Corn: Corn futures continue to trend higher during this short trading week. The upward trend in corn futures is being fueled by the continuing surge in soybean prices. Also, the drought that is hitting Brazil’s second corn crop could lead to higher demand for U.S. corn. As we get further in the growing season and closer to pollination, weather will become the major factor as to the direction of corn prices. So far this year, we have adequate moisture here in West Tennessee and the corn crop looks very favorable. However, for corn prices, the weather in the Midwest is a much larger concern. September corn futures are down $0.06 since last Thursday while new crop basis weakened slightly in West Tennessee.
According to the USDA, 94% of the corn crop is planted. Here in Tennessee, 98% of the corn crop has been planted and 94% has already emerged.
Soybeans: The demand for soybeans continues to increase as meal prices and soybean futures continue to climb. In fact, the nearby futures reached their highest levels since mid-2014. Some analysts are starting to express fears that the rally could come to an end soon. If we receive adequate rainfall for the soybean crop, that very well could be the case. Since last week, November soybean futures have increased $0.32 and the local harvest basis increased by $0.02.
According to the USDA, 75% of the U.S. crop has been planted and 45% has already emerged. Here in Tennessee, 59% of the crop has been planted and 37% has emerged.
Wheat: Wheat futures continue to face an uphill battle from a fundamentals standpoint. Supplies are more than adequate and demand continues to be relatively weak. With winter wheat harvest just around the corner, even more wheat is about to hit the market. However, wheat futures were able to trade higher for the week due to the spillover effect from the soybean market. July wheat futures improved by a nickel since last Thursday while local harvest basis weakened by three cents.
According to the USDA, 84% of the U.S. crop has headed and 63% was rated good-to-excellent. Here in Tennessee, 99% of the crop has headed and 66% has already began coloring.
Cotton: December cotton futures closed at 63.04. Cotton equities, or loan options, continue to range between $0.10 and $0.12. Weather concerns in Texas are starting to worry some about the condition of the U.S. cotton crop. Some key growing areas are receiving more than adequate rainfall that could impact the condition of the cotton crop. Chinese reserve sales continue to only include domestic cotton and overall news from the Chinese market has been light as of late.
Take Home News: Producers should continue to monitor their cost structure and keep an eye on commodity prices. Many producers can likely book some bushels at a profit at these price levels given the recent rallies that we have had in the markets..
