T-111 siding should not be sealed at the bottom. Panels mounted vertically above another panel should be separated by a Z-bar flashing. When siding is built above a roof, either L or step flashing is used behind the panel. Never caulk flashed joints as this will CAUSE rot.
The siding is typically very tight at the sill-plate with 6-inch nailing schedules. There is no reason to caulk that joint, and it is desirable to allow any moisture to move downward, rather than accumulate near the bottom of the panel. Critters cannot get behind properly fastened T-111 siding. Sealing bottom edges with primer and paint can greatly reduce moisture from being drawn into the panel, which is the most common source of rot.
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