2021 National Cotton Yield Was Decreased To 871 lb/Acre
DR. AARON SMITH
KNOXVILLE, TENN.
This week the USDA released the WASDE and Crop Production reports. National average corn yield was increased 0.2 bu/acre to 176.5 bu/acre – the second highest yield ever, 0.1 bu/acre behind 2017. In Tennessee, corn yield was estimated at 170 bu/acre the same as last year and the 3rd largest yield on record, if realized. US corn production for 2021 is projected over 15 billion bushels. Exports are projected at 2.5 billion or 16.6 percent of total production. Corn prices fell after the report was released before regaining most of the losses by the end of the week. Overall, the report was bearish for corn prices.
The USDA WASDE provided more bearish news for soybeans. 2021/22 ending stocks were increased 135 million bushels, compared to last month, to 320 million bushels. Beginning stocks were increased 81 million bushels based on the Grain Stocks report. National average yield was increased 0.9 bu/acre resulting in a production increase of 74 million bushels to 4.448 billion bushels. After the report was released November soybean futures dropped 15 cents, closing the day down 30 cents.
2021 national cotton yield was decreased 24 lb/acre to 871 lb/acre. US ending stocks for the 2021/22 marketing year were estimated at 3.2 million bales, 500,000 lower than the previous month. Foreign stocks were increased 950,000 bales but are still 3.22 million bales lower than last year. December cotton futures pulled back from the contract high of 116.48, however are still well over a dollar.
For wheat the influence of the Northern Plains drought continued to lower production estimates. Harvested acres were decreased 900,000 and national average yield was decreased 0.2 bu/acre to 44.3 bu/acre. Canada’s production was decreased 73 million bushels to 772 million bushels.
Corn
Ethanol production for the week ending October 8 was 1.032 million barrels per day, up 54,000 from the previous week. Ethanol stocks were 19.847 million barrels, down 0.084 million compared to last week. Corn net sales reported by exporters for October 1-7, 2021, were down compared to last week with net sales of 40.9 million bushels for the 2021/22 marketing year and 0.1 million bushels for the 2022/23 marketing year. Exports for the same period were down 6 percent from last week at 36.1 million bushels. Corn export sales and commitments were 43 percent of the USDA estimated total exports for the 2021/22 marketing year (September 1 to August 31) compared to the previous 5- year average of 34 percent. Nationally, this week’s Crop Progress report estimated corn condition at 60 percent good-to-excellent and 15 percent poor-to-very poor; corn mature at 94 percent compared to 88 percent last week, 93 percent last year, and a 5-year average 86 percent; and corn harvested at 41 percent compared to 29 percent last week, 39 percent last year, and a 5-year average of 31 percent. In Tennessee, corn condition was estimated at 80 percent good-to- excellent and 3 percent poor-to-very poor; corn mature at 99 percent compared to 97 percent last week, 99 percent last year, and a 5-year average of 99 percent; and corn harvested at 67 percent compared to 57 percent last week, 74 percent last year, and a 5-year average of 86 percent. Across Tennessee, average corn basis (cash price-nearby futures price) weakened at Northwest and strengthened or remained unchanged at West, West-Central, North-Central, and Mississippi River elevators and barge points. Overall, basis for the week ranged from 2 under to 45 under, with an average of 22 under the December futures at elevators and barge points. December 2021 corn futures closed at $5.25, down 5 cents since last Friday. Downside price protection could be obtained by purchasing a $5.30 December 2021 Put Option costing 17 cents establishing a $5.13 futures floor. For the week, December 2021 corn futures traded between $5.06 and $5.34. In Tennessee, new crop cash corn prices at elevators and barge points ranged from $4.67 to $5.48.
Dec/Mar and Dec/May future spreads were 9 and 13 cents. March 2022 corn futures closed at $5.34, down 5 cents since last Friday. May 2022 corn futures closed at $5.38, down 6 cents since last Friday.
Soybeans
Net sales reported by exporters were up compared to last week with net sales of 42.2 million bushels for the 2021/22 marketing year. Exports for the same period were up 82 percent compared to last week at 63.0 million bushels. Soybean export sales and commitments were 46 percent of the USDA estimated total annual exports for the 2021/22 marketing year (September 1 to August 31), compared to the previous 5-year average of 51 percent. Nationally, this week’s Crop Progress report estimated soybean condition at 59 percent good-to-excellent and 14 percent poor-to-very poor; soybeans dropping leaves at 91 percent compared to 86 percent last week, 92 percent last year, and a 5-year average of 89 percent; and soybeans harvested 49 percent compared to 34 percent last week, 58 percent last year, and a 5-year average 40 percent. In Tennessee, soybean condition was estimated at 75 percent good-to-excellent and 5 percent poor-to-very poor; soybeans dropping leaves at 77 percent compared to 62 percent last week, 79 percent last year, and a 5-year average of 86 percent; and soybeans harvested at 22 percent compared to 15 percent last week, 30 percent last year, and a 5-year average of 38 percent. Across Tennessee, average soybean basis strengthened or remained unchanged at West, Northwest, West-Central, and Mississippi River; and weakened at North-Central elevators and barge points. Basis ranged from 3 under to 47 under, with an average basis at the end of the week of 18 under the November futures contract. November 2021 soybean futures closed at $12.17, down 26 cents since last Friday. For the week, November 2021 soybean futures traded between $11.84 and $12.51. Downside price protection could be achieved by purchasing a $12.20 November 2021 Put Option which would cost 11 cents and set a $12.09 futures floor. Nov/Dec 2021 soybean-to- corn price ratio was 2.32 at the end of the week. In Tennessee, new crop cash soybean prices at elevators and barge points ranged from $11.48 to $12.14.
Nov/Jan and Nov/Mar future spreads were 9 and 18 cents. January 2022 soybean futures closed at $12.26, down 28 cents since last Friday. March 2022 soybean futures closed at $12.35, down 28 cents since last Friday. March 2022 soybean-to-corn price ratio was 2.31 at the end of the week.
Cotton
Net sales reported by exporters were down compared to last week with net sales of 146,700 bales for the 2021/22 marketing year and 10,600 for the 2022/23 marketing year. Exports for the same period were down 24 percent compared to last week at 95,200 bales – a marketing year low. Upland cotton export sales were 52 percent of the USDA estimated total annual exports for the 2021/22 marketing year (August 1 to July 31), compared to the previous 5-year average of 56 percent. Delta upland cotton spot price quotes for October 14 were 105.85 cents/lb (41-4-34) and 108.1 cents/lb (31-3-35). Adjusted world price increased 1.07 cents to 92.88 cents.
Nationally, this week’s Crop Progress report estimated cotton condition at 64 percent good-to-excellent and 6 percent poor-to-very poor; cotton bolls opening at 78 percent compared to 70 percent last week, 89 percent last year, and a 5-year average of 82 percent; and cotton harvested at 20 percent compared to 13 percent last week, 25 percent last year, and a 5-year average of 26 percent. In Tennessee, cotton condition was estimated at 65 percent good-to-excellent and 15 percent poor-to-very poor; cotton bolls opening at 75 percent compared to 55 percent last week, 90 percent last year, and a 5-year average of 94 percent; and cotton harvested at 2 percent compared to 1 percent last week, 16 percent last year, and a 5-year average of 29 percent.
December 2021 cotton futures closed at 107.33 cents, down 3.27 cents since last Friday. Downside price protection could be obtained by purchasing a 108 cent December 2021 Put Option costing 5.03 cents establishing a 102.97 cent futures floor. For the week, December 2021 cotton futures traded between 103.5 and 112.89 cents. Dec/Mar and Dec/ May cotton futures spreads were -2.33 cents and -3.36 cents. March 2022 cotton futures closed at 105 cents, down 2.91 cents since last Friday. May 2022 cotton futures closed at 103.97 cents, down 2.8 cents since last Friday.
Wheat
Wheat net sales reported by exporters were up compared to last week with net sales of 20.9 million bushels for the 2021/22 marketing year. Exports for the same period were down 16 percent from last week at 16.9 million bushels. Wheat export sales were 51 percent of the USDA estimated total annual exports for the 2021/22 marketing year (June 1 to May 31), compared to the previous 5-year average of 57 percent. December 2021 wheat futures closed at $7.34, unchanged since last Friday. December 2021 wheat futures traded between $7.12 and $7.43 this week. December wheat-to-corn price ratio was 1.40. Dec/Mar and Dec/Jul future spreads were 12 and 4 cents. March 2022 wheat futures closed at $7.47, down 1 cent since last Friday. March wheat-to-corn futures price ratio was 1.40.
Nationally, the Crop Progress report estimated winter wheat planted at 60 percent compared to 47 percent last week, 66 percent last year, and a 5-year average of 60 percent; and winter wheat emerged at 31 percent compared to 19 percent last week, 39 percent last year, and a 5-year average of 35 percent. In Tennessee, winter wheat planted was estimated at 22 percent compared to 16 percent last week, 22 percent last year, and a 5-year average of 23 percent; and winter wheat emerged at 13 percent compared to 7 percent last week, 8 percent last year, and a 5-year average of 6 percent. New crop wheat cash prices at elevators and barge points ranged from $6.91 to $7.16. July 2022 wheat futures closed at $7.38, un-changed since last Friday. Downside price protection could be obtained by purchasing a $7.40 July 2022 Put Option costing 58 cents establishing a $6.82 futures floor. ∆
DR. AARON SMITH: Assistant Professor, Crop Marketing Specialist, University of Tennessee