Corn: Last week, March corn futures closed $0.03 cents higher while September corn futures closed $0.03 higher as well. The spike higher in soybean prices is continuing to pull the other grains along with it. However, in part, the latest USDA’s World Agricultural Supply and Demand Estimate (WASDE) indicated that corn exports will continue to improve, which will cause a reduction in ending stocks. Exports were raised by 125 million bushels in February’s report due to the United States’ competitive price when compared to other nations such as Argentina and Ukraine. The USDA also lowered their projection for the size of the global coarse grain, which includes corn, by 2.3 million tons due to reductions in the corn crops of Argentina and Ukraine. September corn futures reached their highest point since August 2017 this past week. Locally, new crop corn basis averaged -$0.13 as of market close.
Soybeans: Last week, March soybean futures closed $0.26 cents higher while November soybean futures closed $0.18 higher. The increase in prices can be attributed to continuing perception that the South American soybean crop has been damaged due to dry growing conditions. The Buenos Aires Grains Exchange has reported that 56% of the Argentina soybean crop is in poor to very poor condition while 58% of the corn crop is in the same shape. The latest USDA outlook for soybeans contained an increase in ending stocks due to reduced exports. However, global oilseed production, which includes soybeans, is down due to a reduction in soybean production. November soybean futures have reached levels that we have not seen since December 2017. Locally, new crop soybean basis averaged -$0.17.
Wheat: July wheat futures increased by $0.10 last week. Wheat prices continued to climb due to fears of dry weather in key wheat growing states. Also, wheat exports beat trade expectations. However, the outlook from the USDA for the wheat market was not as hopeful. The latest WASDE report indicated that ending stocks for wheat would be 20 million bushel higher due to lower exports. Global 2017/2018 wheat ending stocks were increased as well due to higher production forecasts for Argentina and Ukraine. Locally, new crop wheat basis averaged -$0.04, with some river facilities paying near $5.00 per bushel.
Cotton: December cotton futures closed at 75.54. Cotton futures are still trading at levels well above the 3 year average. New crop cotton equities are approximately $0.175. Cotton gained some attention this past week with the announcement of the 2018 Seed Cotton Program. This program will allow for cotton to be enrolled into the ARC or PLC programs. If you would like more information on this, be sure to visit the National Cotton Council’s website: www.cotton.org.
Take Home Message: The recent uptick in commodity prices may present a selling opportunity for farmers, particularly on soybeans. The opportunity for near $5.00 wheat is worth taking note of as well. As always, producers should analyze their cost of production to be able to make profitable selling decisions. If you need assistance with this, you can contact me directly at danhmorr@utk.edu.
West Tennessee Grain Bids 2-19-2018
