Corn: For the week, December corn futures have traded mostly sideways. Corn futures increased slightly yesterday following the USDA World Agricultural Supply and Demand Estimate (WASDE). The USDA raised the national corn yield to 171.8 BPA, up from 169.9 BPA September estimate. The increase is mostly attributed to abundant rainfall nationwide along with milder temperatures. Although ending stocks are projected to increase, the bullish news from the soybean market has spilled over into the corn market, pulling corn futures higher. Locally, cash basis for corn averaged -$0.23. The weakness in basis is causing many producers to put corn in the bin. With only 22% of the corn crop harvested, the true size of the crop is unknown. However, over the next week or two, we will get a really good handle on just how large the crop will be.
Soybeans: November soybean futures have increased by $0.26 this week. The increase can be attributed to the latest USDA report. The USDA lowered the national yield by only 0.4 BPA. However, that lowered ending stocks by 45 million bushels. There is still a very large crop out there in sheer acres along. The decrease in yield has been a welcomed relief to local farmers that have been battered by very weak basis this harvest. Locally, basis has been improving with the local basis averaging -$0.25 for soybeans. That is a $0.14 improvement over last week’s levels. Currently, only 36% of the U.S. soybean crop has been harvested. Farmers with bushels unsold and with no storage will need to keep an eye on prices while they are above $9.70.
Wheat: July wheat futures have declined by $0.06 this week. The decline can be attributed partially to the USDA report. The USDA report raised wheat ending stocks by 37 million bushels. That combined with good yields being reported in other countries has been bearish news for the wheat market. Large wheat supplies look to linger for the foreseeable future. As Tennessee producers begin to ponder their wheat acres, UT Extension wheat crop budgets are available at: https://ag.tennessee.edu/arec/Documents/budgets/crops/WheatFallAmend.pdf
This resource can be used in helping producers decide the profitability of wheat for the 2018 crop year. Locally, wheat basis averaged -$0.09 as of market close.
Cotton: December cotton closed today at 68.62. Cotton has traded sideways for the week. With harvest being in full swing, the size of the crop is still being determined. The USDA reduced the national yield from 908 lbs. per acre to 889 lbs. per acre. The reduction in yield is projected to have a 0.2 million bale net reduction in ending stocks. Export demand is forecasted to be a bit lower, but still strong. Cotton equities continue to range between $0.12 and $0.13.
Take Home Message: I want to reiterate that farmers with storage can also consider placing their grain in the USDA’s CCC loan. The USDA is currently paying $2.07 on corn, $5.07 on soybeans, and $0.495 on cotton. The interest rate on the loan is 2.25%. The loan can be used up to 9 months. Some producers may be able to place their crop in the loan and pay down debts with higher interest rates to lower their overall expenses.
The uptick in soybean prices, especially the $0.26 increase, due to the USDA report is a potential selling opportunity for unpriced bushels.