USDA Released FSA Crop Acreage Data And Crop Production And WASDE Reports

DR. AARON SMITH

KNOXVILLE, TENNESSEE

On Friday, August 11, the USDA released FSA Crop Acreage Data and Crop Production and WASDE reports. Overall, the reports were neutral to bearish for corn, soybean, and wheat prices and bullish for cotton prices. 

FSA Crop Acreage Data are producer self-reported cropland on each FSA farm. Data are reported in the following categories: planted; prevented planted; and failed. The initial 2023 data release (data will be revised each month until January) indicated total prevented planted acres of 3.56 million (1,421,488 for corn, 464,901 for upland cotton, 458,915 for soybeans, 640,761 for wheat, and all other crops 574,177 acres). USDA NASS uses the FSA planted acreage data to complement their survey-based data when developing acreage estimates. FSA planted crop data for corn, upland cotton, soybeans, and wheat are 93.0 million, 9.9 million, 82.6 million, and 53.2 million acres planted. 

The NASS Crop Production report estimated national average corn, upland cotton, soybean, and wheat yields at 175.1 bu/acre, 773 lbs/acre, 50.9 bu/acre, and 48.1 bu/acre. Corn, upland cotton, soybean, and wheat harvested acres were projected at 86.322 million, 8.512 million, 82.696 million, and 37.872 million. The overall result of the yield and acreage changes were corn production estimated up 10%, cotton down 3%, soybeans down 2%, and winter wheat up 2% compared to last year. 

The current estimated corn yield and harvested acreage indicate production over 15 billion bushels and ending stocks over 2.2 billion bushels. If realized both estimates would be supportive of lower prices. Cotton was perhaps the biggest surprise in the Crop Production report. Substantially lower yields and reduced harvested acreage resulted in estimated carryover into next the next marketing of 3.1 million bales, down 700,000 bales compared to last month. The only major update for soybeans, com- pared to last month, was a 1.1 bu/acre decrease in yield. 

In Tennessee projected yields for corn, cotton, soybeans, and wheat were 172 bu/acre, 1,023 lb/acre, 49 bu/acre, and 75 bu/ acre. Projected corn, cotton, soybean, and wheat production in Tennessee for 2023 is 162.5 million bushels - up 57% compared to last year, 650,000 bales – down 9% compared to last year, 76.93 million bushels - down 1% compared to last year, and 29.25 million bushels - up 20% compared to last year. Due to the dramatic increase in corn production a weaker corn basis in Tennessee is likely this fall and winter.
Analysis of the August WASDE report can be found at: 

https://arec.tennessee.edu/extension/tennessee-market-highlights/ monthly-crop-comments/ 

Corn

Ethanol production for the week ending August 4 was 1.023 million barrels per day, down 44,000 barrels from the previous week. Ethanol stocks were 22.88 million barrels, up 0.02 million compared to last week. Corn net sales reported by exporters for July 28-August 3 were net sales of 5.9 million bushels for the 2022/23 marketing year and 29.9 million bushels for the 2023/24 marketing year. Exports for the same period were down 24% compared to last week at 18.8 million bushels. Corn export sales and commitments were 96% of the USDA estimated total annual exports for the 2022/23 marketing year (September 1 to August 31) compared to the previous 5-year average of 103%. Across Tennessee, average corn basis (cash price-nearby futures price) weakened or remained unchanged at West, Northwest, North-Central, West-Central, and Mississippi River elevators and barge points. Overall, basis for the week ranged from 55 under to 75 over, with an average of 22 under the September futures at elevators and barge points at the end of the week. 

The Crop Progress report estimated corn condition at 57% good-to-excellent and 14% poor-to-very poor; corn silking at 93% compared to 84% last week, 89% last year, and a 5-year average of 91%; corn dough at 47% compared to 29% last week, 42% last year, and a 5-year average of 46%; and corn dented at 8% compared to 6% last year and a 5-year average of 8%. In Tennessee, corn condition was 70% good-to-excellent and 8% poor-to-very poor; corn silking was 97% compared to 95% last week, 97% last year, and a 5-year average of 97%; corn dough at 81% compared to 72% last week, 76% last year, and a 5-year average of 77%; and corn dented at 37% compared to 10% last week, 29% last year, and a 5-year average of 25%. New crop cash prices ranged from $4.39 to $4.82 at elevators and barge points. September 2023 corn futures closed at $4.74, down 10 cents since last Friday. For the week, September 2023 corn futures traded between $4.70 and $4.94. Sep/Dec and Sep/Mar future spreads were 13 and 27 cents. December 2023 corn futures closed at $4.87, down 10 cents since last Friday. Downside price protection could be obtained by purchasing a $4.90 December 2023 Put Option costing 25 cents establishing a $4.65 futures floor. March 2024 corn futures closed at $5.01, down 9 cents since last Friday. 

Soybeans

Across Tennessee average soybean basis weakened or remained unchanged at West, Northwest, and West-Central elevators and barge points and strengthened at North-Central and Mississippi River elevators and barge points. Basis ranged from 60 under to 34 over, with an average basis at the end of the week of 33 over the September futures contract. Soybean net weekly sales reported by exporters were 14.9 million bushels for the 2022/23 marketing year and 40.3 million bushels for the 2023/24 marketing year. Exports for the same period were up 11% compared to last week at 14.0 million bushels. Soybean export sales and commitments were 99% of the USDA estimated total annual exports for the 2022/23 marketing year (September 1 to August 31), compared to the previous 5-year average of 104%. September 2023 soybean futures closed at $13.37, down 50 cents since last Friday. For the week, September 2023 soybean futures traded between $13.25 and $13.80. Sep/Nov and Sep/Jan future spreads were -30 and -20 cents. September soybean-to-corn price ratio was 2.82 at the end of the week. 

The Crop Progress report estimated soybean condition at 54% good-to-excellent and 14% poor-to-very poor; soybeans blooming at 90% compared to 83% last week, 88% last year, and a 5-year average of 87%; and soybeans setting pods at 66% com- pared to 50% last week, 59% last year, and a 5-year average of 63%. In Tennessee, the Crop Progress report estimated soybean condition at 74% good-to-excellent and 6% poor-to-very poor; soybeans blooming at 86%, compared to 76% last week, 85% last year, and a 5-year average of 83%; and soybeans setting pods at 63% compared to 55% last week, 57% last year, and a 5- year average of 59%. November 2023 soybean futures closed at $13.07, down 26 cents since last Friday. New crop cash soy- bean prices at elevators and barge points ranged from $12.55 to $13.26. Downside price protection could be achieved by purchasing a $13.10 November 2023 Put Option which would cost 45 cents and set a $12.65 futures floor. Nov/Dec 2023 soybean- to-corn price ratio was 2.68 at the end of the week. January 2024 soybean futures closed at $13.17, down 25 cents since last Friday. 

Cotton

North Delta upland cotton spot price quotes for August 10 were 84.29 cents/lb (41-4-34) and 86.54 cents/lb (31-3-35). Adjusted world price (AWP) was up 0.06 cents at 70.25 cents. Cotton net weekly sales reported by exporters were 277,700 bales for the 2023/24 marketing year and 3,000 bales for the 2024/25 marketing year. Exports for the same period were up 67% compared to last week at 324,800 bales. A total of 2,152,500 bales in sales were carried over from the 2023/2024 marketing year, which ended July 31. Accumulated exports for the 2022/23 marketing year were 11,777,500 bales, down 11 percent from the prior years’ total of 13,179,100 bales. Upland cotton export sales were 41% of the USDA estimated total annual exports for the 2023/24 marketing year (August 1 to July 31), compared to the previous 5-year average of 51%. 

The Crop Progress report estimated cotton condition at 41% good-to-excellent and 34% poor-to-very poor; cotton squaring at 92% compared to 86% last week, 94% last year, and a 5-year average of 93%; cotton setting bolls at 63% compared to 47% last week, 67% last year, and a 5-year average of 63%; and cotton bolls opening at 8% compare to 9% last year and a 5-year average of 9%. In Tennessee, the Crop Progress report estimated cotton condition at 77% good-to-excellent and 11% poor-to-very poor; cotton squaring at 94% compared to 93% last week, 98% last year, and a 5-year average of 96%; cotton setting bolls at 73% compared to 64% last week, 80% last year, and a 5-year average of 74%; and cotton bolls opening at 3% compared to 1% last week, 1% last year, and a 5-year average of 1%. December 2023 cotton futures closed at 87.89 cents, up 3.6 cents since last Friday. For the week, December 2023 cotton futures traded between 84.27 and 88.83 cents. Downside price protection could be obtained by purchasing an 88 cent December 2023 Put Option costing 6.53 cents establishing an 81.47 cent futures floor. March 2024 cotton futures closed at 87.67 cents, up 3.27 cents since last Friday. May 2023 cotton futures closed at 87.54 cents, up 3.04 cents since last Friday. Dec/Mar and Dec/May cotton futures spreads were 0.22 cents and 0.35 cents. 

Wheat 

Wheat net weekly sales reported by exporters were net sales of 20.9 million bushels for the 2023/24 marketing year and net sales cancellations of 0.2 million bushels for the 2024/25 marketing year. Exports for the same period were down 31% compared to last week at 12.9 million bushels. Wheat export sales were 33% of the USDA estimated total annual exports for the 2023/24 marketing year (June 1 to May 31), compared to the previous 5-year average of 41%. Wheat cash prices at elevators and barge points ranged from $5.60 to $5.93. 

The Crop Progress report estimated winter wheat harvested at 87% compared to 80% last week, 85% last year, and a 5-year average of 88%; spring wheat condition at 41% good-to-excellent and 20% poor-to-very poor; and spring wheat harvested at 11% compared to 2% last week, 8% last year, and a 5-year average of 14%. September 2023 wheat futures closed at $6.26, down 7 cents since last Friday. September 2023 wheat futures traded between $6.24 and $6.63 this week. September wheat- to-corn price ratio was 1.32. Sep/Dec and Sep/Jul future spreads were 27 and 77 cents. December 2023 wheat futures closed at $6.53, down 7 cents since last Friday. July 2024 wheat futures closed at $7.03, down 3 cents since last Friday. Downside price protection could be obtained by purchasing a $7.10 July 2024 Put Option costing 77 cents establishing a $6.33 futures floor. New crop wheat cash prices at elevators and barge points ranged from $6.39 to $6.94.  ∆

DR. AARON SMITH: University of Tennessee