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Weekly Crop Comments

Overview

Soybeans and cotton were up; corn and wheat were down for the week. The USDA’s World Agricul ture Supply and Demand Estimates (WASDE) and Crop Production reports were released Thursday and provided mixed reaction. In corn, December Future prices dropped 6 cents the day the reports were released. Estimated corn yields for 2013/14 were adjusted up 0.9 bu/acre to 155.3 bu/acre. Estimated corn harvested acreage was left unchanged from the August report, as such production was increased to a projected record of 13.843 billion bushels. Corn use was not adjusted in the WASDE report. Beginning corn stocks were adjusted down 58 million bushels to 661 million bushels. Estimated U.S. average prices were decreased 10 cents on both ends of the range to $4.40 to $5.20/bu. Prices going forward are more likely to trade at the lower end of this range ($4.40 to $4.80/ bu). In soybean markets, reaction to the reports was bullish as prices moved up 37 cents on Thursday for the November futures contract. Estimated 2013/14 soybean yields were adjusted down 1.4 bu/acre to 41.2 bu/acre. Soybean acreage was not adjusted leading to a 106 million bushel reduction in estimated U.S. production. Crushing, exports and residual use was adjusted down given the reduced production prospects, tighter ending stocks, and higher anticipated prices. Estimated U.S. average prices were adjusted up $1.15/bu on both ends of the range to $11.50 to $13.50/bu. Currently, the November soybeans futures contract is 20 cents under the $14.00 mark. Prices could continue up, however if production concerns in some regions are rectified downward price pressure will ensue. Pricing some production above the $13.50/bu mark should be strongly considered by producers. In cotton, projected harvested acreage in the U.S. was up 80,000 acres and average yield was projected down 17 lbs/acre to 796 lbs/acre. The result was a decreased in estimated cotton production in the U.S. to 12.9 million bales (down 150,000 bales). Estimated world cotton stocks increased 960,000 bales to just over 94.7 million bales. China maintained their percent of world stocks at just over 61.5%. Estimated U.S. average farm prices were decreased 3 cents on both ends of the range to 69 to 85 cents/lb. Chinese reserve issues will continue to provide downward pressure on global cotton markets. Until a solution or direction by the Chinese is presented global cotton markets will continue to have limited upside mobility. Limited changes were made to wheat estimates. Imports, due to projected record Canadian wheat harvest, were adjusted up 10 million bushels and prices were adjusted up 10 cents on both ends of the range to $6.50 to $7.50/bu.

USD, Crude and Dow

Corn

Weekly export net sales were below expectations with net sales of 10.8 million bushels (a sales reduction of 2.3 million bushels for 2012/13 marketing year and 13.1 million bushels in net sales for the 2013/14 year). Exports for the week were 19.2 million bushels (2.5 million bushels before August 31 and 6.7 million bushels after August 31). A carryover of 34.5 million bushels in net sales for the marketing year ended 2012/2013 into 2013/14. Last week ethanol production decreased 29,000 barrels per day to 848,000 barrels per day. September 6th ending ethanol stocks increased 100,000 barrels as last week at16.3 million barrels. Dec/Mar future spread was 12 cents.

Historical September Corn Futures Prices

Nearby and Harvest Corn Futures Prices

USDA crop progress report released September 9th reported corn dough or beyond at 92% compared to 84% last week, 99% last year, and 94% for a 5-year average. Corn dented or beyond was reported as 64% compared to 42% last week, 92% last year, and a 5-year average of 75%. Corn mature was reported as 9% compared to 4% last week, 55% last year, and a 5-year average of 28%. Corn condition was reported as 54% good to excellent compared to 56% last week and 22% last year; 17% poor to very poor compared to 16% last week and 52% last year. In Tennessee, corn dent or beyond was 95% (5-year average 98%); corn mature was 42% (5-year average 71%); corn silage harvested was 72% this week (5-year average 86%); corn harvest was 10% (5-year average 34%) and corn condition was 85% good to excellent and 2% poor to very poor. Downside price protection could be obtained by purchasing a $4.60 December Put Option costing 19 cents establishing a $4.41 futures floor.

Soybeans

Weekly export net sales were within expectations with net sales of 17.6 million bushels for 2013/14. Exports for the week were 3 million bushels. 32.2 million bushels in net sales from 2012/2013 were carried into 2013/2014. Nov/Jan future spread was -2 cents.

Historical November Soybean Futures Prices

Nearby and Harvest Soybean Futures Prices

Nationally, soybeans setting pods were reported at 97% compared to 92% last week, 99% last year, and a 5-year average of 98%. Soybeans dropping leaves were 11% compared to 34% last year and a 5-year average of 19%. Soybean condition was reported as: 52% good to excellent compared to 54% last week and 32% last year; 16% poor to very poor compared to 15% last week and 36% last year. In Tennessee, soybeans setting pods were 93% (5-year average 99%), soybeans dropping leaves was 6% (5-year average 26%), and crop condition was 80% good to excellent and 5% poor to very poor. Downside price protection could be achieved by purchasing a $13.90 November Put Option which would cost 46 cents and set a $13.44 futures floor.

Wheat

Weekly exports were within expectations with net sales of 20.3 million bushels (20 million bushels for the 2013/14 marketing year and 0.3 million bushels for the 2014/15 marketing year). Exports were 33.5 million bushels. Dec/Mar future spread was 11 cents.

Historical July Wheat Futures Prices

Nearby and Fall Wheat Futures Prices

Nationally, spring wheat harvest was 80% compared to 64% last week, 97% last year, and a 5-year average of 79%. Winter wheat planting was reported at 5% compared to 4% last year and a 5-year average of 5%. Downside price protection could be obtained by purchasing a $6.45 December Put Option costing 22 cents and establishing a $6.23 futures floor.

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