Release No. 0122.18

Contact: Wayne Maloney
202-720-6107
Wayne.maloney@wdc.usda.gov

WASHINGTON, July 30, 2018 — The U.S. Department of Agriculture (USDA) today  announced that seed cotton producers, who want to participate in the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs for the 2018 crop year, may now submit applications. The signup period begins today and ends on Dec. 7, 2018.

In accordance with changes to ARC and PLC made by the Bipartisan Budget Act of 2018, farm owners with generic base acres and recent planting history of covered commodities have a one-time opportunity to allocate all of the generic base acres on their farm.

“ARC and PLC are a vital part of the safety net that ensures American agriculture remains competitive and producers are able to manage risk,” said USDA Farm Service Agency Administrator Richard Fordyce. “USDA encourages any cotton producer to look into these important safety net programs,”

Farms with generic base acres that were planted or approved as a prevented planted commodity during the 2009 through 2016 crop years, are eligible to allocate generic base acres. This includes upland cotton. Continue reading at Seed Cotton Program.

HAY CUTTING IN FULL SWING

Spotty showers did little to slow field work last week. Row crop farmers were busy spraying for pests, while forage producers worked on their second cutting of hay. Pasture condition declined slightly as pastures in drier areas began to show signs of stress due to lack of moisture. There were 6.3 days suitable for field work. Topsoil moisture rated 8 percent very short, 33 percent short, 53 percent adequate, and 6 percent surplus. Subsoil moisture rated 6 percent very short, 28 percent short, 65 percent adequate, and 1 percent surplus. Hay Supplies rated 1 percent very short, 19 percent short, 70 percent adequate, and 10 percent surplus. Continue reading at TN_07_30_18. The U.S. Crop Progress report can be read at CropProg-07-30-2018.

Corn, cotton, soybeans, and wheat were up for the week.

This week commodities strengthened on easing of trade tensions with the
E.U. and supportive weather forecasts. Trade will remain at the forefront of
agricultural markets as the U.S. Administration is currently negotiating new
deals with China, E.U., Canada, and Mexico.

To assist farmers with declines in commodity prices, as a result of retaliatory tariffs, the USDA announced $12 billion in support. Details remain vague, however the USDA will use the Commodity Credit Corporation, Farm Service Agency, Agricultural Marketing Service, and Foreign Agricultural Service to enact and administer three general programs: 1) Market Facilitation Program through Farm Service Agency – payments to agricultural producers; 2) Food Purchase and Distribution Program through the Agricultural Marketing Service – purchase of surplus supplies and distribution of the supplies to nutrition programs and charities; and 3) Trade Promotion Program administered by the Foreign Agriculture Service – market expansion (through trade promotion). Continue reading at Tennessee Market Highlights.

STATES CROPS IN MOSTLY GOOD CONDITION

The State’s crops are in mostly good condition though rains have been spotty even within counties, causing top and sub-soil moistures to start decreasing. The tremendous amount of rain earlier in the season has helped with current soil moisture levels. Some tobacco is starting to be cut and pastures are in mostly good condition. There were 5.4 days suitable for field work. Topsoil was 5 percent very short, 21 percent short, and 69 percent adequate, and 5 percent surplus. Subsoil moisture was 5 percent very short, 20 percent short, 73 percent adequate, and 2 percent surplus. Continue reading at TN_07_23_18. The U.S. Crop Progress report can be read at CropProg-07-23-2018.

Corn, soybeans, and wheat were up; cotton was down for the week.

Has a bottom been established in soybean and corn markets? The current low in the  December corn contract is $3.50 ¼ established on July 12. The current low in the  November soybean contract is $8.26 ¼ established on July 16. For corn, the supply and demand fundamentals paint a much more bullish picture than soybeans. For example, global corn stocks are projected down over 1.5 billion bushels year-over-year, while global soybean stocks are projected up 82 million bushels. Global demand for both commodities remains strong, however trade disputes continue to weigh heavily on agricultural commodities. Approximately 47% of US soybean production and 15% of corn production are exported annually, as such disruptions to global trade adversely affects soybean prices more than corn prices. At this point in time, a swift resolution to the trade war with China appears unlikely. Whether a bottom has been established in corn and soybeans will depend on further escalation of the trade war and how weather progresses between now and harvest. Currently, a stronger argument can be made for a bottom in the corn market than the soybean market. Continue reading at Tennessee Market Highlights.

SOME CROPS STARTING TO SHOW STRESS; HAY HARVESTED

Even though there were some scattered thundershowers across the State, mostly hot, dry weather across most of the State last week caused some crops to start showing signs of stress. Some showers are needed to help replenish soil moisture. The drier weather did, however, allow for active hay harvest. There were 5.6 days suitable for field work. Topsoil was 2 percent very short, 12 percent short, and 77 percent adequate, and 9 percent surplus. Subsoil moisture was 2 percent very short, 13 percent short, 79 percent adequate, and 6 percent surplus. Continue reading at TN_07_16_18. The U.S. Crop Progress report can be read at CropProg-07-16-2018.

Corn, soybeans, and wheat were down; cotton was up for the week. Another substantial drop in corn, soybean, and wheat futures prices this week as a result of positive weather forecasts and an intensifying tit-for-tat trade war with China. Cash soybean offerings in west Tennessee have dipped below $8. Prices are currently searching for a bottom as we are treading in untested waters from a technical standpoint.

In price risk management you often have to take the good with the bad when it comes to price fluctuations. To highlight this phenomenon one only has to look to the soybean and cotton futures markets from March 2018 to today. On March 1, November 2018 soybean futures closed at $10.38. This Friday (July 13) the November soybean contract closed at $8.34, a decrease of $2.04 (20% decrease). Conversely, on March 1, December 2018 cotton futures closed at 77.18 cents. This Friday (July 13) the December contract  closed at 87.84 cents, an increase of 10.66 cents (14% increase). Continue reading at Tennessee Market Highlights.