Beyond Agronomy News: February 10th 2009
Agronomy
Maximizing photosynthesis with row spacing and seeding direction
I was having a visit with Robert Ruwoldt, a grain farmer in Horsham, Victoria, about the way he sets up his tram lines. Robert or "Ruwy" plants his crops on 15 or 30 inch row spacing and seeds north-south as often as possible. Such wide row spacing is insane by many people's standards but it seems to work well for him. Can you imagine seeding your canola on 30 inch rows?
The question is does it work? The average rainfall for this area was 152 mm (6 in) in 2008 and they've been dry for a number of years. This year Ruwy was averaging 1.5 T/ha (27 bu/ac) in canola, 3 T/ha (45 bu/ac) wheat and 4 T/ha (75 bu/ac) barley. Many of his neighbors who farm conventionally and those who don't use controlled traffic didn't bother dragging out their combines. I've seen Ruwy's grain sheds and bins and confirm that he must have done something right. The local grain elevator sits almost empty because of the poor yields this year yet his bins at home are almost full.
In addition to maximizing water use efficiency with wide row spacings, Ruwy plants most crops in a north south direction to maximize the plants ability to capture sunlight. He mentioned that he always see less pods or flowers on the north side of a plant if it's seeded east to west because it is shaded. I know after visiting with several grape growers and orchard growers in Australia and California, they all seem to plant their trees or vines in a north south direction to help capture as much sunlight as possible.
Very interesting concepts I've learned these past few days in Horsham! I'll touch on the controlled traffic and inter-row seeding practices Ruwy uses in another issue. Food for thought. SL
An innovative way to improve hydraulic efficiency
I had a chance to visit with Bruce Gilmore, a friend and representative of Baker No Tillage, a no-till drill company from Fielding, New Zealand. They have an interesting concept built on to their air tanks to help cool down hydraulic oil and reduce moisture in the air tank and delivery tubes. They have designed the radiator on the air cart to fit on to the fan as you can see in the photo. The fan is used to pull large amounts of air through the radiator to help cool the hydraulic oil and pull warm air into the air tank. Warm air holds less moisture and reduces the amount of buildup in the tank and hoses that can lead to plugging.
This set up can reduce hydraulic oil temperatures by ten degrees Celsius and significantly improve overall performance of the unit. This system will expand the duration of seeding in high atmospheric moisture (fog, light rain) where the limiting factor becomes the soil moisture conditions. Those of you who experience hydraulic starvation from lifting the drill out of the ground and steering at the same time may want to look at this option. Food for thought. SL
Source: Bruce Gilmore, www.crossslot.com
Five reason for the spread to narrow in the Alberta GHG Offset Market
The particular spread we are talking about is the price difference between the $15/tonne price cap created by the Climate Change and Emissions Management Fund, or Tech Fund, and the current value of GHG offsets considered good for compliance. As mentioned in earlier columns, the true up period for Large Final Emitters (LFEs) ends March 31, and we are seeing more interest in GHG offsets almost daily. While this market is not large and transactions are very infrequent, quoted values appear to support our earlier contention that the price spread to the Tech Fund cap could narrow. Late last year we saw quoted values for offsets between $9/tonne to as high as $11/tonne, more recently we see those same offsets being quoted at between $9/tonne to as high as $13.50/tonne. Offset quality plays a significant part in the quoted values, but as we can see the upper end of the price range is clearly moving closer to the price cap. There may be many reasons for this to happen, but an analysis of the market suggests five reasons for the spread to narrow, and potentially continue to narrow, including the following:
- Cash and credit are tight, and it's cheaper to buy an offset and than pay up $15/tonne to the Tech Fund.
- There is the potential that the Government may tinker with the Tech Fund and reduce access to it or increase the price to access it. Overall this would drive up the value of offsets.
- The supply of offsets may fall short of demand. A LFE attempting to purchase offsets for the 2008 compliance year only has a short amount of time to act, and offsets already sold are being tightly held.
- This is the second year for the Alberta GHG offset market and we are seeing approximately a dozen or so active buyers, well over double that of last year at this time.
- Speculation continues to spread that we may see a federally based system, or more likely some form of continental GHG offsets market emerge. If this is based on a cap-and-trade system with offsets, then a greater than Alberta market exists for GHG offsets.
Reference: Bruce Love, Preferred Carbon
Disclaimer: The views expressed in this article are those of the author only and are not intended to represent financial advice.
Market News
Fundamental Analysis
Technical Indicators
I have set up these weekly updates to include market entry indicators to help you improve the timing of your grain marketing. Also, I added market trend indicators to give you a sense of the short and long term market trends.
Canola March Futures
Support: $424.40
Resistance 1: $431.00
Resistance 2: $437.60
Market Entry
The Bollinger Bands are indicating an overbought market. Volatility appears to be declining. The market appears overbought, but may continue to become more overbought before reversing. Look for some price weakness before taking any bearish positions based on this indicator.
Market Trend
The Relative Strength Index is somewhat overbought at 53.89. However, this by itself isn't a strong enough indication to signal a trade. Look for additional evidence before getting too bearish here.
MACD is in bearish territory, but has not issued a signal here. The long term trend, based on a 45 bar moving average, is UP. The short term trend, based on a 9 bar moving average, is DOWN. MACD is in bearish territory. However, the recent upturn in the MacdMA may indicate a short term rally within the next few bars.
Feed Barley March
Futures
Support: $144.00
Resistance 1: $146.40
Resistance 2: $148.80
Market Entry
The Bollinger Bands are indicating an overbought market. Volatility appears to be declining. It's possible that we may see a market rally here. If so, the rally might turn out to be a good short selling opportunity.
Market Trend
The Relative Strength Index is somewhat oversold at 46.71. The long term trend, based on a 45 bar moving average, is DOWN. The short term trend, based on a 9 bar moving average, is DOWN. Momentum is in bearish territory.
Hard Red Spring Wheat March
Futures
Support: $6.44-7
Resistance 1: $6.56-5
Resistance 2: $6.68-3
Market Entry
The Bollinger Bands are indicating an overbought market.
Market Trend
The Relative Strength Indicator is somewhat overbought at 53.40. Look for additional evidence before getting too bearish here.
The MACD is in bearish territory. The short term trend, based on a 9 bar moving average, is DOWN. The long term trend, based on a 45 bar moving average, is UP. The recent upturn in the MacdMA may indicate a short term rally within the next few bars.
Canadian Dollar March
Futures
Support: $0.796
Resistance 1: $0.810
Resistance 2: $0.825
Market Entry
The Bollinger Bands are indicating an overbought market. Based on conventional interpretation the market is technically bullish.
Market Trend
The Relative Strength Index is somewhat overbought at 56.06. However, this by itself isn't a strong enough indication to signal a trade. Look for additional evidence here before getting too bearish here.
The MACD is in bullish territory, but has not issued a signal here. The long term trend, based on a 45 bar moving average, is UP. The short term trend, based on a 9 bar moving average, is UP. MACD is in bullish territory. And, the market just signaled a bullish key reversal off a 9 bar new low.
Glossary of Technical Terms
International Crop Weather News
United States: In the West, locally heavy precipitation continues across California. Rain and snow showers are developing throughout the Northwest but rain has yet to reach the Four Corners Region. On the Plains, fire weather and wind warnings are in effect for central and southern areas, as dry, breezy weather accompanies a warming trend. Milder weather prevails farther north, although scattered snow showers may develop later. In the Corn Belt, sunny, favorably warmer dominates, with highs approaching 60 degrees F in Missouri. However, freezing precipitation may return this evening to the western Great Lakes Region.
Europe: Locally heavy rain on the Iberian Peninsula causes flooding but provides an additional boost to reservoirs and irrigation reserves. In the Balkans, above-normal temperatures and locally heavy rain cause rapid snowmelt and flooding, submerging low-lying fields. Dry weather and seasonable temperatures in Germany, France, and Poland maintain favorable conditions for dormant grains and oilseeds, although crop areas are devoid of a protective snowpack.
Former Soviet Union: Warmer-than-normal weather provides favorable overwintering conditions for winter grains but causes further melting of the protective snow cover in Ukraine and southern Russia. A moderate to deep snow cover persists across northern Russia, insulating winter grains from recent bitterly cold weather.
Southeast Asia: Monsoon showers maintain abundant soil moisture for crops in the Philippines and Indonesia. In Malaysia, flooding causes harvest delays for oil palm across Sarawak.
South Asia: Dry weather across central and southern India favors cotton harvesting. Near- to above-normal temperatures in northern India promote winter wheat development.
Middle East: Locally heavy rain in Turkey and Syria provides additional soil moisture for vegetative (south) to dormant (north) winter grains. Showers and above-normal temperatures keep Iran's wheat areasdevoid of protective snow cover.
Northwest Africa: Showers continue, maintaining abundant topsoil moisture for vegetative winter wheat and barley.
Australia: Queensland is flooding, New South Wales and Victoria are sweltering and Western Australia has seen normal temperatures with a few left harvesting wheat and barley.
South America: In Argentina, light to moderate rain helps to stabilize the condition of drought-stressed summer grains, oilseeds, and cotton, although much more rainfall will be needed to significantly improve drought. Drier weather returns to southern Brazil after several weeks of beneficial rainfall. Conditions are mostly favorable for soybeans and other agriculture in central Brazil.
South Africa: Widespread rain improves moisture levels for vegetative to reproductive summer crops.
Canada: Frozen J
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