Weekly Crop Comments

Overview

Soybeans and corn were down; cotton was mixed; and wheat was up for the week. Corn prices decreased this week and appear to be poised to test support at the 52 week low of $4.45/bu. If December corn drops below this key support level, look for prices to continue to drop as harvest moves north. Corn yields continue to surprise producers as harvest progresses. Yields in the north western Corn Belt and areas with late planted corn will be key in determining where prices bottom out at. In Tennessee, corn yields have exceeded expectations in many areas as harvest approaches 25% complete. This week soybeans retreated more than 80 cents from last week’s highs of over $14.00/bu. Production concerns still exist in many northern states however in much of the mid-south and south eastern states soybean yields are projected well above trend. Pricing some soybean production with futures prices above $13.00 should be considered by producers. At this time, soybeans have more short term upside from their current price than corn, however as soybean harvest moves further north lingering production concerns will be eliminated and prices may continue to drop. The lateness of the soybean crop remains a concern (evidenced by the volatility the past few weeks in soybean futures) however with each passing week that uncertainty is slowly being removed and we have seen prices react downward this week. Cotton prices are up from last week and appear to once again be entrenched in the 82 to 88 cent trading range we have seen for much of the past six months. There is some short term positive price implications as quality concerns in some areas may support December future prices above the 85 cent range, but the extended outlook for cotton is still dampened by Chinese stock concerns. Wheat prices remain below the $6.50/bu level as projected record Canadian wheat harvest along with continued strong supply from Eastern Europe have provided downward price pressure. In regards to wheat, the question is has the bottom of the market been established at the $6.35 level or is there another move toward lower prices coming. For now at least it appears that wheat prices have stabilized in the $6.40 to $6.60/bu range.

Corn

Weekly export net sales were below expectations with net sales of 17.2 million bushels for the 2013/14 marketing year. Exports for the week were 20.4 million bushels. Last week ethanol production decreased 10,000 barrels per day to 838,000 barrels per day. September 13th ending ethanol stocks decreased 100,000 barrels as last week at16.2 million barrels. Dec/Mar future spread was 12 cents.

USDA crop progress report released September 16th reported corn dough or beyond at 97% compared to 92% last week, 100% last year, and 97% for a 5-year average. Corn dented or beyond was reported as 81% compared to 64% last week, 97% last year, and a 5-year average of 86%. Corn mature was reported as 22% compared to 9% last week, 73% last year, and a 5-year average of 41%. Corn harvested was 4% compared to 24% last year and a 5-year average of 10%.  Corn condition was reported as 53% good to excellent compared to 54% last week and 24% last year; 18% poor to very poor compared to 17% last week and 50% last year. In Tennessee, corn mature was 67% (5-year average 83%); corn silage harvested was 84% this week (5-year average 91%); corn harvest was 21% (5-year average 48%) and corn condition was 85% good to excellent and 2% poor to very poor. Downside price protection could be obtained by purchasing a $4.55 December Put Option costing 19 cents establishing a $4.36 futures floor.

Soybeans

Weekly export net sales exceeded expectations with net sales of 33.9 million bushels for 2013/14. Exports for the week were 2.7 million bushels. Nov/Jan future spread was 3 cents.

Nationally, soybeans dropping leaves were 26% compared to 11% last week, 54% last year, and a 5-year average of 35%. Soybean condition was reported as: 50% good to excellent compared to 52% last week and 33% last year; 18% poor to very poor compared to 16% last week and 36% last year. In Tennessee, soybeans dropping leaves was 16% (5-year average 40%), and crop condition was 81% good to excellent and 4% poor to very poor. Downside price protection could be achieved by purchasing a $13.20 November Put Option which would cost 36 cents and set a $12.84 futures floor.

Wheat

Weekly exports exceeded expectations with net sales of 25.8 million bushels for the 2013/14 marketing year. Exports were 44.3 million bushels. Dec/Mar future spread was 11 cents.

Nationally, spring wheat harvested was 90% compared to 80% last week, 99% last year, and a 5-year average of 87%. Winter wheat planting was reported at 12% compared to 5% last week, 10% last year and a 5-year average of 12%. Downside price protection could be obtained by purchasing a $6.60 July 2014 Put Option costing 50 cents and establishing a $6.10 futures floor.