Commodity Market Update – 11/15/2018

Author:  Comments Off on Commodity Market Update – 11/15/2018

Corn: December futures closed at $3.67, up only half a cent from the market open. For the week, corn futures have declined approximately two cents from the market’s open on Monday. The USDA’s latest World Agricultural Supply and Demand Estimate (WASDE) showed that ending stocks to continue to be drawn down due to steady demand for corn. Domestic consumption is estimated to be above 2016 and 2017 levels. However, the WASDE report did indicate that global corn production is expected to be higher due to increase production in China. Production is also forecasted to be higher for Ukraine, Argentina, and Russia. One positive note is that due to an increase in domestic consumption the stocks to use ratio is lower for corn right now. The stocks to use ratio is a simple measurement of total supply to total use. The lower the percentage tends to result in a higher price. The ratio is currently projected at 11.96% for 2018 compared to 14.78% for 2017. Producers with grain on either a deferred pricing contract or in storage should pay attention to local grain elevators’ basis levels to gauge their decision to store grain or hold onto it. Futures levels are just as crucial, but basis tends to fluctuate past harvest quite a bit.

Soybeans: January futures closed at $8.89, up five cents from today’s market open. For the week, January soybean futures have increased by three cents. The WASDE report for November showed that the exports for U.S. soybeans are expected to decline. The decline in exports resulted in an increase in ending stocks. The trade issues between the U.S. and China continue to persist. Thankfully, the FSA payment that producers are set to receive will help to alleviate some of the loss of futures prices. However, the weather issues that we have experienced this fall have resulted in discounts that could, and have in some cases, exceed the FSA payment of $1.65 per bushel. The latest WASDE report did indicate that soybean production would be lower for the U.S., exports were reduced, and ending stocks would be increased, which we have already discussed. Exports are expected to increase to other nations besides China later in the year, which is positive for U.S. prices. Producers with soybeans in storage should continue to monitor basis levels post-harvest to see when they need to either move their soybeans or not.

Wheat: July wheat futures closed at $5.32 today, which is up a nickel from the market’s open on Monday. The wheat price forecast from the USDA was unchanged at an average price of $5.10 per bushel. Wheat prices were not raised due to higher global wheat supplies. Wheat prices for 2019 do look to be better than 2018. Producers that were able to plant their crop in Tennessee should monitor prices from here into the spring to decide what sales they need to get on the books. Many acres have yet to be planted due to the rainfall we have received. The average new crop wheat price for West Tennessee was $5.37 as of this afternoon. Producers should continue to monitor price levels for sales if they exceed your breakeven levels.

Cotton: Equities for 2018’s crop are ranging between $0.17 and $0.18. Equities for 2019’s crop are averaging $0.19. Cotton producers should also remember to sign up for the Seed Cotton Program at their local FSA office before December 7, 2019.

Take Home Message: Producers with grain either in storage or on a deferred pricing contract, including basis only and HTA’s, should monitor futures prices amid a very messy harvest.

West Tennessee Grain Bids 11-15-2018

Print Friendly, PDF & Email