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Weekly outlook

Soybean prices

[NOV. 26, 2002]  URBANA — The changing level and structure of soybean prices have implications for producer marketing strategies, said a University of Illinois Extension marketing specialist.

"In early October, low prices and a small carry in the market suggested that storing soybeans under the Commodity Credit Corporation loan program was a sound alternative," said Darrel Good. "Higher prices in late October suggested protecting the price of stored soybeans with put options. Now, the even higher prices and substantially inverted market suggest that soybeans should be sold in the spot cash market.

"The potential of higher prices could be captured with basis contracts, owning futures or owning call options. Owning call options is the most expensive of the three alternatives but has the advantage of capping the risk of lower futures prices."

Good’s comments came as he reviewed the recent record of soybean prices. January 2003 soybean futures have managed a significant increase since the early October low. From a settlement price of $5.29 on Oct. 9, that contract moved to $5.7575 at the close of trade on Nov. 20 and settled at $5.7175 on Nov. 22. The average cash price of soybeans in central Illinois moved from a marketing year low of $5.01 on Oct. 9 to $5.66 on Nov. 20 and finished last week at $5.605.

The central Illinois basis strengthened from minus 28 cents in early October to minus 5½ cents on Nov. 8 and then weakened to minus 11¾ cents on Nov. 22.

"Since early October, the structure of soybean futures prices has changed from a small carry to an inverse," said Good. "On Oct. 4, for example, July 2003 futures were 3 cents higher than Jan. 2003 futures. At the close on Nov. 22, July 2003 futures were 17 cents lower than January futures."

Good noted that higher soybean prices and the move to an inverted price structure have been driven primarily by the strong export pace for U.S. soybeans. As of Nov. 21, the USDA reported that 294 million bushels of U.S. soybeans had been inspected for export since Sept. 1, 2002. That total is only 6.4 percent less than the total during the same period last year, even though the USDA projects a 16.3 percent decline in exports for the entire marketing year.

"While shipments to the European Union are down about 29 percent from exports of a year ago, shipments to China are about 69 percent larger than shipments of last year," said Good. "Unshipped sales of U.S. soybeans as of Nov. 14 were nearly 16 percent smaller than outstanding sales of a year ago. Unshipped sales to the European Union were off by nearly 60 percent, but outstanding sales to China were nearly double those of a year ago."

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In addition to the higher-than-expected pace of exports, soybean prices have received support from a relatively slow pace of sales by producers and some level of concern about the progress of the South American crop, due to stressful weather conditions in some areas. The slow sales pace by producers contributed to the strengthening of the basis and the inverse in the futures market.

"So far during the month of November, January 2003 soybean futures have traded to $5.75 or higher on seven days but have been unable to move above the high of $5.795 reached on Nov. 5," said Good. "The price increase that began in early October appears to have stalled. The weakness in the interior basis last week suggests that producers have responded to higher prices with increased sales. The market may also be taking a timeout, waiting to see if large Chinese purchases of U.S. soybeans continue and/or weather concerns persist in South America."

The range in the average daily cash price of soybeans in central Illinois since Oct. 11 has been 65 cents, Good noted. Since the beginning of the 2002 marketing year on Sept. 1, the trading range for the spot cash price has been 88½ cents.

"The high prices of early September, however, reflected bids for old-crop soybeans," said Good. "Even so, history would suggest that the trading range of cash prices will be expanded before the 2002-03 marketing year is over. The marketing year range has been as small as 91½ cents in 1991-92 and as large as $5.03 in 1987-88.

"Over the past four years of large crops and low prices, the trading range has varied from $1.055 to $1.955. If $5.01 is the lowest price for the 2002-03 marketing year, history would suggest that the spot cash price will exceed $6 sometime during the 2002-03 marketing year. On the other hand, if a new low in that price series is to occur, history would suggest that it will likely occur in the spring/summer of 2003."

Good added that the market will continue to take direction from three major factors over the next six months. These are the rate of use of the 2002 crop, prospects for the 2003 South American crop and, later on, prospects for the 2003 U.S. crop.

[U of I news release]

[NOV. 26, 2002]  The Hartsburg-Emden FFA chapter is on a roll when it comes to career development events, or CDE’s. In the past two weeks, they have claimed two state FFA CDE titles.

The first victory was in the Agriculture Issues Forum. The team competed on Nov. 16 at Western Illinois University. Their forum, presented on the controversial issue of upgrading the locks and dams on the upper Mississippi and Illinois Rivers, gained them a trip to the 2003 National FFA Convention for competition. Team members include Matt Wrage, Kory Leesman, Kyle Hoerbert, Nick Alberts and Brittney Kavanaugh.

Hartem’s second title came on Nov. 23 at the State Food Science CDE. Team members worked together to create a product and nutrition label. They also competed on an individual basis in four areas: aromas, complaint letter, photo ID and a written exam. Team members include Krista Ubbenga (third high individual), Natalie Coers (fifth high individual), Alyssa Moehring (ninth high individual) and Brittney Kavanaugh. This team will also compete at the National FFA Convention in October 2003.

Hartsburg-Emden’s agriculture instructor and FFA adviser is Betsy Pech.

[News release]

Crop variety trial and
Christmas tree information

[NOV. 25, 2002]  The University of Illinois variety trial information is now available. You can get information from http://vt.cropsci.uiuc.edu/soybean.html, or you can get a paper copy about each crop from the local office at a cost of $2 each. These trial results are from the university plots and include multiyear results and statistical analysis.

We’re on the Web

Visit the Logan County U of I Extension home page for office information and a calendar of upcoming events in and around our county. The site address is http://web.extension.uiuc.edu/
cie/offices/index-t.cfm?oid=190.

Christmas tree selection and care

For many families, the Christmas tree is the main symbol of the holidays. Several have gone to the artificial trees because of convenience, allergies or other reasons, but many still prefer to get "the real thing" for their symbol. Here are some helpful hints to make your purchase and then keep your tree safely through the holiday season.

Freshness is the key to having an enduring symbol of the holidays. Freshness is directly related to the moisture content in the needles. Once the tree is cut, its life functions quit. However, if placed in water, it will continue to function much like a wick as it absorbs moisture through the stem. If adequate water is not available for the tree, the moisture content of the needles (moisture is lost by transpiration in your house) drops by about 35-50 percent. Trees that drop below 85 percent moisture will not regain their freshness.

When identifying a fresh tree, one obvious way is to cut your own (or observe it being cut). Many families make a ritual of selecting their own tree, and you know that it is fresh that way. If you buy from a "lot," you need to buy from a reliable dealer who can give information on how long the trees have been cut. You then need to determine freshness for yourself.

Fresh trees have needles that are relatively supple and firmly attached to the twigs. All trees will have brown needles that will fall, but the green ones are the ones that count! If the green needles tend to snap when bent between your fingers, the tree is probably quite dry. If temperatures are low (around zero), then all needles will snap since they are brittle. Fresh trees will have a fragrance to them. They also will have a waxy, natural green appearance, but some trees are sprayed with a needle colorant to make them more green.

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When caring for your freshly cut tree, start with trying to avoid hauling the tree over a long distance, where it will be exposed to the wind. Air moving across the needles is what actually dries them out. If you purchase your tree from a sales lot, buying the tree early will help ensure better freshness and selection. You can then take the tree home and give it the proper attention.

Once you get the tree home, you should make a fresh cut on the trunk of the tree, place it immediately in water and store it in a cool place (like your garage). Avoid putting the tree on the ground, since it could freeze in place and be difficult to move. The cut you make at home is important. You should make a straight cut to make it easier on you, and the tree will take up just as much water as if you made an angled cut.

Water is then the rule! Make sure your stand will hold enough water for your tree. A fresh tree may use up to two quarts of water the first 24 hours and up to a quart a day for the first week. You also have to have the water level above the cut surface of the trunk to keep your tree fresh.

When you locate your tree, make sure it is not by a fireplace, furnace outlet or other heat source, as they will dry it out. Closing a heat register in the area of your tree will help keep warm drafts from drying out one side of the tree.

A properly cared-for tree that was fresh to start with can safely be displayed in the home for at least two weeks. The tree is actually your best indicator. If needles start dropping and water use stops, there could be problems developing.

For more information on available varieties and locations of tree farms, try looking up the Illinois Christmas Tree Grower’s website: http://www.ilchristmastrees.com/.

Hopefully these tips will help you enjoy your holiday season.

[John Fulton]

Honors & Awards

[NOV. 13, 2002]  Logan County had its annual 4-H Achievement Night on Nov. 7 at the Lincoln Park District Rec Center. Approximately 115 4-H members, leaders and families came to congratulate the award recipients.

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Home and Family

[Logan County Extension news release
by Amy Hyde]

Ag Announcements

Olympia FFA Alumni news

[NOV. 8, 2002]  What do a tree, a chain saw and a TV have in common? The Olympia FFA Alumni chapter is selling raffle tickets for these items. The low-priced tickets provide a chance at a 36-inch Zenith color TV, a Stihl Farm Boss chain saw and a 1.5- to 3-inch diameter sunset red maple tree.

The chapter draws in members from McLean, Tazewell, Woodford, DeWitt and Logan counties.

Proceeds from the raffle will help support the agriculture program of the Olympia School District.

The drawing for the items will be Jan. 11, 2003, which is the tentative date for the FFA alumni banquet.

For more information on purchasing a raffle ticket or about the FFA Alumni chapter, contact any member of the chapter or call (309) 379-5911.

[News release]

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