UT Commodity Market Update 3/24/2017

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Corn: Since the market’s open on Monday morning, September corn futures have declined by approximately $0.11. This decline in prices may cause some producers to make some last minute changes to their planting intentions. With the planting intention report due out on March 31st, we will begin to see the market try to buy more acreage. This decline in prices is somewhat puzzling due to better export sales, acceptable demand from ethanol plants, and the expectation of lower acres in 2017. Farm Futures released their latest farmer survey  indicated that corn acreage should fall to 90.3 million acres in 2017. That is a decline of 3.7 million acres from 2016 levels. It may be hard to find selling points in this market until we enter into the growing season. The average basis for new crop corn averaged -$0.14 as of market close today.

Soybeans: Since March 1, 2017, November Soybean futures have declined by $0.27. The decline can be attributed to a few key issues including: a stronger dollar, a large Brazilian soybean crop, and the expectation of an increase in soybean acres in 2017. Those factors combined will put downward pressure on soybean prices for the near future. We can expect to see price volatility once the acreage report is release next week by the USDA. From a technical standpoint, soybeans are currently oversold. If soybean futures breakthrough a key price level of $9.80, we may begin to see lower prices. The average basis for new crop soybeans averaged -$0.18 as of market close today.

Wheat: July wheat futures have declined by $0.15 since the market’s open on Monday morning. The fundamentals of the wheat market have not changed over the past few months and maybe even a year now. The world’s wheat supply is very high. Also, a strong U.S. dollar does not allow for U.S. wheat to be overly competitive in the export market. The average new crop wheat basis averaged -$0.06 for West Tennessee as of market close today.

Cotton: December cotton futures closed at 75.48. West Tennessee cotton equities are ranging between $0.19 and almost $0.20 on new crop cotton. The optimism for cotton seems to remain strong with West Tennessee producers.

Take Home Message: Profitable price levels may have fallen away for some producers this week. As we near planting, we will begin to see more market volatility. It is crucial for farmers to know their cost of production and be able to identify profitable selling points when they present themselves.

West Tennessee Grain Elevator Bids: Grain Newsletter 3-24-2017

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