Corn: December corn futures closed $0.08 lower for the week. This past week has been a bit tumultuous for the commodity markets. Earlier this week the USDA released the latest World Agricultural Supply and Demand Estimate (WASDE) report. This report indicated that corn production would be raised for the 2016 crop. The USDA projected that the U.S. corn crop would equal 15.23 billion bushels and a national yield of 175.3 bushels per acre. This along with the uncertainty revolving around the new President-Elect has weighed heavily on the markets. The good news is that the market should return to a trading pattern that is based upon economic fundamentals now that the elections have come and gone. Basis at the local level has increased by an average of $0.07 over the past few weeks.
Soybeans: January soybean futures closed $0.05 lower for the week. Now that November 15th is right around the corner, most elevator bids have shifted over to the January contract. In this week’s WASDE report, the USDA’s forecast was bearish for the soybean market. The USDA raised the national yield estimate by 1 bushel per acre to 52.5 bushels per acres. At this yield, the projected size of the 2016 crop is 4.36 billion bushels. This is up from the October estimate.
Another bearish factor for the soybean market is the recent decline in the value of the Brazilian real. The decline in Brazil’s currency will make their soybeans more competitive with U.S. soybeans. Over the coming weeks, we could lose part of the Chinese export market to Brazil. Basis at the local level has decreased by an average of $0.06 over the past few weeks.
Wheat: There is no major update for the wheat complex this week. The same old story continues to hold true. The world is full of wheat and prices are limited on their upside potential. Basis at the local level has increased by $0.02 over the past few weeks.
Cotton: December cotton futures closed today at 68.44. The USDA raised the projected average farm price for cotton from $0.59-$0.69 to $0.63-$0.71. Cotton equities, or loan options, for Tennessee producers continue to be approximately $0.11.
Take Home Message: Producers with corn in the bin are beginning to see some positive gains in basis at the local level. We should expect to see that as we come off of harvest lows. The soybean market will be dependent upon demand from the export market. For producers with soybeans still in the field or in the bin, I would suggest you keep an eye on news related to the strength of the U.S. dollar to determine the price direction of soybeans. The latest WASDE report was not friendly for corn or soybean futures; however, the forecast for cotton prices does look favorable.
West Tennessee Grain Elevator Bids: grain-newsletter-11-11-2016
