Corn: The USDA is to release their planting intentions report next week. On Thursday, Farm Futures released their survey of farmer’s planting intentions for 2016. Their survey indicated that farmers intend to plant 90 million acres of corn, which is a 2.3% increase from last year. The abundance of grain supplies is keeping a lid on U.S. corn prices. Argentina’s government has projected that their corn crop to be approximately 37 million metric tons. This is larger than USDA’s projection of 27 million metric tons for Argentina’s crop. Over the past week, September corn futures increased by $0.01 while the average local harvest basis equaled -$0.17.
Soybeans: The USDA’s export report for this week revealed that 468,700 tons of soymeal were exported last week. This is the new high for the marketing year. Again, the USDA will release its planting intention report next week. The Farm Future’s farmer survey indicated that the crop will be near 82.2 million acres for 2016. Brazil’s harvest is almost over and Argentina is currently harvesting their soybean crop. Since March 1, 2016, November soybean futures have rallied by $0.50. When the market rewards producers with a rally like this, farmers should be wary of the price increase and consider forward contracting a portion of their crop. Over the past week, November soybean futures increased by $0.14 while the average new crop basis equaled -$0.07.
Wheat: According to a recent Bloomberg survey, there is approximately 1.354 billion bushels in storage around the globe. That sheer amount of wheat is placing downward pressure on wheat prices. Farm Futures latest farmer survey indicated that 12.6 million acres of spring wheat will be planted. This is a 5% decline from 2015. July wheat futures decreased by $0.01 since last week while the average local harvest basis equaled -$0.06.
Cotton: December cotton futures closed at 57.35. Unfortunately, cotton closed near this week’s lows. The fear of how much cotton will be sold out of China’s cotton reserves continues to be bearish for cotton prices. Mississippi State University released an article stating that the U.S. cotton acreage could be near 9.4 million acres. This is an increase of 500,000 acres from 2015’s levels.
Take Home Message: Producers should keep an eye out for the acreage report on March 31, 2016. Also, farmers should continue to monitor the rally in soybean prices and review their projected cash flow statements. If profits can be locked in at these price levels, then grain sales should be made. Grain Newsletter 3-24-2016
