Category Archives: Marketing

UT Crop Market Update 7/28/2016

Author: Danny Morris, Ext Area Specialist - Farm Management No Comments

Corn: So far this week, September corn futures have traded lower by $0.04. Corn futures have essentially traded sideways for the past seven trading days. Without a weather scare, it seems that corn prices will continue to be abysmal. We have moved past the point of pollination and it would appear that the corn crop has not been negatively impacted by the weather. At least, that is what is being reflected in current futures prices. The USDA continues to rate 76% of the crop as being good-to-excellent with 79% of the crop silking. In the extended forecast, normal rainfall is anticipated for most of the United States over the next 6 to 10 days. Local new crop basis continues to soften as we approach harvest.

Soybeans: November soybean futures have traded sideways since the market opened on Monday morning. Soybeans face a similar fate to that of corn. Weather is expected to be favorable in many key soybean growing states as we enter into August. The forecast of ample rainfall during pod fill has the trade guessing that the soybean crop will be relatively large. That is keeping a lid on higher soybean prices. The USDA continues to rate 71% of the crop as being good-to-excellent with 35% of the crop already setting pods, which is ahead of the 5 year average. Local new crop basis continues to weaken for soybeans as we get closer to harvest.

Wheat: July 2017 wheat futures has declined by $0.14 so far this week.  The decline in wheat futures is likely a result of a decline in nearby wheat futures and a partial spillover effect from the other grains. Producers should be mindful that wheat planting is less than 3 months away and begin to monitor July 2017 wheat futures.

Cotton: December cotton futures closed at 72.97. Cotton exports continue to be strong due to Vietnam and Chinese purchases. Yesterday’s market close price was below 75.00, which may set a technical trading pattern for lower prices. Cotton equities, or loan options, continue to be approximately $0.14 to $0.15 for West Tennessee.

Take Home Message: Grain futures are struggling to hold their head above water due to favorable weather conditions across most of the Midwest. This year is setting itself up to be a year where grain may predominantly go in the bin instead of going to town. Many farmers are unwilling to price corn at these levels as a profit cannot be easily locked in. However, the same cannot be said of soybeans as a profit can still be locked in for many producers at the $10.00 mark. Producers should keep in mind that as harvest approaches we should expect to see futures trend lower. This creates two scenarios for many producers. Either look at layering sales now before harvest pressure begins to set in or store grain. Is it possible that we could see higher prices come harvest if the crop is smaller than we originally thought? Theoretically, yes. However, as long as we see good weather across the Midwest, the chances of this happening is relatively slim. Of course, there is a third scenario where producers can sale grain across the scales at harvest lows. Producers should continue to monitor their costs of production and evaluate prices. Producers are likely more willing to be aggressive sellers since many have a good feeling of what their corn yields will be as we have made it through pollination. However, price levels are preventing those sales from being made. Another option if you do not have storage is deferred pricing. Talk to your local elevators to see if deferred pricing is suitable for you. It does come at a cost per bushel, but it allows you to deliver grain and price the grain at a future date. It allows you to market your grain as if you have storage.

West Tennessee Grain Bids: Grain Newsletter 7-28-2016

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UT Crop Market Update 7/21/2016

Author: Danny Morris, Ext Area Specialist - Farm Management No Comments

Corn: September corn futures have declined by $0.18 since the market’s open on Monday morning. During today’s trade, a new contract low was established for the September futures contract. Weather continues to be the dominating factor that is pushing corn prices lower. Extended forecasts are showing milder temperatures for the Midwest for the next 30 days with some rain forecasted for most of the Midwest in August. Also, Iowa and Illinois reportedly have adequate soil moisture, which further reduces the chance of a smaller corn crop. Continue reading

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UT Crop Market Update 7/14/2016

Author: Danny Morris, Ext Area Specialist - Farm Management Comments Off on UT Crop Market Update 7/14/2016

Corn: September corn futures have traded sideways since the market’s open on Monday morning. Earlier in the week, corn futures were higher due to the USDA’s lower than expected carry out in the latest World Agricultural Supply and Demand Estimate (or WASDE) report. The WASDE report was released and it indicated that corn ending stocks were 2.08 billion bushels. This was lower than the average trade estimate of 2.205 billion bushels. Normally, when you have a report that indicates lower supplies, you would expect to see higher prices in the corn market. Continue reading

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June 10th Supply and Demand Estimates and Profitability Outlook

Author: Chuck Danehower, Extension Area Specialist - Farm Management Comments Off on June 10th Supply and Demand Estimates and Profitability Outlook

May 10th Supply and Demand Estimates and Profitability Outlook 

This link to Supply & Demand Estimates & Profitability Outlook contains 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 2015 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 2016 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 2016 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.

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Tennessee Market Highlights

Author: Chuck Danehower, Extension Area Specialist - Farm Management Comments Off on Tennessee Market Highlights

Corn, soybeans, and wheat were up; cotton was mixed for the week. Looking at the November soybean futures chart it can be seen that the November contract is now almost $2.00/bu higher than the same time last year. Continue reading at Tennessee Market Highlights.

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Tennessee Market Highlights

Author: Chuck Danehower, Extension Area Specialist - Farm Management Comments Off on Tennessee Market Highlights

Corn and cotton were up; soybeans were mixed; and wheat was down for the week. Since May 3rd the USD index has appreciated 3.8%. A stronger USD is detrimental to US agricultural exports because it makes our products more expensive to foreign buyers (simply put, it takes more of the foreign currency to buy a USD). The USD index is still down 3.5% from the beginning of the year (98.76 to 95.343). The value of the USD will be an important factor if corn, soybean, wheat, and cotton exports are to meet the USDA’s recent projections for the upcoming marketing year. Continue reading at Tennessee Market Highlights.

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UT Crop Market Update 5/20/2016

Author: Danny Morris, Ext Area Specialist - Farm Management Comments Off on UT Crop Market Update 5/20/2016

Corn: The corn market has continued its rally over the early part of this week. However, the rally was cut a bit short due to a stronger U.S. dollar. This creates a bit of headwinds for corn futures. As we get further into the planting season, the size of the crop will start to be revealed in analyst reports. Continue reading

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UT Crop Marketing Update 5/12/2016

Author: Danny Morris, Ext Area Specialist - Farm Management Comments Off on UT Crop Marketing Update 5/12/2016

Corn: It has been a wild ride in the commodity markets this week. Corn, like the other grains, has had its fair share in the roller coaster ride this week. In fact,  September corn futures opened Monday at $3.80 and closed today at $3.92. The gain of $0.12 can be attributed mostly to the fear of what will happen to U.S. corn acres along with a spillover effect from the soybean trade. The Midwest has received rainfall in key growing areas that is delaying the planting of corn. Continue reading

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