ALL EYES ON U.S PLANTING PACE

Corn bounced off of the chart support area Friday helped out by early bean strength and noon weather maps, which were not quite as clear as seen yesterday. Morning weather maps did not offer a large amount of rain, but the noon run did add some rains for Missouri, Kansas, and parts of Nebraska again. Trade will once again react much more to the Monday map updates than to anything seen today. While there seemed to be limited concern this week about the planting pace we could see support on Monday as trade gets a bit more concerned right before seeing the actual number Monday afternoon.

Let's remember that this week was supposed to be one of the two most active planting weeks for spring. To keep pace with the 5-year average we would need to see 18% more of the corn planted on Monday. While trade may not seem very concerned about meeting that pace on a Friday, we could see a change of opinion to start next week.

By the end of the day July picked a very middle of the road price, which seems fitting given that trade is likely just not sure what to expect from planting pace this week. Short-term let's expect trade to react to Monday's weather maps as well as pre-trade what they will expect for planting pace. We also can expect some pre-trading of Wednesday's Supply/Demand report. Analysts are not expecting a shocking report but given that it will offer the first new crop estimates there could be a reaction if that number is off from the expected 2.120 number.

Bulls

• There is reason to be concerned about this week's planting pace number on Monday given that meeting the 18% normal pace could be difficult.
• Bulls can continue to expect support in the mid 360's unless Wednesday's report offers a shocking large carryout number.
• There is a possibility that USDA could raise their ethanol demand number on Wednesday given the continued strong weekly reports.

Bears

• Bears will be looking for a highly productive weekend of planting in order to keep planting pace at the 5-year average.
• Wednesday's new crop carryout number has the ability to truly surprise trade, bears will obviously be looking for a high starting yield number.
• Bears should look to sell any bounce into the 370's again looking for the active resistance to be seen at the same levels again.
   

Rich Nelson | Allendale Inc. | 815-578-6161
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WHEAT, CORN FUTURES CLOSE HIGHER ON INCLEMENT U.S WEATHER.

Wheat futures closed higher on Friday amid concerns about the health of the hard-red winter wheat crop.

As much as 2 feet of snow fell in parts of Kansas last weekend, burying fields and causing lodging or frost damage in many western counties. The Kansas Wheat Tour, which recently wrapped, pegged yields at about 46 bushels an acre, but participants said they expect the final count will be closer to 40 bushels an acre due to the adverse weather.

The snow was extremely wet and heavy, which may have caused plant stems to bend or snap, said Dave Green, the executive vice president of the Wheat Quality Council, the organization that hosted the event.

Corn futures finished higher as a wide swath of land stretching from Oklahoma to Ohio is under flood and flash-flood watches or warnings, and more rain is expected in some parts of Indiana on Friday, according to the National Weather Service.

"The weather continues to be a concern for the trade especially with a weekend coming up," said Tomm Pfitzenmaier, the president of Summit Commodity Brokerage in Des Moines. "The fear is that if there is any change in the forecast it won’t take much rain to chase farmers right back out of the fields. With the risk of summer weather still being an unknown, it seems unlikely that the trade will want to press the short side too hard for a while."

Wheat futures for July delivery rose 5 cents to $4.42 3/4 a bushel on the Chicago Board of Trade. Kansas City wheat added 5 3/4 cents to $4.50 1/4 a bushel.
Corn futures gained a nickel to $3.71 1/2 a bushel in Chicago.

Soybean futures for July delivery finished down 1/2 cent to $9.73 3/4 a bushel. Soymeal lost $1.50 to $317.10 a short ton, and soy oil added 0.47 cent to 32.97 cents a pound. BY SUCCESSFUL FARMING STAFF.

''WE'RE NOT MESSING WITH THE RFS''USDA PERDUE TELLS IOWA FARMERS.

NEVADA, Iowa — Iowa farmers got their chance to hear first-hand from USDA Secretary Sonny Perdue about his intent to preserve the U.S. ethanol industry and promote trade.
In an appearance at a cattle farm today in Iowa, Secretary Perdue told a crowd of farmers, lawmakers, and members of the agricultural industry, that the Trump Administration will not mess with the Renewable Fuels Administration.

Aside from visiting the state to hunt and take part in the outdoors, the Georgia-native made his first visit to Iowa, following an order from his new boss.

“President Trump wanted me out here to let you all know that he understands American agriculture and that it is vital to the U.S. economy. And he understands that Iowa is vital to U.S. agriculture,” Perdue says.

Perdue adds, “As farmers, we need to be better communicators, but farmers are definitely part of our national security.”

The new USDA leader stressed that no longer can farmers just be good producers; they have to tell the nation that the food is safe and their animals are treated well.
“We’re going to make sound science, fact-based, data-driven decisions. Because that is what works in agriculture,” says Perdue. "At the same time, we should be unapologetic in agriculture.”

Ethanol

Iowa farmers were waiting to hear what the Trump Administration is going to do with the ethanol industry and the renewable fuels standard. Secretary Perdue wasted no time putting the farmers' minds at ease.

“I work for a guy named Donald J. Trump. Did you hear what he said during the (Presidential) campaign. He said that renewable energy and ethanol is here to stay. And we’re going to look for more technology to make it more efficiently. Many people think there is still a subsidy involved today. This is a mature industry and continues to grow and thrive. I look forward to giving the President new ideas from the renewable fuel standards and other things that can help the industry do better,” Perdue says.

Trade

When addressing the topic of trade, Perdue reminded Iowa farmers that the state’s efforts to reach out to China in 1984 are still paying off in 2017.
“Hosting China’s delegation back then made a great impression on the now leader of the second largest economy in the world. It’s relationship building like this that makes it easier for us to go tell people around the world about U.S. products.”
The Chinese want Iowa beef and the U.S. is going to sell it to them, Secretary Perdue pledged.
"He (President Trump) instructed me to send him a letter about getting beef into China and Japan. He will put a personal note on these letters and get them to the leaders of those countries. He has my back,” Perdue says.
“We have built trust and we’re going to convince people around the world about the quality of our beef. So, you grow it (beef) and we’ll sell it,” Perdue adds.

Conservation Red Tape

Iowa farmers also asked Secretary Perdue if he plans to make it easier for farmers to participate in conservation programs.
“I’m on it,” Perdue says. "When you go in to meet with the Farm Service Agency office, NRCS office, crop insurance folks, we shouldn’t put you under an interrogation at every point. It ought to be a stop-shop so you can go home and put that seed in the ground."

Solving NAFTA

When asked how long it will take to settle the North American Free Trade Agreement (NAFTA) disputes with Mexico and Canada, Secretary Perdue reiterated that President Trump has a plan and that he’s working it.
“Like President Trump said last week, we are going to give these countries involved in NAFTA time to figure out a way to make this trade agreement more fair and balanced for all countries involved,” says Perdue.

Perdue’s Priorities

Between NAFTA, expected USDA budget cuts, the construction of a new farm bill, and naming new subcabinet members, Secretary Perdue told reporters that he is focused on the building blocks of a better USDA.
“We want facts-based, data-driven, customer-focused, ethics, transparency, and integrity in this agency. I’m focused on making the USDA the best managed and most effective agency for the American taxpayer in all of the United States government,” Perdue says. BY MIKE MCGINNIS.

SYMBIOTIC BACTERIA: FROM HITCHHIKER TO BEETLE BODYGUARD.

An international team of researchers have discovered a remarkable microbe with a Jekyll and Hyde character. The bacterium Burkholderia gladioli lives in specific organs of a plant-feeding beetle and defends the insect's eggs from detrimental fungi by producing antibiotics. However, when transferred to a plant, the bacterium can spread throughout the tissues and negatively affect the plant.

Microbes are not always hostile players when interacting with animals and plants, they can also be powerful allies. In fact, transitions between antagonistic and cooperative lifestyles in microbes are likely not an exception, although such shifts have rarely been observed directly. In a new study published in Nature Communications, researchers from Johannes Gutenberg University Mainz (JGU), the Max Planck Institute for Chemical Ecology and the Leibniz Institute for Natural Product Research and Infection Biology -- Hans Knöll Institute (HKI) -- in Jena, and the Universidad Estadual Paulista in Rio Claro, Brazil, gathered evidence for such a transition.

Beetles outsource offspring protection to a bacterium
Like many other insects, a group of herbivorous beetles, the Lagriinae, is in great need of an efficient defense. They lay their eggs on humid soil under leaf litter, where encounters with mold fungi are guaranteed. Researchers lead by Professor Martin Kaltenpoth from Mainz University have now discovered that the presence of a special bacterium, Burkholderia gladioli, on the eggs of the beetle Lagria villosa strongly reduces the risk of fungal infection and helps them survive. "Even when we applied mold fungi to the beetle's eggs, those with their symbiotic microbe present remained clean, whereas those without were often overgrown by a lawn of fungi," said first author Dr. Laura Flórez, who performed the experiments for her PhD project at the Max Planck Institute for Chemical Ecology in Jena, describing one of the key findings. Although some other insects also rely on microbes for protection against natural enemies, a microbial defense of the vulnerable egg stage was unknown.

Newly discovered antibiotic agent resembles a plant defense compound
How is the protection of the nutrient-rich beetle eggs achieved? Chemical analyses revealed four different antibiotics produced by the beetle's microbial bodyguards. While two of these were already known, the other two molecules had not been described before. "We were particularly surprised to find a new chemical that looks much more like a plant defense compound than a bacterial antibiotic," said Professor Christian Hertweck from the Leibniz Institute for Natural Product Research and Infection Biology, who guided the chemical analyses. All four compounds inhibited the growth of other microbes; some were active against fungi, others against bacteria. This chemical armory likely shields the beetle's eggs from a broad spectrum of detrimental microbes.

The insect's friend, the plant's foe
Surprisingly, the beetle's allies are very closely related to plant pathogens. And indeed, when the scientists applied the bacteria to soybean plants, a common food source of L. villosa beetles in nature, the microbes spread throughout the plants. There they had a negative impact as the infection resulted in the production of fewer beans as compared to control plants. But do the bacteria actually have a chance to leave the beetle and infect the plant in nature? An additional experiment demonstrated that they do. After beetles were confined to soybean leaves for three days, the bacteria genetic material could be detected in the leaves. That this is likely relevant in nature is shown by an analysis of five related beetle species: all contained Burkholderia gladioli strains, but these were more closely related to other environmental or plant-associated Burkholderia gladioli strains than to each other. Thus, the bacteria likely hitch a ride on the beetles to jump from plant to plant.

Insect symbiosis as a treasure trove of antibiotics
There are many described cases of insects that carry microorganisms between plants. "What is interesting in the Lagria beetles is that their bacterial hitchhikers have turned into chemically-armed bodyguards," explained Professor Martin Kaltenpoth. In addition, the ability of this bacterium to produce previously unknown bioactive compounds highlights partnerships between insects and microbes as promising sources of novel antibiotics that may help to fight increasingly resistant human pathogens. SOURCE: UNIVERSITY OF MAINZ.

WEATHER EXTREMES AND TRADE POLICIES WERE MAIN DRIVERS OF WHEAT PRICE PEAKS.

Price peaks of wheat on the world market are mainly caused by production shocks such as induced for example by droughts, researchers found. These shocks get exacerbated by low storage levels as well as protective trade policies, the analysis of global data deriving from the US Department of Agriculture shows. In contrast to widespread assumptions, neither speculation across stock or commodity markets nor land-use for biofuel production were decisive for annual wheat price changes in the past four decades. This finding allows for better risk assessment. Soaring global crop prices in some years can contribute to local food crises, and climate change from burning fossil fuels and emitting greenhouse gases is increasing weather variability.

"Food security to a large extent is a matter of prices, hence our interest in understanding what drives variations from one year to another," says lead-author Jacob Schewe from the Potsdam Institute for Climate Impact Research (PIK).

When global wheat prices, along with those of other staple crops, skyrocketed in 2007/08 and again in 2010/11, poor people in many developing countries suffered from that -- these temporary price rises have even been linked to food riots in several countries. "These recent peaks, as others, have been preceded by severe droughts that reduced crop production. Now we can show that such weather-induced shocks have the potential to induce strong price increases," says Schewe "Moreover, they can trigger protective trade policy responses, including hoarding or export bans, which further exacerbate the global effects of production shortfalls even though they may seem rational from a country's point of view. This happened during the recent price peaks."

Commodity speculation turns out to be just a minor factor for annual prices
"While cross-market speculation might further exacerbate the problem on monthly or shorter time-scales, the data indicate that in the end it was a minor factor for annual prices," adds co-author Christian Otto. This is despite the fact that the sudden price increase in 2007/08 coincides with speculation by index funds driven out of the collapsing US housing and stock markets.

The researchers developed and applied a rather simple computer simulation of wheat markets. By comparing the results to observation data from past years, the scientists checked that the computer simulations fit reality. Importantly, the factor of supply and demand from storage -- also based on existing data from markets -- is integrated in these calculations. The simulation model could be applied for assessments of future wheat price fluctuations under climate and land use changes.

"This informs us what can be done to limit food price peaks in the future"
"The good news: Our study helps to understand what can be done if we want to limit food price peaks in the future," says Katja Frieler, co-author of the study and vice-chair of PIK's research domain Climate Impacts and Vulnerabilities. "First, besides improving productivity experts can seek to carefully adjust trade policies as well as storage capacities. Second, stabilizing the climate by reducing greenhouse gas emissions is key if we want to limit the risks of weather extremes across the globe."BY POTSDAM INSTITUTE FOR CLIMATE IMPACT RESEARCH.