West Tennessee grain bids are in the attached PDF located at the bottom of the article.
Corn: Corn exports were reported to be up from last week in the latest export inspection report released today by the USDA. This week’s total exports was higher than anticipated and helped corn futures close a little higher today. The price discovery period for crop insurance ended February 29, 2016. Based on December corn futures, the price for 2016 will be approximately $3.86 for corn. The USDA has yet to officially release the pricing information, but this is what analysts are predicting the figure to be. September corn futures have traded $0.03 lower since the market’s open on Monday. The average basis for new crop corn in West Tennessee increased by $0.01 over last week’s levels.
Soybeans: Soybean exports were up this week according to the weekly USDA export report. In fact, exports were reported to be up roughly 18% compared to last week’s export levels. Brazil continues to harvest their soybean crop, which adds more to global soybean supplies. The South American crop could keep a lid on soybean prices for the near future as the crop size is estimated to relatively large. As mentioned above, the price discovery for crop insurance ended with the close of the month of February. Analysts are estimating that the price farmers will receive on crop insurance will be $8.85 for soybeans. Keep in mind that the USDA has yet to release the official figures. November soybean futures have decreased by $0.02 since the market’s open on Monday morning. The average basis for new crop soybeans in West Tennessee declined by $0.02 since last week.
Wheat: The latest USDA report indicated that 59% of the Kansas wheat crop is rated good-to-excellent, which is an improvement over last month’s report. The extended forecast looks to be warmer in that region. So, a threat of the crop being damaged on a large scale appears to be minimal at this point in time. Weekly wheat exports were lower than last week’s based on the report released by the USDA today. Analysts are reporting that the crop insurance price for wheat in 2016 is going to be near $5.13. July wheat futures have increased by $0.04 since the market’s open on Monday. The average local harvest basis for West Tennessee decreased by $0.03 since last week.
Cotton: December cotton futures closed at 56.01. Cotton loan options (equities) are approximately $0.11 to $0.13 for new crop cotton. Cotton prices have been trending lower over the past few weeks. This has been primarily due to the fear that China is going to release cotton stocks onto the market. If this happens, cotton prices will be negatively impacted. Delta Farm Press published a good article titled Cotton marketing: be patient, cautious, alert by Ron Smith that painted a good picture of the potential direction cotton prices. The gist of the article was that consumption is beginning to outpace production, which could lead to higher prices in the long term. Of course, only time will tell if that comes to fruition.
Take Home Message: Until we start receiving acreage reports from USDA, commodity prices will fluctuate based on what happens in outside markets and the crop size in South America. Producers should keep an eye out for the official figures from the USDA’s Risk Management Agency for the insurance price levels for commodities. The deadline to purchase crop insurance is March 15, 2016 for spring planted crops.
Grain prices are as of approximately 3:00 PM CST on 3/3/2016. Grain bids, futures, and basis are subject to change. Producers should stay in contact with their local grain buyers and/or cotton brokers for the most updated commodity price information. The information contained in this newsletter is for informational purposes only and does not constitute any offer to buy/sell any commodity.UT Extension Grain Newsletter 3-2-2016
