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Weekly Crop Comments

Overview

USD, Crude and Dow

Corn and wheat were up; soybeans and cotton were down for the week. Outside markets caused some fluctuations in the grain markets at the end of the week as Fed Chairman Ben Bernanke announced the potential trim down of its asset purchasing program later this year and the potential to halt the program next year. Unplanted corn acreage is estimated to be in the 3 million acre range lending some support to corn prices this week. Weather continues to affect soybean planting however warm weather will greatly aid acres already seeded. Cotton prices retreated from last week’s rallies when they were around the 90 cent range, giving back almost all of last week’s gains. Wheat harvest in Tennessee is about two weeks behind the 5-year average. The USDA Planted Acreage and Quarterly Stocks Report to be released next Friday will provide some real acreage estimates and give an indication as to any acreage shifts.

Corn

Nearby and Harvest Corn Futures Prices

Historical September Corn Futures Prices

Weekly exports were below expectations with net sales of 8.3 million bushels (5.2 million bushels for the 2012/13 marketing year and 3.1 million bushels for the 2013/14 year). Exports were 12.7 million bushels. USDA continues to lower old crop sales expectations as sales have been well behind initial projections. Last week ethanol production decreased 11,000 barrels per day to 873,000 barrels per day. June 14th ending ethanol stocks increased to 16.45 million barrels from 15.99 million. Jul/Sep and Jul/Dec future spreads were -69 cents and -105 cents, respectively.

Crop progress report released June 17th indicated, corn emerged was 92% compared to 85% last week, 100% last year, and 97% for the 5-year average. Corn condition was reported as 64% good to excellent compared to 63% last week and 63% last year; 8% poor to very poor compared to 8% last week and 9% last year. In Tennessee corn emerged was 97% (5-year average 99%) and corn condition was 76% good to excellent 7% poor to very poor. Producers should consider having 40% of their crop priced at this point and look for any rallies as an opportunity additional production. From a price risk management standpoint a $5.95 September Put Option costing 33 cents would establish a $5.62 futures floor or a $5.60 December Put Option costing 43 cents would establish a $5.17 futures floor.

Soybeans

Nearby and Harvest Soybean Futures Prices

Historical November Soybean Futures Prices

Weekly exports were within expectations with net sales of 5.9 million bushels (1.9 million bushels for 2012/13 and 4 million bushels for 2013/14). Exports were 3.4 million bushels. The marketing year-end is over two months away however this is the time of year that sales historically slow to a minimal pace. Jul/Nov future spread was -$2.20.

Soybean planting reported June 17th were 85% compared to 71% last week, 98% last year, and a 5-year average of 91%. Soybeans emerged were 66% compared to 48% last week, 94% last year, and a 5-year average of 80%. Soybean condition was reported for the first time this year as 64% good to excellent (56% last year) and 6% poor to very poor (12% last year). In Tennessee soybeans planted were 62% (5-year average 79%) and soybeans emerged were 40% (5-year average 61%). Having 40% of the crop priced at this point should be considered with movement towards the producers pre-harvest pricing level considered if prices rally. Downside protection could be achieved by purchasing a $12.80 November Put Option which would cost 71 cents and set a $12.09 futures floor.

Wheat

Nearby and Fall Wheat Futures Prices

Historical July Wheat Futures Prices

Weekly exports were within expectations for old crop and new crop. Net sales were 15.9 million bushels for 2013/14 marketing year and 0.1 million for 2014/15. Exports were 22.7 million bushels. USDA is projecting sales of 975 million bushels for the current marketing year.  Jul/Sep future spread was 7 cents.

Nationally, winter wheat heading as of June 17th was reported at 89% compared to 82% last week, 94% last year, and a 5-year average of 91%. Winter wheat harvest was reported at 11% compared to 5% last week, 51% last year, and a 5-year average of 25%. Crop condition ratings for winter wheat were 31% good to excellent compared to 31% last week and 54% last year; poor to very poor were 43%, compared to 42% last week, and 17% last year. In Tennessee winter wheat was reported as 98% turning color (5-year average 99%), 65% ripe (5-year average 86%), and 11% harvested (5-year average 45%). Nationally, spring wheat planting was at 92% compared to 87% last week, 100% last year, and a 5-year average of 97%. Spring wheat emerged was 84% compared to 71% last week, 100% last year, and a 5-year average of 94%. Spring wheat condition was reported as 68% good to excellent compared to 62% last week and 76% last year; and 5% poor to very poor compared to 7% last week and 3% last year. Currently producers should consider having 50% of their crop priced or the amount they price prior to harvest. A $7.05 September Put Option would cost 31 cents and set a $6.74 futures floor.

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