Corn Wheat Were Up; Soybeans Mixed; And Cotton Was Down For The Week

DR. AARON SMITH

KNOXVILLE, TENNESSEE

At this time of year, it may be beneficial to evaluate how your growing season marketing strategy performed. The 2023 harvest contracts for corn, soybean, and cotton have come off the trading board, or will complete trading in the next two weeks. To compare your growing season pricing activity relative to the market, you can examine the futures prices you secured to the range and average daily futures market price closes for the harvest contract. 

For example, from January 1 to December 1, the December 2023 corn futures contract had daily closings between $4.50 and $6.29 with an average of $5.28. The 90th percentile for the December 2023 corn futures contract daily closing prices was $5.93. So, if you priced corn above $5.93 on the futures market, you were in the top 10% of daily closing prices for the calendar year. Likewise, if you priced futures below $4.76 you were in the bottom 10% of the daily closing futures prices for the calendar year. 

For soybeans, from January 1 to November 15, the 2023 November soybean contract had daily closes between $11.47 and $14.25 with an average daily close of $13.18. The top 10% of daily closing prices were $13.87 and greater, and the bottom 10% were $12.39 and below. 

For cotton, from January 1 to December 1, the 2023 December contract traded between 74.9 and 90 cents with an average of 82.9 cents. The top 10% of daily closing prices were 86.96 cents and above and the bottom 10% were 79.03 cents and below. The above comparison is for the harvest futures contract only and does not factor in basis. Conducting a simple analysis on an annual basis can provide information on how your marketing strategy compares to market prices and identify potential improvements that can improve your marketing strategy in the future. 

Corn

Ethanol production for the week ending November 24 was 1.011 million barrels per day, down 12,000 from the previous week. Ethanol stocks were 21.379 million barrels, down 273,000 barrels compared to last week. Corn net sales reported by exporters for November 17-23 were net sales of 75.9 million bushels for the 2023/24 marketing year – a marketing year high. Exports for the same period were down 20% compared to last week at 19.7 million bushels. Corn export sales and commitments were 46% of the USDA estimated total annual exports for the 2023/24 marketing year (September 1 to August 31) compared to the previous 5-year average of 51%. Across Tennessee, average corn basis (cash price-nearby futures price) strengthened or remained unchanged at West, Northwest, North-Central, West-Central, and Mississippi River elevators and barge points. Overall, basis for the week ranged from 50 under to 3 over, with an average of 13 under the December futures at elevators and barge points. 

The Crop Progress report estimated corn harvested at 96% compared to 93% last week, 99% last year, and a 5-year average of 95%. In Tennessee, corn harvested was estimated at 99% compared to 98% last week, 100% last year, and a 5-year average of 100%. Cash prices ranged from $4.05 to $4.75 at elevators and barge points. December 2023 corn futures closed at $4.64, up 1 cent since last Friday. For the week, December 2023 corn futures traded between $4.47 and $4.69. Dec/Mar and Dec/May future spreads were 20 and 32 cents. March 2024 corn futures closed at $4.84, up 2 cents since last Friday. May 2024 corn futures closed at $4.96, up 2 cents since last Friday. Downside price protection could be obtained by purchasing a $5.20 December 2024 Put Option costing 45 cents establishing a $4.75 futures floor. 

Soybeans

Across Tennessee average soybean basis weakened or remained unchanged at Mississippi River elevators and barge points and strengthened at Northwest, West, North-Central, and West-Central and elevators and barge points. Basis ranged from 53 under to 10 under the January futures contract, with an average basis at the end of the week of 24 under. Soybean net weekly sales reported by exporters were net sales of 69.6 million bushels for the 2023/24 marketing year. Exports for the same period were down 13% compared to last week at 53.2 million bushels. Soybean export sales and commitments were 65% of the USDA estimated total annual exports for the 2023/24 marketing year (September 1 to August 31), compared to the previous 5-year aver- age of 67%. 

In Tennessee, the Crop Progress report estimated soybeans harvested at 97% compared to 93% last week, 96 last year, and a 5- year average of 91%. January 2024 soybean futures closed at $13.25, down 5 cents since last Friday. For the week, January 2024 soybean futures traded between $13.23 and $13.52. Cash soybean prices at elevators and barge points ranged from $12.99 to $13.47. March 2024 soybean-to-corn price ratio was 2.78 at the end of the week. Jan/Mar and Jan/Nov future spreads were 20 and -43 cents. March 2024 soybean futures closed at $13.45, down 3 cents since last Friday. November 2024 soybean futures closed at $12.82, up 2 cents since last Friday. Downside price protection could be achieved by purchasing a $13.00 November 2024 Put Option which would cost 89 cents and set a $12.11 futures floor. Nov/Dec soybean-to-corn price ratio was 2.50 at the end of the week. 

Cotton

North Delta upland cotton spot price quotes for November 30 were 77.06 cents/lb (41-4-34) and 79.06 cents/lb (31-3-35). Adjusted world price (AWP) was down 1.05 cent at 64.18 cents. Cotton net weekly sales reported by exporters were 217,700 bales for the 2023/24 marketing year and 15,400 bales for the 2024/25 marketing year. Exports for the same period were up 14% compared to last week at 88,800 bales. Upland cotton export sales were 68% 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 71%. 

The Crop Progress report estimated cotton harvested at 83% compared to 77% last week, 83% last year, and a 5-year average of 79%. In Tennessee, the Crop Progress report estimated cotton harvested at 96% compared to 95% last week, 94% last year, and a 5-year average of 92%. December 2023 cotton futures closed at 78.42 cents, down 1.97 cents since last Friday. For the week, December 2023 cotton futures traded between 76.0 and 80.42 cents. March 2024 cotton futures closed at 79.42 cents, down 1.57 cents since last Friday. May 2024 cotton futures closed at 80.12 cents, down 1.57 cents since last Friday. Dec/Mar and Dec/May cotton futures spreads were 1 cent and 1.7 cents. Downside price protection could be obtained by purchasing a 78 cent December 2024 Put Option costing 5.55 cents establishing a 72.45 cent futures floor. 

Wheat

Wheat net weekly sales reported by exporters were net sales of 22.9 million bushels for the 2023/24 marketing year and 0.4 million bushels for the 2024/25 marketing year. Exports for the same period were up 14% compared to last week at 12.5 million bushels. Wheat export sales were 67% 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 70%. Wheat cash prices at elevators and barge points ranged from $4.69 to $5.63. December 2023 wheat futures closed at $5.77, up 29 cents since last Friday. December 2023 wheat futures traded between $5.56 and $6.10 this week. December wheat-to-corn price ratio was 1.24. Dec/Mar and Dec/Jul future spreads were 25 and 51 cents. March 2024 wheat futures closed at $6.02, up 25 cents since last Friday. 

The Crop Progress report estimated winter wheat condition at 50% good-to-excellent and 15% poor-to-very poor; and winter wheat emerged at 91% compared to 87% last week, 90% last year, and a 5-year average of 89%. In Tennessee, winter wheat condition was estimated at 61% good-to-excellent and 10% poor-to-very poor; winter wheat planted at 94% compared to 88% last week and 96% last year; and winter wheat emerged at 80% compared to 65% last week and 84% last year. July 2024 wheat futures closed at $6.28, up 24 cents since last Friday. Downside price protection could be obtained by purchasing a $6.30 July 2024 Put Option costing 49 cents establishing a $5.81 futures floor. New crop wheat cash prices at elevators and barge points ranged from $5.59 to $6.01.  ∆

DR. AARON SMITH: University of Tennessee