hello, and welcome to u.s. farm report. i'm john phipps. well, if there's any doubt about the chinese economy, this week should erase them. after the soybean surprise and the continued deterioration of -- prices leapt upward only to be smacked down by an interest rate increase in china. these are are -- the rise of 1.3 billion people from abject poverty to improving standards of living is an indicator of growing freedom and economic possibilities too long denied them. let's check the headlines. here's al pell. >> soybean prices soared yesterday. at the same time, ag department

cut its ending stocks figure. usda pegged stock production at -- both down from a month ago. two bushels per acre were registered in kansas, nebraska, and south dakota. the record also calls for record yields in louisiana, new york, and wisconsin. what traders were not expecting was the big cut in carryover. >> the big surprise was on carryover where usda cut a million bushels for 2010 with the result of a smaller crop estimate and also an increase in the export estimate thanks to very aggressive chinese purchases in october. now, stocks projected for 2010-2011 at 185 million- bushels, that's roughly half of what was expected three months

ago. in this market environment, it didn't take a whole lot to get bull excited. that's exactly what the numbers did yesterday. >> as for corn, the ag department is expecting 12.5 million-bushels based on average yields. now, that's a reduction of 1.5- bushels from the october forecast. corn carover is put at 80 million-bushels. -- 800 million-bushels. >> usda lowered it's yield estimates for the 2010 cotton crop by half a million bails, or 2%. cotton production reduction is due to low yields in texas. well, that's it for the

headlines. now back to john for crop watch . >> time now for crop watch. in the thumb of michigan, they narrowed their rows from 28 to 20 inches. in missouri, usda says a continued lack of precipitation in the southeast corner. continued to be the poorest in the state with 95% called poor to very poor. they also say livestock water supplies are getting small as well. when we come back, it's time to talk markets. during his asia trip, president

round table guest this is week, u.s. farm report jim bauer from bauer trading. what did the markets do on friday for close? >> well, they collapsed. soybeans went down. wheat 40 cents lower. >> and the cattle and hogs also. >> cattle, hogs, crude oil, sugar, cotton. >> the markets are really down all across the board sch. >> yeah. >> i'm going to jim bauer.

when they do that, you can't blame u.s. government crop report. what's happening? the chinese have decided to tighten credits. they're appearing to do that. second, you've got kind of a lull in the marketplace with the harvest now winding down in the u.s. around northern hemisphere. it's a quiet time, kind of an easy time, as far as market movement normally, but with the other factors, it flips it from the way it should be. then finally, i think this december open interest of these commodities all the way across the board, cotton, sugar, corn, sow beans, all these positional

moves that have been heavily invested in. the market is uneasy with the announcement from the chi niese. >> you and i were looking at the market. 8billion-bushels of corn were open interest. on monday we had an all-time record volume day in most commodities, and we had a key reversal. huge interest, huge volume. i think that's going on in china and with the g20, i think there's problems ahead for our markets. >> we can never go back to the fundamentals, we're now in a world market, what your interest rates r that's fundamental, but going back to the weather and the crop report, near going to have has much to carry over. i thought they might go up a

little bit or keep going up or staying steady, but this drop to the limit, i don't know. >> al, i think what has happened here, this situation that's ongoing right now today is worrisome to the market. what has happened here is we're actually in a currency war already. it's not even a question. it's happening. when the u.s. injected 6 billion, the rest of the world said you're deliberately devaluing your currency. we'll take retroactive measures against you for doing that. we're not in a protectionism type environment yet, but the message was if you keep doing that, you keep spending and show nothing discipline, we can counteract that. the chinese are huge, massive buyers of commodity. they don't like paying that extra high price. they sit and hold their

currency value. they will look for a spot to come back in when they think it bottoms out. >> chinese are one of our biggest buyers, and that's why it affects the prices, and a lot of the inside interest are speculating anyway. when they see that opportunity go down, they get out. is that what you you're saying? >> not only is our open interest a record, but look at china, they're interest is 40% higher than a year ago. there's massive speculation, and we've seen the pressure respond to that, where they're selling the deferred product on the chinese exchange and in turn buying our soybean. is anybody going to win out of this? is south america or anyone going to win? >> you heard me a thousand times, do what the chinese do, not what they say. >> when they think this thing bottoms out, of course they're

terrific traders and they've always been good at that buying mechanism. they're going to let the market siphon down. they're going to get as much out of this move as possible. remember, a lot of these are still relatively tight. they have to come back in and natural resources are long term. short-term, no. i think november is a month that washington does not want to remember. >> when we come back, we'll are more of this to discussion right here on u.s. farm report.

jim bauer and justin kelly here. jim, talk about what you think the markets are going to do next week. i'm going to ask you in a second, justin about what you think might happen. >> i suppose it could go all the way down on monday again too. >> keep in mind, a bear market will take back in one day what took a bull market three days to build. so you get into that liquidation mode and you never know. they will look at the synthetic options and they'll see how far they think the market can reach. the market will look for stabilization, but some of those funds that were overleveraged, there may be some problem there is, like he said. i think looking out ahead here, the market goes into the lull, but i was looking at the whole picture, and it seems to me that the time frame from december 7 december 7th through january 30th, that's going to be the real critical time in

the southern hemisphere. i've alerted my staff. that's the time frame we're going to have to be focused on weather related conditions. that's when the market could tip on weather either way. so i think try to settle in and be positioned for this time frame. >> i know that you guys concentrate particularly on hedging accounts as opposed to spec accounts. what kind of producer -- some of these guys may have locked in their input cost already thinking this market is going go up without taking action. what should they be doing? >> there's lots of different tools out there. i think for our guys, we have about half of our new crop of corn and beans sold. we replaced it with a spread strategy. i think that's the safest kind in this environment. if you have any kind of futures

or marginnable positions, it's very dangerous for people that aren't used to that. if you can lock in good margins and grow $5 corn and $12 beans, you can't go wrong. >> so you're saying take advantage of where it is at this point in time if it doesn't get any worse. >> and use a call center. if there's problems in south america, we're going go a lot higher. >> so you think there's opportunity. i like that word higher. >> protect the revenue you have now, but keep the upside open in case south america does have a snag. there's not a lot of room in corn and global wheat and australia is not all that good either. some of them get too much rain and some are too dry. so we really have to look at supply, which is a basic fundamental, but the outside is coming in and whatnot. i don't know whether i would call that a fundamental or not yet. >> it is in the short run. when they can buy the whole

crop of corn in a matter of a few months, it turns into a fundamental. >> what do you recommend producers? you're going to have a list that long monday morning. >> we've been working on making sure we know the costs. that's important in this type of market. keep in mind, a producer, farmer, rancher, they're always net long. no matter what they do. >> that's right. >> always net long. so when you get into those profitability margins, you, yourself, need to sit down and look at your profit margin and take advantage of. that you don't need to rely on a broker to give you that. he may need to provide you with background information, particularly in the foreign market, and maybe supply and demand tables, but you need to

know you profit margin. don't tell me if you sell wheat at $8, which is a terrific margin, and it goes to nine or ten dollars, that you're unhappy. you're still net long. if you're a specklator, then it's a different story. then your risk management really intensifies and you need to take a different slant. a farmer, producer, is always net long if they're a producer. >> the name of the game is to protect that at a profit. that's what you said? >> yeah, that's right. >> well, i want to thank both of you for being here today i'm sorry that we can't wish everybody a thank giving with these price, but that's coming up next week. we'll be back with u.s. farm report in just a moment.

welcome back to u.s. farm report. boy has this map changed in the past couple of months. this is the drought monitor. most of the growing season it was confined to arkansas. now it's definitely spread up into the mississippi valley and over to the ohio valley. even now in the northern indiana, southern michigan, a moderate drought in those areas. you can see a drought in eastern colorado, western kansas, and a few spots out west, although that's typical for this time of year. we need some moisture in a large chunk of the growing areas of this country. here's the jet stream by monday. you can see a trough here. this typically does start to cause some moisture in the eastern part of the trough. a lot of gulf moisture in this

situation. very cold air comes in through the latter parts of the week. then we get a zonal flow. this is extremely cold air north of hudson bay. you can see that sit right there. until this turns into a trough, it's not going to come south. let's check things out as we head through this week. on monday, there's a system through the eastern part of the country. that causes some rain and they need it through the southern portions of the gulf coast. up the eastern seaboard, some snow on the backside of that, a little bit of rain and snow. montana back in the pacific northwest. another system moving from the other part of the country. still some scattered showers and thunderstorms in south florida and yet another system moving into the pacific

northwest. that first front stalling out in the southeast and the next one causing storm and snow in the northwest by friday.

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refusal of many countries to accept the fact the u.s. will no longer be able or willing to act as the market of last resort. years of wide trade imbalances fueled by comparatively open american consumer markets from everything from toys to machine tools is changing. as your dollar drops, imports may become expensive and our products are -- overseas. reading between the line, it becomes obvious that for all the talk of china and india, that hasn't sunk in in the u.s. selling to us was so easy for so long. we had eager consumers and robust shipping systems. it made america the market of choice. not unlike children selling candy for a school fundraiser, merchants across the globe will have to learn that the rich old guy down the block is not the

automatic answer to their sales problem. please, let us know what you think. send e-mails to info at usfarmreport.com or call and leave us a voice mail. coming up, upstream heros are found on an illinois farm. coming home can be hard if you're a veteran of iraq or afghanistan. you may feel like you're all alone.

but you're not alone. at iava.org, your fellow vets are all around you. join our free online community. get the resources you need and connect to other vets who know where you're ng from. dairy producers

continue to battle weak demand and high feed costs e15 faces a challenge from today , dare producers continue to battle demand and high feed cost. we learn about a new kind of hero on the farm. u.s. farm report brought to you by chevy and their award- winning cars, trucks, and crossovers. welcome to u-s farm report, i'm john p th hello and welcome to u.s. farm report. i'm john phipps, the first preliminary report from the

president deficit commission was all the talk in political circles this week. my impression was any plan that could both infuriate the left and right, it was a good start. for farmers of the sacred crops, it should be noted that i have seen no budget blueprint from any coroner does not include massing farm productions. while they dismiss this threat, they should look around to see how many supporters won't be around soon. let's get started with headlines and al pell. >> thank you, john. when the global economy took a drive, dairy exports did the same. the past two years have been a financial disaster on many farms. many of the top producers gathered this week for dairy today's elite business conference w. the economic downturn, struggling exports and highest feed cost, they're

looking for help. >> it's going to be interesting to see what these high corn prices and bean prices do to the dairy industry. we're at good prices right now, but they've dropped off in the last couple of weeks. >> we're going to see more economic volatility in the next ten years. that's changing how they manage their business. they have to change things going forward. >> swanson says too often they rely on marketing experts. producers must take full ownership of every part of their business. well a highest blend of ethanol is facing a lawsuit from farm and food organizations. last month ice decision cleared the way for fuel companies to -- the coalition claims the epa

has overstepped it's bounds and the decision will cost americans at the grocery store. there are eight organizations behind the suit, including the grocery manufacturers association and the national pork producers counsel. that's it for news. time for the national forecast from meteorologist mike hoffman. we're going start this week with a pretty strong trough in the middle of the country. that means more cold air through the mid-sections. it's going to be mild through the eastern seaboard. that's some good news here. a lot of this area, especially the southern mississippi valley needs the rain. there will be rain and snow up into the eastern great lakes. you can see that in the pacific northwest. very warm in the southwest. that will be spreading eastward to the four corner region, but

still the trough persists. another system moving through the middle of. that that will be causing some light rain showers and some snow in the northern fringes of that. it doesn't look to be a wet system. another system coming coming into the pacific northwest there. we see the ridge building back up, we typically get another zone here. systems may be coming through the western sections with some rain and mountain snows that way with the next trough coming in. it does warm up, it looks like for the middle of the country as we head to the middle of the week with cold air lingering through the northern earns here. that following week we're going to project some of that to come down. above normal for california.

that basically takes us through thanksgiving day. take a look at precipitation next week. below normal here. the mid-atlantic down to the northeast, probably above normal. let's go out to the next 90 days, above normal temperatures for the southern half of the country. john? >> the ultimate farm quest series is brought doto you by case ih. with crops out of the field, producers are taking part in fact ultimate farm quest. they're getting a chance to review some of their goals they set by this year. one of the goals set was to improve -- continue improving his soil economics. located in the south part of

the state, some of leon's field can have different types of soil. that can create challenges. then there's the raw numbers created by yield maps and management zones. >> we're really trying to look at all this dataover time. we've accumulated tremendous amounts of data through use of a -- we've got yield data calibrating combines that have been running out here for years. we've got massive, massive amounts of data. the one thing i would really like to take a look at is take all this data that we've been able to capture with the planting and the harvest of it and really take advantage of it. it's a pretty big thing because there's a lot of data and a lot of data points and not quite sure how to do it.

but that's something i would like to do. >> you can learn more at ultimate farm quest.com. when u.s. farm report returns, an approach to tracking a red belly flyer. spirit of the heartland is next. bird lovers

listen up - researchers are bird lovers listen up. researchers are now taking a bird's eye view to better understand the behavior of our flying friend. in this report, we head to the forest to find out what they're learning. >> carrying a ladder through a thick forest is no easy task.

these researchers make their way through the fogless there's a lot of bashed wire fences and thorns and the birds can fly- over everything. >> they're equipped with radio transmitters. they radio tagged 33 woodpeckers. the packs fall off after four months. >> it's like a small backpack, but more like a fannie pack. we want to keep those wings free on those birds. >> using gps technology, they track the bird's flight pattern. they want to see how missouri's changing landscape affect how the birds fly. researchers are finding these

bird don't like to fly-over wide open spaces. >> if an area gets split in half, those birds in that segregated area of the woods may not have a place to go. they may go extinct because they can't find things. >> this is a steppingstone for birds, protecting them and providing them with food. they hope this will be helpful. >> if missouri residents are interested in having birds in their yard and the places where they go hiking, this kind of research is going to provide the information that we need to maintain that into the future. study the red- bellied >> researchers say they chose to study the red bellied woodpecker because it lives in

the same area year round next week we're off to a contest where corn picking is done one era ear at a time. up next, what does it take to become an upstream hero. we're off to illinois for the answer. management is a

phrase you hear a lot these days on the farm...an effort to keep nutrients in the field and out of nutrient management is something you heard a lot on the farm. to that end, the conservation technology information center on the look out for what it calls upstream heros. two of the first nominations are a father and son duo from central illinois. >> young corn is soaking up rain, darkening the soil of this central illinois field. farmers jeff and doug martin are watching with high expectations. their goal isn't just maximum yield. it's maximum yield with minimum impact. >> we've always been for many, many years want to achieve the goal of conservation, keeping the soil in place on the land and not have run off, not have wind erosion. >> to do that, the family has

been no till and strip till farming for three decades. >> we can remember like it was yesterday, going out in the back 40 and no telling -- and my dad came out and turned around and went to the house. we did 20-acres that year. it was the best corn we had. from then on we just continued to research and improve on what we did and talk to other people and study and try to improve our practices to where we are today. >> today they're not only managing the soil, but they're working to reduce nutrient run off, planting buffer strips between fields and waterways, putting chronically poor farmland into the conservation program. >> a lot of times you have to till that area two or three times and spend more time and

labor and fuel and money on those areas. >> they do it for profitability, they do it for steward ship. they do it because it's the right thing to do. >> dan spent his career with the natural resource conservation service and now works as a no till farming consultant. >> they're doing continuous no till using strip till for the corn. they planted conservation buffers. they're doing a good job on their nutrient management, putting on less than what is normally described. yet the yield continues to increase. >> for the martins, there's a bigger picture to consider. parts of corn country feeds watersheds that empty into the river. some scientists are blaming nutrient run off, overapplied nitrogen for dead zones in the

gulf. that feeds algae. it takes oxygen which suffers -- the usda recently finished a study that says conservation practices do work with proper nutrient and soil management, farmers can reduce impacts downstream. it's said to be worth the effort. >> if we can help the producers bottom line and help the water that that person lives in, then they may consider changing practices. we hope that other people watch what we're doing because we feel like we're doing things that are beneficial for our economics, and the environment, and all the people around us. >> a passion that's been passed down from one generation to another. >> upstream heroes

project in this you can read more about the upstream heros project in this month's issue of farm journal magazine. when we come back, it's time for tractor tales and our country church salute. please stay with us. wards catalog,

this week's tractor tales features a on straight from a montgomery ward catalog, tractor tales features a one of a kind antique. >> it's a 1951 ward. i just finished restoring it about a month ago. pulled it out of a fence row. i've had about seven years, rebuilt everything on it. it's the first show i've been to with it.

they're built in shelbyville, indiana. sold through the montgomery ward's catalog. i had the painting done. i didn't want to mess up the garage. a lot of the custom work i did myself. they were called custom, and montgomery wards put their name on them and sold them through their catalog. they only sold them three years. they're pretty rare. i got to work the engine, and i don't have no land to plow, so i might hook onto it this fall and see how it works on pulling sled. it's more or less a show piece right now. i may pull this one a little bit. oh, i love it. i would like to try another one, but if i don't, i got two of them. that's pretty good. >> our first country salute

goes to the first baptist church of missouri. this was their centennial anniversary. they officially organized in january of 1910. the first church was completed in 1913 and replaced in 1955. a new sanctuary and classroom building is currently under construction. the congregation is led by pastor lyle mankey. this week's second salute goes to castilla. it's their 175th anniversary. it's grown from 5 to 354 active members. the church was modeled after their mother church in hartford, connecticut. their current pastor has led the congregation for 32 years. as always we would like to learn about your home church as

well. the a address is on the screen. inside the farm

.... time now for our weekly look inside the old farm report mailbag. this question struck a cord with me, so to speak. i know you used to direct a choir and was wondering if you still do. it would be nice if your choir would sing for us on your show for christmas. thank you for your kind inquiry, but i have stepped

down from choir director at our church. like my small churches, it's getting harder to fill the choir lot of. during my entire 30 plus years as a choir master, i was keenly aware of how unusual it was to have capable and committed members in such a small congregation. there were sundays when 30% of the congregation was in the choir lot of. each sunday and wednesday practice was a blessing i continue to cherish. things are changing and it was time for new ideas in our church. singing in a choir for me was one of the most powerful companies of being part of something where the whole was greater than the sum of the parts. for those of you who have been in a group where everybody showed up on the right notes at the right time and have felt

the up lifting sensation such moments of cooperation bring, i urge you to treasure those moments. as always we would like to hear are the you. send comments to usfarmreport.com or leave us a voice mail. for al and mike, i'm john phipps saying thank you for watching u.s. farm report. be sure and watch us next week, we'll be working to do even better.