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Market Commentary

Afternoon Comments 05/17


Continuing tightness of old crop supplies apparently sent nearby soybean futures sharply higher Friday despite the negative export demand implications of the rallying U.S. dollar. The greenback advance may also increase the chance of soybean imports during the days and weeks ahead. Deferred futures also rose despite the prospect of rainy Corn Belt weather over the weekend (and, ultimately, the potential for late-season switching to soybean plantings). July soybeans jumped 21.0 cents to $14.485/bushel at its Friday close, while July soyoil was steady at 49.52 cents/pound, and July soybean meal leapt $10.2 to $425.1/ton.
Market Info

July drought and soybean prospects

Emerson Nafziger, University of Illinois  |   July 30, 2012
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click image to zoomA July 17 photo of soybeans in 30-inch rows planted on April 19 at Perry, Illinois. Rainfall since June 1 has totaled less than 1 inch, resulting in plants with a narrow canopy. With drought continuing to worsen through mid-July and no real relief in sight, crop ratings continue to decline, with only 11% of corn and 17% of soybean crops in Illinois rated as good or excellent on July 15. Corn crop prospects continue to decline with loss of leaf area and poor or failed pollination. Leaf color and area continue to decline, accompanied by a decline in yield potential.

While we remain more optimistic about soybean prospects than about corn, soybean yield potential is beginning to decline as time goes on without enough water to keep plants functioning well. Soybean plants in dry areas are short, and size of leaves and petioles has been reduced as well, both consequences of the ongoing lack of available water to expand cells. The result has been plants with a narrow canopy, which in wider rows means that plants are unable to join canopies across the rows (see photo below). This means a reduced ability to intercept sunlight, which will lower yield potential.

A soybean plant from the plot at Perry, its leaves removed to show stem and pod development. Both internodes and stem length are shortened. Lack of pod formation is a more pressing problem than narrow canopies, at least in early-planted fields. A plant from the plot at Perry, its leaves removed to show nodes and pods, is shown. Note the shortened internodes--only 1.5 to 2 inches long--and the short stem length. Flowering on this crop began in mid-June, with little or no pause during the longest days (around June 20). By mid-July, pods should be abundant on these plants. Instead, the lower nodes have no pods set (see second of three photos below). Flowers on the lower four nodes have dried, and it is unlikely that the racemes (flower branches) at these nodes will be able to develop any pods. As stress continues, racemes above these will also dry up, and pods will either not form or will drop from these as well.

The yield potential of stressed soybean plants lies in their ability to respond to rainfall by producing more nodes at the top of the plant, and then by flowering and setting pods on these nodes. Racemes on upper nodes have good numbers of flowers (see third of three photos above), and pods are forming at some of these upper nodes (see first of three photos above). But we expect many small pods to abort under hot, dry conditions, and as long as conditions stay this way, even larger pods may begin to drop off the plant.

The same plant from Perry, with the view enlarged to show the failure of pod formation on the lower nodes. As the number of "spent" racemes continues to increase under stress, pod number, and hence yield potential, will continue to decline. New racemes and pods that will form with rain can help to overcome some of this loss, but the lack of a full canopy will also limit the number of pods that can be filled. As is the case with corn, sugar supply in the soybean plant will ultimately determine yields. When the supply is short during flowering, pod numbers decline; when the supply is short during pod filling, then pods will drop early or, if they manage to stay on, seed size can be reduced.

Later-planted soybeans retain more flexibility in raceme, flower, and pod number compared with those planted early. This means that a return to better conditions may help the later-planted crop more than it helps early-planted soybeans. On the negative side, later-planted soybeans are even shorter, with fewer nodes than early-planted ones, and the root system is likely not as extensive as in the early-planted crop. But if stress is relieved by late July, it is possible that later-planted soybeans might set more pods and produce more yield than those planted in April.

click image to zoomRacemes on upper nodes of a soybean stem. To some, it might seem reasonable to try to protect yield potential through applications of fungicides, insecticides, and perhaps other products that promise to "relieve stress" in soybean crops. But when lack of water is such an overwhelming factor as it is in 2012, it is unlikely that any inputs (other than irrigation) will do much to help. While it is important to scout for and manage pests that can add to stress, there are few data showing that a crop under severe stress can have its physiology and yield potential improved by additives of any kind.


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