Corn: Since the market’s open on Monday, December corn futures have increased by $0.18. Corn prices have rallied on the expectation that the USDA will be forced to cut back their national yield projections. USDA is scheduled to release their monthly report and the trade is anticipating that report will include news of a lower corn production forecast. USDA currently has the corn harvest at 15.15 billion bushels. However, Reuters took a survey of analysts that indicated that the average trade estimate for the corn crop is 15.027 billion bushels. Corn harvest is underway in Kentucky, Tennessee, and parts of Illinois. Yields here in West Tennessee are varying greatly from county to county. It is still too early to estimate what our state’s yield will be. However, it seems that yields are a little better than expected. Cash bids will start to come under pressure as harvest progresses and local harvest basis declined by $0.04 cents over the course of the week. USDA’s latest national crop progress report pegged 76% of the crop was already dented while only 18% had reached maturity.
Soybeans: Since the market’s open on Monday, November soybean futures have increased by $0.28. Soybean prices have increased due to the expectation that the USDA will lower ending stocks in the monthly report that will be released on Monday morning. Currently, the USDA has ending stocks for 2015/2016 at 255 million bushels and ending stocks for 2016/2017 at 330 million bushels. The latest Reuter’s survey of analysts indicated that ending stocks for 2015/2016 will be closer to 232 million bushels with 2016/2017 ending stocks being in line with USDA’s current projections. The 2015/2016 ending stocks are believed to be lower due to better than expected exports. The demand for soybeans has remained relatively strong over the past few months. As harvest gets closer, we will start to get a better grasp on the size of the soybean crop. Once harvest does get here, we can anticipate that cash bids will come under pressure. Local harvest basis for soybeans remained unchanged from last week’s levels. The USDA continues to rate the soybean crop very favorably with 73% of the crop being rated good-to-excellent. Also, the USDA reports that 12% of the crop is dropping leaves while 97% of the crop has already set pods.
Wheat: July wheat futures gained $0.05 over the course of the week. Global wheat supplies continue to be adequate and this is keeping a lid on wheat prices. Russia is moving to lower their export tax which will mean increased competition in the global wheat market. Farmers looking to plant wheat this fall should be mindful of production costs with the current low wheat prices.
Cotton: Domestically, the cotton crop is beginning to advance closer and closer to harvest. Approximately 33% of the cotton crop has already opened, which is in line with the 5 year average. At this point in the game, any additional moisture will lower quality and could potentially reduce yield. The Ministry of Agriculture for India has released a report that indicated that their cotton crop for 2016 is much lower than what was planted in 2015. That combined with the expectations that the cotton crop in Eastern China will be lower should have a negative impact on global supplies. However, the extent of that impact will be dependent upon the demand for cotton. Low oil prices and global economic uncertainty are creating a very bearish environment for cotton prices. December cotton futures closed today at 69.18. Cotton equities are currently ranging between $0.13 and $0.14.
Take Home Message: As harvest approaches, all grain prices and cotton prices should start to come under pressure. Those producers without storage should contemplate selling unsold bushels in the event of a rally on Monday after the USDA’s report is released. Farmers with storage will likely continue to put all unpriced bushels in the bin.
West TN Grain Elevator Bids: grain-newsletter-9-9-2016
