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Weekly Crop Comments

 

Price

Change

US Dollar

82.32

+0.73

Crude

90.89

-2.24

Dow

14,090

+90

Corn and cotton prices are up; wheat prices mixed while soybean prices are down for the week. Without an agreement on the budget in Washington D.C., sequestration goes into effect today, March 1, with no immediate impact expected. The effects on commodity prices might be felt in the strength or weakness of the U.S. Dollar. Some analysts expect to see a stronger dollar from sequestration which generally is seen as negative on commodity prices. The Dollar is not the only influence to watch, but in the absence of strictly commodity based news, it does have a strong influence on direction. Revenue based crop insurance base prices affecting Tennessee for corn, cotton and soybeans have been set at $5.65 a bushel for corn, $0.83 a pound for cotton and $12.87 a bushel for soybeans. These are based on the February average of the December contract for corn, December contract for cotton, and the November contract for soybeans. This compares to 2012 base prices of $5.68 per bushel for corn, $0.93 per pound for cotton and $12.55 per bushel for soybeans. The sales closing date for crop insurance in Tennessee is March 15. USDA will release their March supply & demand numbers on Friday, March 8. No major changes are expected in the U.S. numbers, but some adjustments may be seen on global production.

Corn:
Nearby:

Corn

Price
$/bushel

Change

May

7.08 1/2

+0.24 1/4

Support

6.89

+0.10

Resistance

7.14

+0.20

Technical

Sell

+

20 Day MA

7.04

-0.09

50 Day MA

7.09

-0.03

100 Day MA

7.25

-0.03


Weekly exports were above expectations with net sales of 20.2 million bushels (11.9 million bushels for the 2012/13 marketing year and 8.3 million bushels of net sales for the 2013/14 year). Ethanol production rose 15,000 barrels per day to 812,000 barrels per day in the latest report. Profit margins appear to be returning to ethanol plants.

New Crop:

Corn

Price
$/bushel

Change

September

5.84 1/4

+0.11 1/4

Support

5.71

+0.03

Resistance

5.89

+0.08

Technical

Sell

+

20 Day MA

5.87

-0.08

50 Day MA

6.03

-0.07

100 Day MA

6.29

-0.04


The situation differs greatly between old crop and new crop corn as supplies for old crop are tight and projected supplies for new crop are thought to be plentiful. The spread between the two widened more this week reflecting the difference. From an agriculture standpoint not counting any outside influences, weather will be the driving force in prices. It still appears a little early to completely take out the weather premium.  Currently, I would have 10% of 2013 production priced. I am still looking for a bounce for additional pricing or for an opportunity to implement an option strategy.

Soybeans:
Nearby:

Soybeans

Price
$/bushel

Change

May

14.43 1/2

-0.00 1/4

Support

14.20

+0.14

Resistance

14.69

-0.46

Technical

Buy

=

20 Day MA

14.46

-0.02

50 Day MA

14.24

-0.02

100 Day MA

14.31

-0.02


Weekly exports were above expectations with net sales of 43 million bushels (net sales of 25.3 million bushels for 2012/13 and net sales of 17.7 million bushels for 2013/14). China accounted for 17.4 million bushels of old crop net sales and 12.9 million bushels of new crop net sales.

New Crop:

Soybeans

Price
$/bushel

Change

November

12.61 1/4

-0.03 3/4

Support

12.45

+0.10

Resistance

12.72

-0.49

Technical

Strong Sell

-

20 Day MA

12.86

-0.14

50 Day MA

12.93

-0.06

100 Day MA

13.07

-0.03


I would have up to 10% priced on 2013 production. I think there may be an opportunity for additional pricing at higher levels or an opportunity to put in place an option strategy.

Wheat:
Nearby:

Wheat

Price
$/bushel

Change

May

7.20 1/2

+0.01 3/4

Support

7.00

-0.08

Resistance

7.37

=

Technical

Strong Sell

=

20 Day MA

7.41

-0.19

50 Day MA

7.67

-0.11

100 Day MA

8.21

-0.05


Weekly exports were within expectations at net sales of 19.3 million bushels (13.7 million bushels for 2012/13 and net sales of 5.6 million bushels for 2013/14).

New Crop:

Wheat

Price
$/bushel

Change

July

7.22 1/4

-0.01 1/4

Support

7.02

-0.12

Resistance

7.38

-0.02

Technical

Strong Sell

=

20 Day MA

7.44

-0.19

50 Day MA

7.71

-0.12

100 Day MA

8.15

-0.07


Moisture in the Plains and some improvement in winter wheat condition ratings in the states that are reporting them have pressured the market. I am currently priced 10% on the 2013 crop.

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