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Weekly Crop Comments

Overview

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Wheat and cotton were down; soybeans and corn were mixed for the week. On Friday June 28 the USDA released Acreage and Grain Stocks reports. Total U.S. principle crop acres decreased 0.7% from 2012 to 325.6 million acres. Corn planted increased 0.1% from USDA March estimates to a record 97.4 million acres. Initial harvested acreage projections were 89.1 million acres. In Tennessee corn planted was 950,000 acres down 90,000 from 2012. Soybean acres planted increased 0.8% from USDA March estimates to 77.7 million acres. Initial harvested acreage projections were 76.9 million acres. In Tennessee soybean acres planted were 1.36 million acres up 100,000 from 2012. Cotton planted increased 2.1% from USDA March estimates to 10 million acres. In Tennessee cotton planted was 260,000 acres down 120,000 from 2012. Estimated 2013 U.S. cotton acres planted are down more than 2 million acres compared to 2012. Wheat planted increased 0.2% from USDA March estimates to 56.5 million acres. Initial harvested acreage projections
were 45.7 million acres. Winter wheat harvested acres were estimated at 32.3 million down 1.3% from March and 7.4% from 2012. Estimated winter wheat yield in the US was 46.1 bu/acre. In Tennessee wheat acres were estimated at 560,000 up 140,000 from 2012. Harvested acres were projected at 490,000. The Grain Stocks report indicated 2.7 billion bushels of corn, 0.72 billion bushels of wheat, and 0.43 billion bushels of soybeans. Estimated stocks for all three commodities were lower than trade expectations and below 2012 estimates. Overall the Grain stocks report should be considered neutral to bullish, however the acreage report was bearish and had the predominant impact on the markets Friday. A complete analysis of both reports will be posted Monday.

Corn

Nearby and Harvest Corn Futures Prices

Historical September Corn Futures Prices

Weekly exports were above expectations with net sales of 19.3 million bushels (13.2 million bushels for the 2012/13 marketing year and 6.1 million bushels for the 2013/14 year). Exports were 6 million bushels. Last week ethanol production increased 12,000 barrels per day to 885,000 barrels per day. June 21th ending ethanol stocks decreased to 16.29 million barrels from 16.45 million. Jul/Sep and Jul/Dec future spreads were -132 cents and -168 cents, respectively.

Crop progress report released June 24th reported corn emerged at 96% compared to 92% last week, 100% last year, and 99% for the 5-year average. Corn condition was reported as 65% good to excellent compared to 64% last week and 56% last year; 8% poor to very poor the same as last week and 14% last year. In Tennessee corn silking or beyond was reported at 6% (5-year average 31%) and corn condition was 78% good to excellent and 5% poor to very poor. Producers should consider having at least 40% of their crop priced at this point and look for any rallies as an opportunity to price additional production. If the USDA acreage report is accurate and yields are 156+ bu/acre harvest prices will drop substantially. From a price risk management standpoint a $5.50 September Put Option costing 27 cents would establish a $5.23 futures floor or a $5.20 December Put Option costing 40 cents would establish a $4.80 futures floor.

Soybeans

Nearby and Harvest Soybean Futures Prices

Historical November Soybean Futures Prices

Weekly exports were within expectations with net sales of 17.1 million bushels (0.5 million bushels for 2012/13 and 16.6 million bushels for 2013/14). Exports were 8.2 million bushels. Jul/Nov future spread was -$3.12.

Soybean planting was reported June 24th at 92% compared to 85% last week, 99% last year, and a 5-year average of 95%. Soybeans emerged were 81% compared to 66% last week, 98% last year, and a 5-year average of 89%. Soybean condition was reported as: 65% good to excellent compared to 64% last week and 53% last year; and 7% poor to very poor compared to 6% last week and 15% last year. In Tennessee soybeans planted was reported at 73% (5-year average 89%), soybeans emerged were 54% (5-year average 74%), and crop condition was 81% good to excellent and 4% poor to very poor. Having 40% of the crop priced at this point should be considered. Downside protection could be achieved by purchasing a $12.60 November Put Option which would cost 63 cents and set an $11.97 futures floor.

Wheat

Nearby and Fall Wheat Futures Prices

Historical July Wheat Futures Prices

Weekly exports were above expectations with net sales of 26.9 million bushels for 2013/14 marketing year. Exports were 17.6 million bushels. Jul/Sep future spread was 9 cents.

Winter wheat heading as of June 24th was reported at 95% compared to 89% last week, 97% last year, and a 5-year average of 95%. Winter wheat harvest was reported at 20% compared to 11% last week, 63% last year, and a 5-year average of 37%. Crop condition ratings for winter wheat were: 32% good to excellent compared to 31% last week and 54% last year; 43% poor to very poor compared to 43% last week and 17% last year. In Tennessee winter wheat was reported as:  91% ripe compared to a 5-year average 97% and 41% harvested compared to a 5-year average 75%. Spring wheat planted was reported as: 96% compared to 92% last week, 100% last year, and a 5-year average of 99%. Spring wheat emerged was 90% compared to 84% last week, 100% last year, and a 5-year average of 97%. Spring wheat condition was reported as: 70% good to excellent compared to 68% last week and 77% last year; 5% poor to very poor compared to 5% last week and 4% last year. A $6.60 September Put Option would cost 25 cents and set a $6.35 futures floor.

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