher pod counts on his route.

"We're going to have a helluva bean crop," Fellure said. "The corn crop is going to be good, but the bean crop is going to be stronger."

Overall, Fellure said he believed from Indiana to Iowa the weather was conducive to good yields, just maybe not as high as USDA had pegged them thus far. "I've seen a lot of good corn yields and bean pod counts," he said.

LOOK BEYOND BEAUTY

Kurt Line, a farmer from Lake Village, Indiana, scouted crops on the western leg of the tour and said he's seldom been on a crop tour when the crop looked this good from the road. "Every state we covered on the west looked beautiful as you drove by it, with exception of some heavy weed infestations," he said. "However, you get out in those fields and it's a different story." Missing ears due to green snap or skips in stand were common. Scouts also found hail damage in nearly every western state sampled.

"These things were just enough to take the top end off many of the fields we looked at. It's a good crop, but we just didn't find the monster crop we were expecting."

A few fields in Minnesota were showing a tad bit of nitrogen stress, but for the most part fields exhibited excellent plant health and very little insect damage. It was more hidden factors due to weather issues that farmers might not see unless they scout which can put a lid on this crop.

Many farmers indicated a cold spring had caused emergence problems and that could be seen in the erratic ear set within a field. Those warm days and nights that never cooled down also led to tip-back in some fields.

Soybeans still seem to have plenty of potential, but adequate moisture had caused many to grow lanky. Recent rains were leading to some lodging and the onset of sudden death syndrome was beginning to show up in a few fields in Nebraska and was more prominent in Iowa and Minnesota.

Waterhemp was the most pronounced problem across the western states. Infested fields lined up next to clean fields and scouts could only guess that those farmers got pre-emergence herbicides down in a timely fashion.

RECAPPING THE WEEK

Some 100 scouts fanned out through the Corn Belt this week to measure the potential yields growing within approximately 1,400 corn and soybean fields stretching from Ohio to South Dakota. They measured plant populations, grain length, kernels around and recorded observations about crop maturity and crop health.

The tour is strategically placed between the August and September USDA reports, said Chuck Roth, general manager of Pro Farmer. "We're not trying to compete with USDA, but trying to supplement it with information," Roth explained.

In Illinois, scouts estimated an average corn yield of 193 bpa. USDA's forecast is 200 bpa. History shows scouts in general measure Illinois 1.5 bpa larger than USDA.

Indiana's estimate for corn was 173.42 bpa. USDA pegged the crop at 187 bpa. In the past, the crop tour has usually come in about 2 bpa smaller than USDA.

Nebraska's average corn estimate was 158 bpa. USDA's forecast is 187 bpa. Historically, the tour has sampled Nebraska about 15 bpa short because routes sample more dryland fields than irrigated.

Ohio had a tour average of 148.96 bpa for the cornfields sampled while USDA forecasts 163 bpa.

South Dakota's corn average on the tour was 149.78 bpa, just slightly more than USDA's 147 bpa.

To see photos from Chris Clayton and Pam Smith while they were on the crop tour, check here: www.facebook.com/dtnprogressivefarmer

Pam Smith can be reached at pam.smith@dtn.com

Follow her on Twitter @PamSmithDTN

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

Follow him on Twitter @ChrisClaytonDTN

(CZ)

Crop Tour Day 4 Midday Update

Thu. Aug 25, 2016 12:16 PM


By Chris Clayton
DTN Ag Policy Editor
and
Pam Smith
DTN/Progressive Farmer Crops Technology Editor

By Chris Clayton

DTN Ag Policy Editor

And

Pam Smith

DTN/The Progressive Farmer Crops Technology Editor

AMES, Iowa, and GAYLORD, Minn. (DTN) -- Scout teams from the eastern leg of the Pro Farmer Midwest Crop Tour fanned out Thursday morning on the last jaunt of the tour with mild weather conditions to pull samples.

DTN Ag Policy Editor Chris Clayton was on one of the longer tour routes on Thursday as his scout team moved southwest from Coralville, Iowa, through Iowa, Keokuk, Mahaska, Marion and Warren counties before turning north to get around Des Moines.

After six stops in south-central Iowa, the scout team's corn samples were averaging 196 bushels per acre. While the scout team crossed over multiple crop districts, the sampled fields generally were hitting higher yields than sample averages last year on the tour.

Pod counts in the six soybean fields in south-central Iowa sampled early Thursday were averaging more than 1,500 pods in a 3-foot-by-3-foot area, which was about 300 pods higher than the tour reported last year on those same crop districts. Still, soybean fields along the route also frequently showed signs of sudden death syndrome.

Meanwhile, scouts on the western leg of the tour headed into Minnesota Thursday morning to find a lush crop that had received recent rainfall. However, the green crop often looks different inside the field than from the road.

That's been the case on DTN/The Progressive Farmer Crops Technology Editor Pam Smith's route through southwest Minnesota Thursday morning where scouts sampled multiple fields that had hail damage that will take the top end off the yield in those fields. The eight fields sampled so far Thursday morning averaged 177.5 bpa for corn.

Soybean fields showed lots of potential on this route, with one field planted in 10-inch rows with a pod count of 2,362.9 in a 3-foot-by-3-foot square with several four-bean pods observed. The average for this tour so far was about 1,300 pods. Node spacing was good in many fields and beans were not quite as tall as scouts found in Iowa. There was also evidence of sudden death syndrome starting to show up.

Waterhemp remains to appear troublesome. However, nasty clogged fields were found next to clean fields.

The tour ends Thursday night in Rochester, Minnesota. Pro Farmer will then release its forecast for national corn and soybean production on Friday afternoon.

Pam Smith can be reached at pam.smith@dtn.com

Follow her on Twitter @PamSmithDTN

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

Follow him on Twitter @ChrisClaytonDTN

(AG/SK)

Looking Beyond Bt

Thu. Aug 25, 2016 7:36 AM


By Emily Unglesbee
DTN Staff Reporter

ROCKVILLE, Md. (DTN) -- A handful of scientists believe better corn rootworm control is closer than we think -- specifically, just under our feet.

Your average cornfield hosts an impressive array of life. Microbes, bacteria, fungi, nematodes and insect predators like spiders, mites and beetles can lurk in every square foot of soil. There's growing evidence they could be deployed against corn rootworm larvae.

"We need to fight fire with fire," said Jonathan Lundgren, an independent agroecologist and entomologist, who has been studying the natural predators of corn rootworm for more than a decade. "Corn rootworm is a very plastic and dynamic critter and we need to use something equally plastic and dynamic to fight it. Why not use what Mother Nature made a long time ago?"

While Lundgren has been studying how to encourage insect predator communities, Cornell University entomologist Elson Shields has spent the better part of his career successfully deploying local nematodes against the devastating alfalfa snout beetle in New York. He's now found that a combination of two nematode species may decimate rootworm populations.

Out west, University of Nebraska entomologist Julie Peterson, is helping her graduate student, Camila Oliveira Hofman, hunt down fungal diseases of insects (called entomopathogenic fungi) that infect and destroy rootworm larvae.

Success from these scientists would be a boon to corn growers. Western corn rootworm has evolved resistance to nearly every chemical and biotech tool deployed against it in the past few decades. Biological control options could supplement both Bt and the next generation of RNAi rootworm traits, and perhaps supplant some of them.

THE NEMATODE WHISPERER

Shield's beetle-eating nematodes are the ideal farm investment. Alfalfa farmers in New York inoculated their soil with them once, using an evening field surface spray that cost $26 an acre. Now more than a decade later, those nematodes are still completely suppressing alfalfa snout beetle populations in alfalfa fields.

Their taste for rootworm larvae was discovered when Shields turned his attention to how well the nematodes survived if farmers rotated out of alfalfa to another crop, such as corn. To his surprise, the nematodes not only survived the corn rotation, but their numbers increased. "Their increases appear to coincide with when we see rootworm move in," Shields said.

Two years ago, he inoculated a continuous corn field and a corn-soybean rotation field with the nematodes and set up some untreated and Bt-corn fields nearby. The 2015 season proved too light a rootworm year to collect data. But in 2016, rootworms gnawed away at corn roots in the untreated control, causing up to 1.9 nodes of damage, Shields said.

Fields with his nematodes performed exactly as well as the Bt fields, which were planted to Yieldgard, Herculex, and Smartstax hybrids. "The key is that the nematodes were applied two years ago," Shields marveled. "We've worked really hard at keeping those persistent characteristics in these populations."

Much more than one year of data is needed to confirm the nematodes' efficacy against rootworm, but the results are so promising others are jumping on board. Monsanto has funded a project with USDA scientists in Columbia, Missouri, to find strains of nematodes in the Midwest that target the rootworm.

Some of these soil nematodes are attracted to rootworm-damaged corn roots, so the goal of the funded proposal is to help control Bt-resistant rootworm populations by targeting damaged Bt-corn roots with them.

"We need two things," said USDA-ARS entomologist Bruce Hibbard, an advisor on the Missouri project. "We need strains that overwinter here in the Midwest, and we need to figure out how to maintain them for as long as possible. That might require some alternate sources of food, such as cover crops."

COVER CROPS: FODDER FOR ROOTWORM PREDATORS?

Lundgren has long promoted winter cover crops to suppress rootworm populations, though not specifically for nematodes. His research is focused on larger, more visible field warriors -- spiders, ants, centipedes, beetles and other insects.

Lundgren's work revealed that rootworm blood has a repellent quality that keeps many biting insects at bay. However, sucking insects like spiders and ants appear to feast on the rootworm quite happily.

Cover crops can lure these predators to your field, Lundgren says. His work in South Dakota showed that cornfields planted after a winter cover crop of slender wheatgrass had higher insect predator populations and less rootworm damage than fields that lay bare over the winter.

Researchers found populations of ants, beetles and other insects, many of them with bits of rootworm DNA in their tiny tummies. "Overall, we've identified dozens of predator species as being important consumers of corn rootworm," Lundgren said.

HUNTING FOR FUNGAL WEAPONS

Like Shields, Peterson and Hofman have been looking to the soil for rootworm solutions. For two years, Hofman dug up hundreds of soil cores from five irrigated cornfields in southwest Nebraska. She used a common fishbait insect called the waxworm to lure the fungi. When they infected her bait, she collected the fungi, grew them out in petri dishes and identified them. Now, armed with a library of local Nebraska fungal insect diseases, Hofman will see which ones attack rootworm larvae. The project is funded by the Nebraska Corn Board.

Peterson and Hofman also will test any promising fungal candidates against non-target insects to protect beneficial insect populations.

The biological organisms these researchers are working on may be rootworm solutions in and of themselves, but they are most likely to be supplements to the system in place, Peterson said.

"The great thing about biological options is they can be completely compatible with Bt traits," she said. "We can get less broad-spectrum insecticide use, which will help conserve these natural enemies."

Lundgren has even more ambitious hopes for biological rootworm control. He wants growers to stop seeing corn rootworm as a target for insecticides and other controls, but rather a warning sign.

"Corn rootworm isn't the problem, it's a symptom telling you something in the field is out of whack," he said. He believes corn monocultures planted year after year into tilled fields have banished the valuable inhabitants of fields and soils, and with them, the rootworm's natural enemies.

"We are creating our own rootworm problems by reducing biodiversity in our cornfields," he said. "When you have a diverse insect community, then rootworms aren't an issue anymore."

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

Follow Emily Unglesbee on Twitter @Emily_Unglesbee.

(GH\SK)

Kansas Cellulosic Plant to Sell

Wed. Aug 24, 2016 2:29 PM


By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- Abengoa Bioenergy's cellulosic ethanol plant in Hugoton, Kansas, could have a new owner by the end of October, an official with the company hired by Abengoa to sell the plant told DTN Wednesday in an exclusive interview.

Mark Fisler, managing director of Los Angeles-based Ocean Park Advisers, the company hired by Abengoa to sell the biomass-based ethanol plant that shut down as part of Abengoa's ongoing bankruptcy proceedings, said there will be an auction for the plant sometime in October and that he's "100% confident" the plant will sell.

"Hugoton has never been a part of the same schedule as the gen-one assets," Fisler told DTN.

"We're going to get out a bid seeking institutional letter to interested parties this week. The activity and interest level at the site are reasonably high. We expect to get a number of letters of interest. There has been more than 15 entities doing site tours, doing engineering work, studying how they would use the asset. It's been very robust. We've been pleased with the opportunities."

The plant, which was built at an estimated cost of $400 million, remains in "cold status at this point," Fisler said. The plant was in the middle of start-up when Abengoa's financial problems surfaced.

Fisler said he expects to receive letters of intent to bid by the first week of September. "We will negotiate and finalize a stalking-horse bidder and will have an auction the latter part of October," he said.

A stalking-horse bidder is the first bid in an auction and more or less sets a floor price for the auction.

"So they get to set the draft of the purchase agreement everyone else has to be subject to," Fisler said. "They get the preliminary inside track."

The interested buyers come from all around the world and from three main camps, Fisler said.

That includes from existing cellulosic ethanol development companies and from first-generation corn ethanol companies looking to produce "generation 1.5" ethanol and maybe use some of the cellulosic aspects of the plant for corn fiber.

The third camp includes advanced biofuels/bio-based chemical companies that may retrofit some of their existing technologies to the plant.

Fisler said the cellulosic ethanol plant still has a "very small number" of employees who remain connected to the site and would be employees with "sound institutional knowledge" about the technology.

"There are a variety of employees (a new owner) would have access to, whether the employees would be interested is a personal choice," he said.

The Abengoa plant is designed to use a variety of feedstocks, including wheat straw, switchgrass and even municipal solid waste. It was expected to provide an annual $17-million, 300-million-ton feedstock market for area farmers.

The 25-million-gallon Hugoton plant is designed to process about 1,000 tons a day of corn stover, wheat straw, milo stubble, switchgrass and other biomass feedstocks, all within a 50-mile range of the plant. The plant also is designed to produce electricity.

Earlier this week, Abengoa sold three of its ethanol plants to Omaha-based Green Plains Inc. during a recent auction. Green Plains bid $237 million to purchase plants in Madison, Illinois, Mount Vernon, Indiana, and York, Nebraska. The plants have an annual combined production capacity of 236 million gallons.

KE Holdings LLC made a successful $115 million bid to buy the Abengoa plant in Ravenna, Nebraska, while Kansas-based ethanol plant builder ICM Inc. was the high bidder at $3.15 million for the Abengoa plant in Colwich, Kansas. ACE Ethanol, LLC, was the successful back-up bidder on the Kansas plant, with a bid of $3 million. The Abengoa corn ethanol plant in Portales, New Mexico, so far has not sold.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

(AG/BAS)

DTN Retail Fertilizer Trends

Wed. Aug 24, 2016 11:45 AM


By Russ Quinn
DTN Staff Reporter

OMAHA (DTN) -- Retail fertilizer prices tracked by DTN for the third week of August 2016 show price declines accelerating in recent weeks. All eight major fertilizers headed lower compared to a month earlier and all but one fertilizer has seen significant price drops.

UAN28 is now 11% lower compared to the month previous; the liquid nitrogen fertilizer averaged $238 per ton. Potash, urea and UAN32 were all down 7%, with potash averaging $333/ton, urea $337/ton and UAN32 $285/ton.

Anhydrous is 6% less expensive compared to last month, and both MAP and 10-34-0 were down 5%. Anhydrous averaged $516/ton while MAP was at $471/ton and 10-34-0 was at $513/ton.

The only fertilizer without a significant move lower was DAP. The phosphorus fertilizer averaged $452/ton.

On a price per pound of nitrogen basis, urea averaged $0.37/lb.N, anhydrous $0.31/lb.N, UAN28 $0.43/lb.N and UAN32 $0.45/lb.N.

In a new report from Rabobank titled "Urea's 'New Normal,'" author Brenda Jiang, farm inputs analyst, wrote about China's efforts to build highly efficient and cost-competitive urea capacity, which is replacing marginal producers. Rabobank estimates that nearly 25% of Chinese urea capacity will be upgraded by 2020 and this cheaper product will secure the country's position in the global urea trade as well as put pressure on the world urea price.

China's urea production is structurally changing, Jiang wrote. Manufacturers are realizing cost reductions by putting facilities in areas with abundant coal or utilizing lower-grade, cheaper coal to produce urea.

"First, large-scale facilities are being developed in Inner Mongolia and Xinjiang, as production facilities are consolidating with large integrated coal-based chemical projects," Jiang wrote. "Second, thanks to improved coal gasification technology, facilities that have started operating in the past few years are able to use low-grade, cheaper coal to produce urea, thereby cutting costs."

Another reason for the changes in urea production in China is advances in urea production efficiency, due to improved manufacturing processes, facilities and technologies. Companies in 2015 are now able to produce ammonia (and thus urea) by using 40% less coal stocks, compared to a company in 2008, the report states.

Jiang wrote these changes will have an effect on the global urea market. China has placed a cap on growth, producing 81.5 million metric tons (mmt) of total urea capacity in the next five years. Rabobank estimates 21.5 mmt of new, low-cost capacities will replace old, high-cost capacities from 2014 to 2020.

"China's urea exports have accounted for 30% of global trade, while the country's export price remains at the low end of the global market," she wrote. "An improved cost structure enables China to export urea at consistently low prices, hence place a cap on a global price rebound."

DTN's survey of retail fertilizers show all are double-digits lower compared to a year earlier.

10-34-0 is now down 16%, UAN32 is 18% less expensive and both DAP and MAP are 20% lower. Both anhydrous and UAN28 are 23% less expensive, urea is 25% lower and potash is now 30% less expensive. After months of floating around 25% lower, this marks the first time potash has pushed 30% lower compared to a year prior.

DTN collects roughly 1,700 retail fertilizer bids from 310 retailer locations weekly. Not all fertilizer prices change each week. Prices are subject to change at any time.

DTN Pro Grains subscribers can find current retail fertilizer price in the DTN Fertilizer Index on the Fertilizer page under Farm Business.

Retail fertilizer charts dating back to November 2008 are available in the DTN fertilizer segment. The charts included cost of N/lb., DAP, MAP, potash, urea, 10-34-0, anhydrous, UAN28 and UAN32.

DTN's average of retail fertilizer prices from a month earlier ($ per ton):

DRY
Date Range DAP MAP POTASH UREA
Aug 17-21 2015 568 587 477 448
Sept 14-18 2015 563 579 462 432
Oct 12-16 2015 547 564 440 418
Nov 9-13 2015 547 561 426 405
Dec 7-11 2015 534 555 417 397
Jan 4-8 2016 495 521 392 381
Feb 1-5 2016 488 502 381 370
Feb 29-Mar 4 2016 476 492 373 374
Mar 28-Apr 1 2016 478 501 370 386
Apr 25-29 2016 476 502 366 386
May 23-27 2016 476 501 365 381
June 20-24 2016 470 495 358 366
July 18-22 2016 464 493 357 357
Aug 15-19 2016 452 471 333 337
LIQUID
Date Range 10-34-0 ANHYD UAN28 UAN32
Aug 17-21 2015 611 667 309 349
Sept 14-18 2015 593 653 300 345
Oct 12-16 2015 584 640 295 338
Nov 9-13 2015 581 631 289 332
Dec 7-11 2015 575 625 284 330
Jan 4-8 2016 572 582 273 316
Feb 1-5 2016 549 555 263 305
Feb 29-Mar 4 2016 566 537 260 309
Mar 28-Apr 1 2016 561 580 268 315
Apr 25-29 2016 560 587 274 321
May 23-27 2016 560 587 274 321
June 20-24 2016 554 567 265 305
July 18-22 2016 546 546 260 304
Aug 15-19 2016 513 516 238 285

Russ Quinn can be reached at russ.quinn@dtn.com

Follow Russ Quinn on Twitter @RussQuinnDTN

(MZT/BAS)

Midwest Crop Tour Day 2 Wrap

Wed. Aug 24, 2016 11:27 AM


By Chris Clayton
DTN Ag Policy Editor
and
Pam Smith
DTN Progressive Farmer Crops Technology Editor

BLOOMINGTON, Illinois and NEBRASKA CITY, Nebraska (DTN) -- Crop scouts on the Pro Farmer Midwest Crop Tour came into the week wondering if USDA's August estimates could be right. The second day of tour made that question even more pertinent as variable yields ruled the day in Nebraska. Conditions looked much better in Indiana than the previous year, but were still below USDA estimates.

Yield projections for Nebraska came in at a surprising 158.60 bushels per acre, down 4% from last year; USDA's August projection was 187 bpa. The tour measures the eastern half of the state and drew 258 samples total. The soybean crop was thought to have more potential. The tour found an average of 1,223.07 pods in a three-foot-by-three-foot square, which is almost exactly the estimate from 2015 and only a smidgen higher than the tour's three-year average.

While the western scouts might have been disappointed, scouts on eastern leg of the tour found a much bigger crop in Indiana than last year and much better yield forecasts than scouts sampled in Ohio.

Totals released Tuesday evening showed the 163 fields sampled by scouts in Indiana calculated an average yield of 173.42 bpa, up 21.3% from last year. Ear counts were 3.2% greater than the 2015 tour, grain length on the ears was up 12.8% and kernel rows on those ears were up 6.2% as well. However, Pro Farmer analysts pointed out that Indiana had a very poor year overall in 2015.

Indiana's estimated 173.42 bpa from the random samples this week also tops the three-year tour average of 165.11 bpa. Still, the tour's sample yield from Indiana remains below USDA's estimated 187-bpa yield for the state.

Crop sampling in Indiana began on Monday and carried into Tuesday for the 12 scout teams on the eastern leg. For soybeans, pod counts averaged 1,178.41 per field in Indiana, which is 7.2% higher than last year.

INDIANA GETS A DRINK

While pod counts were high, fields also were wet. Brian Grete, a Pro Farmer analyst and tour organizer, noted soil moisture was higher than on last year's tour. "We had a lot of muddy fields we sampled over the last two days in Indiana," he said.

Scouts on the tour headed into Illinois for the second half of their day. They described overall better conditions for crops in both Indiana and Illinois than they saw in Ohio on Monday. Yet the ground-truthing from the scouts also found corn borer damage and diplodia (corn ear rot) in spots, as well as sudden death syndrome and stem rot affecting soybean fields.

However, despite those problems, scouts noted overall they saw solid corn and soybean crops across Indiana. "We saw some pretty decent crops on our route," said Dick Overby, a veteran scout from Kenyon, Minnesota. "We saw 184 bushel average and a 1,400 pod bean count, which was respectable."

Daniel Periera, a market analyst from Geosys International in Sao Paulo, Brazil, said sampled yields from his route were above the three-year average in Indiana. Samples were also pulled from Illinois. Illinois data will be released Wednesday evening.

There was some 200 bushel-plus yield potential recorded. A field sampled in Cass County, Indiana, calculated out at nearly 223 bpa. Another scout team pulled a corn sample from Vermillion County, Illinois, that calculated out at 235 bpa.

WESTERN WOES

Roger Cerven, a Stanton, Iowa, farmer and one of the volunteers participating in the tour, put his Tuesday discoveries into perspective. "What did we see? All of the above," said Cerven. "Those fields look great from the road, but farmers might be surprised if they get out into that field to take a look."

Chip Flory, western tour director and Pro Farmer editorial director, said the tour typically measures Nebraska 15 bpa light since the state is 60% irrigated. The tour sample was 44% irrigated acres. Add that to the estimated yield and it still only brings Nebraska's total to 173.6 bpa. "I feel as though USDA went too far with that 187-bpa estimate," Flory said.

"I was severely disappointed with irrigated corn [in Nebraska] this year," Flory added. Dryland yield averages were above irrigated in some areas. Flory said he sees a lot of potential in the soybean crop. However, he said the beans still widen out between nodes more than is preferred. "I love to see irrigated Nebraska beans just over knee high with nodes just under two inches apart and loaded with pods.

"If you give soybeans water at the right time soybeans can still make [more yield]," Flory said. "A lot of the South Dakota soybean crop needs another drink if it's going to finish," he added.

Most of the Nebraska farmers coming to listen to the daily tour announcements said they think their soybean crops are potentially better than a year ago.

Jarod Creed, a scout and Gavilon grain analyst, said Nebraska stood out this year compared to last year in two main areas. "Green snap and no mud," Creed said. "The only water we saw standing was in the irrigation wheel track." Some fields had severe amounts of green snap.

Scouts noted that waterhemp was thick in many fields and western bean cutworms were feeding and causing damage on ear tips and sometimes deep in the ear. Scouts also noticed ear set height was erratic in many fields, signaling there had been early emergence problems.

On Wednesday the eastern leg of the tour continues through Illinois and into eastern Iowa, ending in the Iowa City area. The western leg moves into western Iowa and finishes in Spencer.

The results from Illinois will be released on Wednesday evening and are highly anticipated because USDA estimated Illinois could have a 200-bpa corn crop growing in the field.

Check here later for photo albums by DTN staff on Facebook from day 2 of the tour.

To see photo albums by DTN staff on Facebook from day 1 of the crop tour, go to:

Day 1 (West): http://bit.ly/…

Day 1 (East): http://bit.ly/…

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

Follow Chris on Twitter @ChrisClaytonDTN

Pamela Smith can be reached at Pamela.smith@dtn.com

Follow Pam on Twitter @PamSmithDTN

(CZ)

Some Viptera Claims Tossed

Tue. Aug 23, 2016 12:24 PM


By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- A federal judge last week dismissed claims made by a group of farmers in a class action lawsuit against Syngenta that the company should have done something to inspect and keep harvested Viptera and Duracade GMO MIR162 corn from being shipped to China.

The action was at least a partial victory for Syngenta. However, multiple lawsuits challenging the company on its handling of the GMO corn will continue, according to a legal expert who has been following the cases.

The U.S. District Court for the District of Kansas ruled negligence claims involving inspections are pre-empted by the Grain Standards Act. The 1916 act requires all grain sold in foreign commerce to be inspected and graded.

Donald L. Swanson, an attorney with Omaha-based Koley Jessen PC, LLO, who has followed and written about the case for Iowa State's Center for Agricultural Law and Taxation, told DTN the court's ruling removes one of numerous claims still to be adjudicated.

"They're moving this case along rapidly," Swanson said. "The ruling limits the claims. It does not terminate the lawsuit. This kind of legal wrangling is very typical. It is limiting the scope and focus of the case."

At present, the lawyers and judge in the case are taking part in the pleadings and discovery phases simultaneously, he said. The plaintiffs in the case have made numerous allegations of facts claiming multiple legal standards have been breached, Swanson said.

"Let's just say hypothetically there are a dozen claims made," he said. "The defendant is saying we want to limit the number of claims that go to trial. We're going to try to knock out one at a time. In this case, they were successful. This is for Syngenta, a partial victory."

The latest ruling also dismisses the separate claims of a group of farmers called the "Phipps plaintiffs" represented by Phipps Anderson Deacon, LLP based in San Antonio, Texas, who had their claims consolidated in the Kansas federal court. A number of other agribusinesses including Gavilon Grain, Archer Daniels Midland Company, Bunge North America, Cargill, Inc. and Louis Dreyfus Company, also had filed motions to dismiss the claims made by the same plaintiffs.

DTN's attempts to reach attorneys for the Phipps farmers were unsuccessful.

Syngenta faces an ongoing legal battle after developing MIR162 genetic traits marketed under the brand name Viptera and in Viptera/Duracade stacks. USDA deregulated the products in 2013 and Syngenta moved ahead to commercially sell the seeds even though MIR162 had not been approved in China. In November 2013, China began rejecting any U.S. corn exports that tested positive for MIR162. That went on until China eventually approved the trait in December 2014.

The official lawsuits filed on behalf of corn producers include cases in Alabama, Arkansas, Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, Texas and Wisconsin.

Plaintiffs have claimed Syngenta misled the public and made misrepresentations to the public and USDA concerning the status and likelihood of Chinese approval and their effects on export markets. Plaintiffs also claimed Syngenta's actions increased the risks of contamination and commingling of corn.

In a statement to DTN, Syngenta hailed last week's ruling as a victory.

"The Aug. 17 ruling in the Viptera China lawsuits significantly narrows the case against Syngenta," the company said. "For example, the ruling confirms that federal law bars 'any claim against Syngenta based on a duty to make sure that Viptera corn is segregated from other corn.' The court also agreed with Syngenta that 'there is no basis for Syngenta's liability based in false representations or omissions of fact in communications with plaintiffs,' and, therefore, rejected plaintiffs' claim for negligent misrepresentation.

"Although the litigation will continue to proceed, this is an important step forward as we continue to defend the rights of American farmers to have access to safe, effective, U.S.-approved agricultural technologies like Agrisure Viptera."

The goal for Syngenta in the legal proceedings, Swanson said, is to essentially eliminate all of the legal claims in the case, while the plaintiffs are working to put at least one claim before a jury.

Swanson said there remains a class of farmers in Minnesota pursuing a class action suit likely to play out in state court in Minnesota.

According to court documents there are about 2,375 cases involving more than 20,000 plaintiffs pending in the Fourth Judicial District of Hennepin County, Minnesota.

Although the case is "convoluted, complex and difficult," Swanson said, chances are there will be a number of trials before it is resolved.

"My sense is they're working at this hard," he said. "They have to work through pleadings and discovery then through some bellwether trials, actual jury trials- maybe a dozen of them - then there will be a resolution to the case."

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

(SK/AG)

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