Corn: March corn futures traded $0.04 higher for the week. September corn futures traded $0.04 for the week as well. The average local basis for new crop corn averaged -$0.13. The higher futures can be attributed to better than expected exports. Also, the size of the corn crop in Argentina is expected to be lower than previously thought. Abnormally dry growing conditions are causing analysts to think that the size of the overall crop will be reduced in USDA’s next report. The size of the Brazilian corn crop is also presumed to be reduced as well.
Soybeans: March soybean futures traded $0.14 lower for the week. November soybean futures traded $0.08 for the week as well. The average local basis for new crop soybean averaged -$0.20. Soybean exports have reached a seven month low. The reduction in soybean exports can be attributed to stiff competition from Brazil. The Chinese are starting to implement stricter import requirements. The revised requirements include a lower tolerance for foreign matter. This may change the tolerance levels at local elevators in the United States in the near future. Also, the size of Argentina’s soybean crop has been reduced due to dry growing conditions. However, the current projections for the Brazilian soybean crop are higher.
Wheat: July wheat futures traded $0.05 higher for the week. The average local basis for new crop wheat averaged -$0.05. Some analysts are currently reducing the estimated size of the 2018 winter wheat crop due to weather injury. However, the total damage is still unknown this time. Export competition remains very strong in the wheat market, which places pressure on U.S. wheat prices.
Cotton: December cotton futures closed today at 75.08. Cotton equities are ranging between $0.17 and $0.175 locally. Cotton acres look to be a tad higher in Tennessee in 2018 due to the perceived higher profit potential when compared to corn.
Take Home Message: With the reduction in soybean futures, producers need to monitor basis levels to see if sales can be made near the $10.00 mark. For corn, any rally in corn could be an opportunity for producers to reevaluate their crop mix for 2018. As always, producers should create a farm plan to evaluate their cost of production to be able to identify profitable selling points. If you need assistance with this, contact me at firstname.lastname@example.org to schedule a farm visit to develop a farm plan for 2018.