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Weekly Crop Comments : Harvest Corn And Soybean Futures Made Moves Lower This Week

Corn, soybeans, cotton, and wheat were down for the week. Harvest corn and soybean futures made moves lower this week. November soybeans established a new low of $10.01 before rebounding on Friday to $10.21. December corn also set new contract lows at $3.43. Record production for corn and soybeans continues to become a more apparent reality with each passing week. Frost concerns will continue to be prevalent in northern production areas particularly for late planted soybeans in the Dakotas and Minnesota. Producers should be looking at any rallies in corn and soybean futures markets as opportunities to price additional production. December cotton futures closed down, for the first week in nearly a month. Prices have traded between 62 and 68 cents per pound since July 25th. December wheat also set a new low this week at $5.27. Tennessee wheat producers in Crockett, Dyer, Gibson, Haywood, Henry, Obion, Robertson, and Weakley counties (other Tennessee counties are not eligible for SCO coverage for winter wheat for 2015) should contact their crop insurance representatives to enroll their 2015 winter wheat crop in the new Supplemental Coverage Option (SCO) before September 30th. By enrolling wheat in SCO producers will have access to the SCO benefit should they chose to enroll their farms in PLC. If producers chose to elect the ARC program they can withdraw from SCO coverage without penalty by the earlier of their acreage reporting date or December 15, 2014. Should producers not enroll wheat acres in SCO by September 30th they will not be eligible for SCO coverage for wheat in 2015 regardless of program selection. Additional details and helpful links can be found on the University of Tennessee Extension's 2014 Farm Bill webpage.

Corn

December 2014 corn futures closed at $3.56 down 8 cents from last week with support at $3.42 and resistance at $3.64. Across Tennessee average basis (cash price- nearby future price) weakened in Memphis, Northwest Barge Points, and Upper-middle Tennessee and strengthened in Northwest and Lower-Middle Tennessee. Overall basis for the week ranged from 32 under to 11 over the September futures contract with an average of 7 under at the end of the week. September 2014 futures closed at $3.46. Corn net sales reported by exporters from August 22nd to 28th were within expectations with net sales reductions of 0.3 million bushels for the 2013/14 marketing year and below expectations at 20.7 million bushels for the 2014/15 marketing year. Exports for the same time period were up from last week at 40.3 million bushels. Corn export sales and commitments were 100% of the USDA estimated total annual exports for the 2013/14 marketing year (September 1 to August 31) compared to a 5-year average of 107%. Ethanol production for the week ending August 29th was 921,000 barrels per day up 8,000 barrels per day. Ending ethanol stocks were 17.673 million barrels up 356,000 barrels from last week. Nationally, the September 2nd Crop Progress report estimated corn dough or beyond at 90% compared to 83% last week, 82% last year, and a 5-year average of 89%; corn dented or beyond at 53% compared to 35% last week, 39% last year, and a 5-year average of 59%; corn mature at 8% compared to 4% last year and a 5-year average of 16%; and corn condition at 74% good to excellent 7% poor to very poor. In Tennessee the Crop Progress report estimated, corn dough or beyond at 98% compared to 96% last week, 97% last year, and a 5-year average of 99%; corn dented or beyond at 82% compared to 66% last week, 89% last year, and a 5-year average of 93%; corn mature at 18% compared to 24% last year and a 5-year average of 51%; corn harvested at 2% compared to 2% last year and a 5-year average of 18%; and corn condition at 78% good to excellent and 4% poor to very poor. This week December 2014 corn futures prices traded between $3.43 and $3.67. Dec/Mar and Dec/Sep future spreads were 12 cents and 35 cents, respectively.

January cash forward contracts at elevators and barge points for the week averaged $3.47 with a range of $3.19 to $3.82. March 2015 corn futures closed at $3.68 down 9 cents from last week with support at $3.55 and resistance at $3.76. September 2015 futures closed at $3.91. Downside price protection could be obtained by purchasing a $4.00 September 2015 Put Option costing 43 cents establishing a $3.57 futures floor.

Soybeans

November 2014 soybean futures closed at $10.21 down 3 cents for the week with support at $9.95 and resistance at $10.36. November/December soybean to corn price ratio was 2.87 at the end of the week. For the week, average soybean basis weakened or remained unchanged in all five regions. Basis ranged from 25 under to 100 over the November futures contract at elevators and barge points. Average basis at the end of the week was 17 over the November futures contract. Net sales reported by exporters were within expectations with net sales cancelations of 3.2 million bushels for the 2013/14 marketing year and below expectations for the 2014/15 marketing year with net sales of 31.9 million bushels. Exports for the same period were down from last week at 1.3 million bushels. Soybean export sales and commitments were 103% of the USDA estimated total annual exports for the 2013/14 marketing year (September 1 to August 31), compared to a 5-year average of 105%. The Crop Progress report estimated soybeans setting pods at 95% compared to 90% last week, 91% last year, and a 5-year average of 95%; soybeans dropping leaves at 5% compared to 3% last year and a 5-year average of 5%; and soybean condition at 72% good to excellent 6% poor to very poor. In Tennessee, the Crop Progress report estimated, soybeans setting pods at 92% compared to 84% last week, 88% last year, and a 5-year average of 95%; soybeans dropping leaves at 2% compared to 3% last year and a 5-year average of 12%; and soybean condition at 75% good to excellent 5% poor to very poor. This week November 2014 soybean futures traded between $10.01 and $10.38. November cash forward contracts averaged $10.16 with a range of $9.80 to $10.47.

January 2015 soybean futures closed at $10.28 down 4 cents from last week with support at $10.03 and resistance at $10.42. Nov/Jan and Nov/Nov future spreads were 7 cents and 15 cents. November 2015 futures closed at $10.36. Downside price protection could be achieved by purchasing a $10.40 November 2015 Put Option which would cost 72 cents and set a $9.68 futures floor.

Cotton

December 2014 cotton futures closed at 64.31 down 2.26 cents for the week with support at 62.96 and resistance at 66.26. Net sales reported by exporters were down from last week at 82,900 bales for the 2014/15 marketing year and 2,600 bales for the 2015/16 marketing year. Exports for the same period were up from last week at 104,200 bales. Cotton export sales were 51% of the USDA estimated total annual exports for the 2014/15 marketing year (August 1 to July 31), compared to a 5-year average of 43%. Oct 2014 cotton futures are trading at 66.08. The Crop Progress report estimated cotton setting bolls at 96% compared to 90% last week, 94% last year, and a 5-year average of 96%; cotton bolls opening at 31% compared to 19% last week, 15% last year, and a 5-year average of 27%; and cotton condition at 50% good to excellent 16% poor to very poor. In Tennessee, the Crop Progress report estimated cotton setting bolls at 96% compared to 92% last week, 94% last year, and a 5-year average of 99%; cotton bolls opening at 27% compared to 18% last week, 4% last year, and a 5-year average of 27%; and cotton condition at 69% good to excellent 7% poor to very poor. December cotton futures traded between 63.93 and 66.45 cents this week. Downside price protection could be obtained by purchasing a 64 cent December 2014 Put Option costing 2.40 cents establishing a 62.6 cent futures floor.

March 2014 cotton futures closed at 64.14 down 2.87 cents for the week with support at 63.26 and resistance at 65.64. Cotton adjusted world price (AWP) increased 0.31 cents to 54.40 cents. Oct/Dec and Dec/Mar future spreads were -1.77 cents and -0.17 cents.

Wheat

December 2014 wheat futures closed at $5.35 down 28 cents from last week with support at $5.21and resistance at $5.48. Net sales reported by exporters were below expectations at 6.2 million bushels for the 2014/15 marketing year. Exports for the same period were up from last week at 17.5 million bushels. Wheat export sales were 46% of the USDA estimated total annual exports for the 2014/15 marketing year (June 1 to May 31), compared to a 5-year average of 45%. The Crop Progress report estimated spring wheat harvested at 38% compared to 27% last week, 61% last year, and a 5-year average of 65%; and spring wheat condition at 63% good to excellent 8% poor to very poor. December wheat futures traded between $5.27 and $5.66 this week. December wheat to corn price ratio was 1.50. Dec/Mar and Dec/July future spreads were 18 cents and 38 cents.

March 2015 wheat futures closed at $5.53 down 29 cents from last week with support at $5.39 and resistance at $5.68. June/July 2015 cash forward contracts averaged $5.43 with a range of $5.12 to $5.76 at elevators and barge points. July 2015 wheat futures closed at $5.73. Downside price protection could be obtained by purchasing a $5.80 July 2015 Put Option costing 47 cents establishing a $5.33 futures floor.

Source : utk.edu


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