Hello hmsmith2012,

Here’s the Michigan‑specific, research‑based explanation for yellow leaf spots and premature fruit drop on newly purchased columnar apples in cedar pots, and what your sister should do right now to help stabilize them.

I’ll break it down cleanly so you can see what matters and what doesn’t.
1. The yellow spots you describe = very likely cedar‑apple rust (CAR)
Your description is textbook:
Yellow spots on the upper leaf surface
Spots are new
You can scrape off the yellow material with a fingernail
Spots do not go through the leaf
Trees are in Michigan (CAR is extremely common here)
Columnar apples are not highly resistant
This matches early cedar‑apple rust lesions.
Is it serious?
No — not on young container trees.
CAR is mostly cosmetic unless severe. It will not kill the tree.
Does neem oil help?
Cold‑pressed neem (azadirachtin) is not very effective on CAR.
It may slow it slightly, but it will not stop it.
Should she panic?
No. CAR is expected in Michigan unless you spray a true fungicide at the correct timing (early spring).

More information at this link:
Cedar apple rust - Integrated Pest Management


2. The fruit drop = almost certainly June drop, not disease
Michigan apples naturally shed fruit in late May–mid-June.
Clues that this is a normal June drop:
Fruits range from a grape to a ping‑pong ball size
Trees are young
Trees were recently transplanted
Trees are in containers (stress increases drop)
Only some fruit is dropping, not all
No signs of insect frass or tunneling
This is normal physiology, not a disease.
Why it happens
The tree sheds fruit it cannot support, so it can size up the remaining apples.
Should she worry?
No. This is expected, especially in the first year after purchase.

3. The REAL issue: water stress in cedar pots
This is the part that matters most.
Columnar apples in containers are extremely prone to water stress, especially:
In cedar pots (which wick moisture)
With fresh potting mix
With newly transplanted trees
In warm, windy weather
What water stress looks like
Yellow spotting becomes more noticeable
Fruit drop increases
Leaves may curl slightly
Growth slows
How much water should she give?
Watering “until it runs out the bottom” is not enough information.
What matters is frequency and soil moisture between waterings.
Michigan container‑grown apple watering rule
In June–August:
Water every 1–2 days in warm weather
Water until the entire root ball is saturated
Ensure the pot drains freely
Do NOT let the pot dry out between waterings
How water‑stressed can they get?
Very.
A columnar apple in a cedar pot can go from “fine” to “stressed” in 24–48 hours.
This alone can cause fruit drop.

4. What she should do right now
A. Fix the watering schedule
This is the most important step.
Check soil 2–3 inches down daily
If dry → water
If moist → wait
In hot weather → expect daily watering

B. Stop using neem for now
Neem can cause leaf spotting and phytotoxicity in warm sun.
If she wants to spray something safer:
Use nothing right now
CAR is already established and cannot be reversed this season
Fungicides only work before infection (early spring)

C. Remove dropped fruit
This reduces stress and prevents pests.

D. Move pots to a location with morning sun + afternoon shade
This reduces water stress and heat load.

E. Fertilize lightly (optional)
Use a balanced slow‑release fertilizer once in early summer.
Do NOT over‑fertilize — it increases stress.

5. What to do NEXT YEAR (important)
If she wants to prevent cedar‑apple rust:
Spray schedule (Michigan, .edu‑based)
Use a real fungicide (myclobutanil is the standard for CAR):
Tight cluster
Pink
Petal fall
10–14 days later
After that, CAR pressure drops.
Neem will not prevent CAR.

Summary
Yellow spots = cedar‑apple rust (minor, expected, not dangerous).
Fruit drop = normal June drop + transplant stress.
Main problem = water stress in cedar pots.
Fix = consistent watering, reduce heat load, stop neem for now.
Next year = proper fungicide timing if she wants clean leaves.

I hope this helps