Corn: Corn futures traded slightly higher due to better than expected export figures from the Thursday export report. Corn prices could face a little pressure over the next few days due to favorable forecasts in key corn growing areas in the Midwest. The 6-to-10 day forecast looks to be dry with favorable soil temperatures. According to the NASS April 11, 2016 crop progress report, only 4% of the U.S. corn crop has been planted. So, we still have quite a ways to go before we see how large the 2016 corn crop will be. Some good news is that corn futures are trading at the levels they were prior to the March 31st planting intentions report. September corn futures have increased by $0.12 since last week while the average new crop harvest basis increased by $0.02.
Soybeans: Soybeans has been the market leader again this week so far. Soybeans have rallied on support from a combination of things. First, the USDA provided some support in the most recent WASDE report as ending stocks were trimmed by 15 million bushels. Second, export business has been better than expected. Third, Chinese demand has been better than anticipated with the USDA raising the projection for China’s imports of soybeans by 37 million bushels. Finally, harvest weather in South America has been less than conducive for a smooth harvest for farmers in that region. All of those factors combined with the strengthening of the Brazilian real, or weakening of the U.S. dollar, -take your pick- has led to higher soybean prices. Since last Thursday, November soybean futures have increased by $0.40. Yes, $0.40! That is not a typo. However, new crop soybean basis has weakened by $0.03. Producers should view this rally as a point to book some soybean sales.
Wheat: The winter wheat condition was rated as 56% good-to-excellent in Monday’s crop progress report. Wheat prices have remained relatively stable from last week’s levels. This is due in part to the improvement in weather conditions in key wheat growing states. The latest WASDE report from the USDA increased the projected ending stocks for wheat by 51 million bushels along with lowering the total domestic demand for wheat by 10 million bushels. This will add to the bearish tone in the wheat market. Since last week, July wheat futures increased by $0.03 while the local harvest basis decreased by $0.03.
Cotton: December cotton futures closed at 60.16 today. Cotton futures have improved recently due to the expectations that China will sell cotton out of reserves at a higher price than what was previously thought. Cotton futures began to rally on Friday when details of the Chinese Reserve selling price was disclosed. Part of the selling process is to also have steep quality discounts applied to the selling price. These combined factors are viewed to be favorable for cotton futures. West Tennessee cotton equities (loan options) are ranging between $0.11 and $0.12
Take Home Message: Producers should be very conscientious of current commodity price levels, particularly soybeans. Farmers now likely know their cost structure for 2016 as many inputs have been, or are being, purchased. That being said, farmers are likely very aware of what price level they have to sell their grain at to lock in a profit. In West Tennessee, not many producers are making corn sales due to price levels, especially following the March 31st report. However, since March 1, 2016, November soybean futures have rallied $0.90! It is not often that we experience such a market move in only 45 days. Farmers should consider selling a portion of their soybean crop if it can be done at profitable levels. Grain Newsletter 4-14-2016