All posts by Chuck Danehower, Extension Area Specialist - Farm Management

Tennessee Market Highlights

Corn, cotton, and soybeans were up and wheat was down for the week.

Soybean prices continue to whipsaw based on news/speculation regarding three issues: 1) China-U.S. trade negotiations; 2) Brazilian weather – specifically dry conditions in the northeast; and 3) export sales (1 and 2 are driving 3). Availability of export data has been reduced due to the partial government shutdown leading to a greater divergence in export sales estimates. USDA reports can be viewed as a type of baseline line that provides market participants with a common estimate to base trading decisions on. This is not to say that the USDA estimates are correct or more accurate than estimates provided through other market sources, however the USDA estimates provide an equal starting point for market participants. Individual opinions, about the accuracy of the USDA’s estimates, will deviate substantially and allow traders to roll the dice one way or the other. Continue reading at Tennessee Market Highlights.


Tennessee Market Highlights

Corn and soybeans were down; cotton was mixed; and wheat was up for the week.

The partial government shutdown has resulted in several key reports (WASDE, Crop Production, and Grain Stocks being delayed. Reports will be released, however the USDA will determine the release schedule after the government resumes normal operations. An addition consequence of the partial shutdown is the inability for producers to complete paper work at FSA for Market Facilitation Program (MFP) payments. The payments were provided to producers to help mitigate the impact of retaliatory tariffs on commodity prices. The application dead-line was initially set as January 15, 2019, however USDA Secretary of Agriculture Sonny Perdue extended the deadline indicating: “We will therefore extend the application deadline for a period of time equal to the number of business days FSA offices were closed, once the government shutdown ends…”. This should allow producers time to complete the required paper work to obtain payments for 2018 production. Continue reading at Tennessee Market Highlights.


Tennessee Market Highlights

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Corn, cotton, soybeans, and wheat were up for the week.

2018 was an eventful year in corn, cotton, soybean, and wheat markets.
Trade, domestic policy, global economic growth, large yields, and poor harvest conditions all had substantial impacts on commodity prices. As always, supply and demand played an important role in commodity markets however, 2018 will likely be remembered for the many external influences – trade disruptions, Market Facilitation Program payments, a New Farm Bill, and government shut down to name a few – that inserted
tremendous volatility into commodity prices and producer profitability.

Looking out to the 2019 crop some price prospects have improved, compared to 2018, others have deteriorated. Last year at this time the new crop harvest contracts (2018 crop year) for the month of December (2017) averaged: $3.84/bu for corn; $9.91/bu for soybeans; 72.74 cents/lb for cotton; and $4.50/bu for wheat. In 2018, the new crop harvest contract (2019 crop year) for the month of December (2018) averaged: $4.01/bu for corn; $9.48/bu for soybeans; 76.25 cents/lb for cotton; and $5.34/bu for wheat. So the good news is corn, cotton and wheat were up 17 cents, 3.51 cents, and 84 cents (soybean prices were down 43 cents form a year ago). Continue reading at Tennessee Market Highlights.


Tennessee Market Highlights

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Corn, cotton, soybeans, and wheat were down for the week.

On Monday, the USDA confirmed that a second round of payments under the Market Facilitation Program (MFP) would be provided to several commodities, including: corn, cotton, soybeans, and wheat. Previously payments were announced on 50% of 2018 production. This week’s announcement provided payments on the remaining 50% of 2018 production. The MFP payments were implemented to assist producers that were adversely affected by retaliatory tariffs. Producers are required to complete the MFP application (Form CCC-910) at USDA-FSA prior to January 15, 2019, however they have until May 1 to certify production. MFP payment rates are: $0.06/lb for cotton; $0.01/bu for corn; $1.65/bu for soybeans; and $0.14/bu for wheat. Combined payment limits of  $125,000 for corn, cotton, soybeans, and wheat are capped per person or legal entity. It is important to note that production is certified by the producer, however it is important that appropriate records are  maintained for verification purposes (including any quality  adjustments). Continue reading at Tennessee Market Highlights.


Tennessee Market Highlights

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Corn and wheat were mixed; cotton and soybeans were down for the week.

Announcement of Chinese purchases of soybeans was welcome news early in the week, however the magnitude of the purchases remains to be seen. As such, entering the weekend soybeans retreated from mid-week highs. Next week, markets will pay close attention to the USDA export sales numbers (numbers are always lagged), hints of additional/future purchases, and progress on the resolution of the China-US trade dispute.

In December, the 2019 (2018) new crop harvest futures contract for: corn has averaged $4.03/bu ($3.84/bu); soybeans have averaged $9.58/bu ($9.91/bu); wheat has averaged $5.35/bu ($4.50/bu); and cotton has averaged 77.84 cents (72.74 cents). So far in December, new crop: corn is up 19 cents, soybeans are down 33 cents, wheat is up 85 cents, and cotton is up 5.1 cents. Continue reading at Tennessee Market Highlights.


Supply and Demand Estimates and Profitability Outlook

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Supply and Demand Estimates and Profitability Outlook

Monthly Crop Outlook 12 11 18 is a summary of the USDA’s monthly World Agricultural Supply and Demand Estimates (WASDE) report. Domestic balance sheets for corn, soybeans, cotton, and wheat are displayed along with price reaction in futures markets for each commodity on the day of the report release. Additionally, supply and demand estimates for key importing and exporting countries are provided for the current month along with change in estimates from the previous report. The Profitability Outlook section contains estimated returns per acre for each commodity based  on 2018 Tennessee state average/trend yields and current price offerings (note: cotton prices include a seed and hauling rebate). Variable expenses are based on the University of Tennessee Extension 2018 Row Crop Budgets. Prices are updated monthly; expenses are updated as warranted during the year and may be different than the expenses contained in the 2018 Row Crop Budgets. This section provides an estimation of the current relative profitability amongst major row crops in Tennessee.
The report is prepared monthly by Dr. Aaron Smith and Chuck Danehower.

Tennessee Market Highlights

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Corn, cotton, wheat, and soybeans were up for the week.

For the month of November, March 2019 corn futures were up 2 cents  (opened at $3.75 ¾ and closed at $3.77 ¾) with a trading range of $3.67 ¼ to $3.90; December 2019 corn futures were up 1 ¾ cents (opened at $3.98 and closed at $3.99 ¾) with a trading range of $3.91 ¼ to $4.06 ¾; January 2019 soybean futures were up 44 ½ cents (opened at $8.50 ¼ and closed at $8.94 ¾) with a trading range of $8.45 ¾ to $9.00 ¾; November 2019 soybean futures were up 37 cents (opened at $9.02 ¼  and closed at $9.39 ¼) with a trading range of $8.98 to $9.48; March 2019 wheat futures were unchanged for the month (opened and closed at $5.15 ¾) with a trading range of $5.03 ¼ to $5.29; July 2019 wheat futures were down 6 ¼ cents (opened at $5.33 ½ and closed at $5.27 ¼) with a trading range of $5.17 to $5.47 ¾; March 2019 cotton futures were up 0.61 cents (opened at 78.3 and closed at 78.91) with a trading range of 77.18 to 82; and December 2019 cotton futures were up 0.08 cents (opened at 76.95 and closed at 77.03) with a trading range of 76.24 to 79.

Commodities were up across the board this week. Looking toward to the 2019 crop, producers may want to consider pricing some production with December corn futures currently above $4 and November soybean futures above $9.50. This early in the 2019 production season it is not advisable to get too aggressive with pricing but starting to consider price offering when futures prices are near these level is warranted. Pricing 10-20% should be considered given the large amount of trade, political, and global economic uncertainty. Continue reading at Tennessee Market Highlights.


Tennessee Market Highlights

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Corn, cotton, wheat, and soybeans were up for the week.

A strong finish to the week, due to optimism regarding trade discussions, led prices to close up for the week across the board. Markets will closely monitor trade news out of Buenos Aires, Argentina where G-20 leaders are meeting November 30 and December 1. The anticipated meeting between Presidents Trump and Xi (on Saturday) will dictate price direction early next week, particularly for soybeans. Positive news, indicating a path toward a trade dispute resolution between the world’s two largest economies, will likely result in a continuation of the late week rally, possibly breaking through strong resistance at $9.00 (January soybean contract). Negative reports could trigger a retest of the six month low of $8.26 (January soybean contract).

Total U.S. export commitments (accumulated exports and outstanding sales) for corn, soybeans, and wheat continue to languish well below the required pace to meet USDA’s marketing year projection for the 2018/19 marketing year. Cotton, the lone bright spot, has seen sales wain in recent weeks after very strong sales this summer and early fall. Currently, cotton export commitments are 70% of the USDA marketing year total well above the 5-year average pace of 58%. By comparison, corn, soybean, and wheat export commitments (5-year averages) are 41% (46%), 45% (71%), and 54% (73%). Continue reading at Tennessee Market Highlights.