|
Tenn. Harvest In Full Swing And Yields Reported Across The State Are Very Strong
DR. AARON SMITH
KNOXVILLE, TENN.
December corn traded in a tight range ($3.65 to $3.75) this week after last week’s contract low of $3.52 ¼. Markets will continue to wait for additional information regarding yield and harvest weather. While forecasts are currently not indicating an early freeze, the situation will be monitored closely with crops in Northern States 1-3 weeks behind typical maturity. An early frost has the potential to dramatically reduce yields. In Tennessee, harvest is now in full swing and yields being reported across Tennessee are very strong. A new state record average yield is very likely – the current USDA yield projection is 175 bu/acre, the previous high of 171bu/acre occurred in 2017.
Soybeans were hit on Friday closing down 10 ¼ cents for the day. Chinese delegates cancelled a trip to Montana to visit farmers which caused decreases in indices and commodities as speculation of a setback in trade negotiations was rumored. While the US soybean crop will be much smaller this year (estimated at 3.633 billion bushels, compared to 4.544 last year), there remains a substantial amount of demand uncertainty given strong competition for exports from South America, the trade disruption with China, and the spread of African swine fever. Futures prices are likely to continue trading between $8.50 and $9.00.
December cotton fell back to 60 cents after last week’s rally above 63 cents. Holding the 60 cent price level is important or a retest of the contract low of 56.59 cents could materialize. Export sales and weather will guide price action as cotton harvest intensifies.
Corn
Ethanol production for the week ending September 13 was 1.003 million barrels per day, down 20,000 from the previous week. Ethanol stocks were 23.238 million barrels, up 0.739 million barrels compare to last week. Corn net sales reported by exporters for September 6-12 were up from last week with net sales of 57.7 million bushels for the 2019/20 marketing year and 2.6 million bushels for the 2020/21 marketing year. Exports for the same time period were down 34 percent from last week at 18.0 million bushels. Corn export sales and commitments were 17 percent of the USDA estimated total annual exports for the 2019/20 marketing year (September 1 to August 31) compared to the previous 5-year average of 27 percent. Nationally, the Crop Progress report estimated corn condition at 55 percent good-to-excellent and 14 percent poor-to-very poor; corn dough at 93 percent compared to 89 percent last week, 99 percent last year, and a 5-year average 98 percent; corn dented at 68 percent compared to 55 percent last week, 92 percent last year, and a 5-year average of 87 percent; corn mature at 18 percent compared to 11 percent last week, 51 percent last year, and a 5-year average of 39 percent; and corn harvested at 4 percent compared to 8 percent last year and a 5-year average of 7 percent. In Tennessee, the Crop Progress report estimated corn condition at 83 percent good-to-excellent and 3 percent poor-to-very poor; corn dented at 97 percent compared to 94 percent last week, 99 percent last year, and a 5-year average of 97 percent; corn mature at 84 percent compared to 63 percent last week, 82 percent last year, and a 5-year average of 81 percent; and corn harvested at 38 percent compared to 16 percent last week, 38 percent last year, and a 5-year average of 35 percent. Across Tennessee, average corn basis (cash price-nearby futures price) strengthened or remained unchanged at Memphis, Northwest Barge Points, and Upper-middle Tennessee and weakened at Northwest Tennessee. Overall, basis for the week ranged from 38 under to 12 under with an average of 23 under the December futures at elevators and barge points. December 2019 corn futures closed at $3.70, up 2 cents since last Friday. Downside price protection could be obtained by purchasing a $3.75 December 2019 Put Option costing 12 cents establishing a $3.63 futures floor. For the week, December 2019 corn futures traded between $3.65 and $3.74.
Dec/Mar and Dec/Dec future spreads were 11 and 32 cents. March 2020 corn futures closed at $3.81, unchanged since last Friday. In Tennessee, new crop corn cash contracts averaged $3.86 with a range of $3.79 to $3.91. December 2020 corn futures closed at $4.02, down 4 cents since last Friday.
Soybeans
Net sales reported by exporters were up compared to last week with net sales of 63.5 million bushels for the 2019/20 marketing year. Exports for the same period were down 34 percent compared to last week at 25.8 million bushels. Soybean export sales and commitments were 23 percent of the USDA estimated total annual exports for the 2019/20 marketing year (September 1 to August 31), compared to the previous 5-year average of 40 percent. Nationally, the Crop Progress report estimated soybean condition at 54 percent good-to-excellent and 14 percent poor-to-very poor; soybeans setting pods at 95 percent compared to 92 percent last week, 100 percent last year, and a 5-year average of 100 percent; and soybeans dropping leaves at 15 percent compared to 50 percent last year and a 5-year average of 38 percent. In Tennessee, the Crop Progress report estimated soybean condition at 62 percent good-to-excellent and 8 percent poor-to-very poor; soybeans setting pods at 98 percent compared to 68 percent last week, 100 percent last year, and a 5-year average of 98 percent; soybeans dropping leaves at 39 percent compared to 27 percent last week, 38 percent last year, and a 5-year average of 37 percent; and soybeans harvested at 9 percent compared to 2 percent last week, 7 percent last year, and a 5-year average of 3 percent. Average soybean basis strengthened at Memphis, Northwest Barge Points, Northwest, and Upper-middle Tennessee. Basis ranged from 79 under to 32 under the November futures contract at elevators and barge points. Average basis at the end of the week was 50 under the November futures contract. In Tennessee, October/November 2019 soybean cash contracts average $8.59 with a range of $8.49 to $8.73. November 2019 soybean futures closed at $8.82, down 16 cents since last Friday. Downside price protection could be achieved by purchasing an $8.90 November 2019 Put Option which would cost 19 cents and set an $8.71 futures floor. For the week, November 2019 soybean futures traded between $8.80 and $9.04. November/December soybean-to-corn price ratio was 2.38 at the end of the week.
Nov/Jan and Nov/Nov future spreads were 14 and 58 cents. Nov/Dec 2020 soybean-to-corn price ratio was 2.34 at the end of the week. January 2020 soybean futures closed at $8.96, down 16 cents since last Friday. November 2020 soybean futures closed at $9.40, down 13 cents since last Friday.
Cotton
Net sales reported by exporters were up compared to last week with net sales of 85,000 bales for the 2019/20 marketing year and 19,300 bales for the 2020/21 marketing year. Exports for the same time period were unchanged compared to last week at 166,600 bales. Upland cotton export sales were 55 percent of the USDA estimated total annual exports for the 2019/20 marketing year (August 1 to July 31), compared to the previous 5-year average of 47 percent. Nationally, the Crop Progress report estimated cotton condition at 41 percent good-to-excellent and 17 percent poor-to-very poor; cotton bolls opening at 54 percent compared to 43 percent last week, 48 percent last year, and a 5-year average of 47 percent; and cotton harvested at 9 percent compared to 7 percent last week, 13 percent last year, and a 5-year average of 8 percent. In Tennessee, the Crop Progress report estimated cotton condition at 59 percent good-to-excellent and 12 percent poor-to-very poor; and cotton bolls opening at 47 percent compared to 27 percent last week, 78 percent last year, and a 5-year average of 56 percent. Delta upland cotton spot price quotes for September 19 were 60.33 cents/lb (41-4-34) and 62.58 cents/lb (31-3-35). Adjusted World Price (AWP) increased 2.34 cents to 54.62 cents. December 2019 cotton futures closed at 60.52, down 1.76 cents since last Friday. For the week, December 2019 cotton futures traded between 60.2 and 62.78 cents. Downside price protection could be obtained by purchasing a 61 cent December 2019 Put Option costing 2.43 cents establishing a 58.57 cent futures floor.
Dec/Mar and Dec/Dec cotton futures spreads were 0.65 cents and 3 cents. March 2020 cotton futures closed at 61.17, down 1.61 cents since last Friday. December 2020 cotton futures closed at 63.52, down 1.54 cents since last Friday.
Wheat
Nationally, the Crop Progress report estimated spring wheat harvested at 76 percent compared to 71 percent last week, 96 percent last year, and a 5-year average of 93 percent; and winter wheat planted at 8 percent compared to 12 percent last year and a 5-year average of 12 percent. In Tennessee, winter wheat planted was estimated at 1 percent compared to 3 percent last year. Wheat net sales reported by exporters were down compared to last week with net sales of 10.5 million bushels for the 2019/20 marketing year. Exports for the same time period were up 26 percent from last week at 18.7 million bushels. Wheat export sales were 46 percent of the USDA estimated total annual exports for the 2019/20 marketing year (June 1 to May 31), compared to the previous 5-year average of 52 percent. In Tennessee, September 2019 wheat cash contracts ranged from $4.76 to $5.15 for the week. December 2019 wheat futures closed at $4.84, up 1 cent since last Friday. December 2019 wheat futures traded between $4.80 and $4.92 this week. December wheat-to-corn price ratio was 1.31.
Dec/Mar and Dec/Jul future spreads were 7 and 15 cents. March 2020 wheat futures closed at $4.91, up 2 cents since last Friday. In Memphis, June/July 2020 cash contracts ranged from $4.98 to $5.04. July 2020 wheat futures closed at $4.99, up 2 cents since last Friday. Downside price protection could be obtained by purchasing a $5.00 July 2020 Put Option costing 31 cents establishing a $4.69 futures floor. ∆
DR. AARON SMITH: Assistant Professor, Crop Marketing Specialist, University of Tennessee
|
|