Skip to Main Content

The University of Tennessee | Institute of Agriculture

Department of Agricultural and Resource Economics

Frequently Used Tools:




Weekly Crop Comments

By Dr. Aaron Smith

February 17, 2017


Listen to the comments or download the file.

click to subscribe to rss feed for Podcast Click to subscribe to podcast

Overview

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

Compared to last year at this time corn and soybean harvest futures are trading approximately $0.05/bu and $1.25/bu higher, respectively. This will have direct implications in planted acreage this spring. The difference in prices will also alter the revenue guarantee relationship, provided through crop insurance, which will be a key factor for many Midwest and Delta producers. 

Current projected crop insurance prices for corn, soybeans, and cotton are: $3.97/bu, $10.22/bu, and $0.74/lb. There are six trading days left in the projected price determination period (ending February 28).

National Cotton Council (NCC) producer survey indicates 297,000 acres of cotton to be planted in Tennessee up 16.6% from last year. National cotton acreage is projected up 9.4% to 11.017 million acres.

Harvest cotton futures took a step back this week. The December contract has yet to breach the 75 cent level. Pricing a quarter to a third of estimated 2017 production when December futures are above 72 cents remains a prudent risk management decision. 

July wheat futures have increased over 35 cents since the start of 2017. Harvested wheat futures are now trading close to last year – between $4.55-$4.80. An increase above $5.00 remains unlikely due to large global supplies and flat demand.


 

 

 

 

Corn

March 2017 corn futures closed at $3.68 down 6 cents since last Friday. For the week, March 2017 corn futures traded between $3.68 and $3.80. Across Tennessee, average basis (cash price-nearby futures price) strengthened or remained unchanged at Memphis, Northwest Barge Points, Northwest, Lower-middle, and Upper-middle Tennessee. Overall, basis for the week ranged from 6 under to 40 over the March futures contract with an average of 15 over at the end of the week. Corn net sales reported by exporters from February 3-9 were within expectations with net sales of 30.8 million bushels for the 2016/17 marketing year and 11.2 million bushels for the 2017/18 marketing year. Exports for the same time period were up from last week at 49.3 million bushels. Corn export sales and commitments were 74% of the USDA estimated total annual exports for the 2016/17 marketing year (September 1 to August 31) compared to a 5-year average of 70%. Ethanol production for the week ending February 10 was 1.040 million barrels per day down 15,000 from last week. Ethanol stocks were 22.500 million barrels, up 415,000 barrels. Mar/May and Mar/Dec future spreads were 7 and 26 cents, respectively. May 2017 corn futures closed at $3.75 down 7 cents since last Friday.

Historical September Corn Futures Prices

 

 


 


 



In Tennessee, September 2017 cash forward contracts averaged $3.86 with a range of $3.73 to $4.07. December 2017 corn futures closed at $3.94 down 5 cents since last Friday. Downside price protection could be obtained by purchasing a $4.00 December 2017 Put Option costing 35 cents establishing a $3.65 futures floor.


Nearby and Harvest Corn Futures Prices

 

 

 

 

 

 

 

 

Soybeans

March 2017 soybean futures closed at $10.32 down 27 cents since last Friday. For the week, March 2017 soybean futures traded between $10.31 and $10.62. Average soybean basis strengthened or remained unchanged at Memphis, Northwest Barge Points, Northwest, Upper-middle, and Lower-middle Tennessee. Basis ranged from 30 under to 13 over the March futures contract at elevators and barge points. Average basis at the end of the week was 5 under the March futures contract. Net sales reported by exporters were above expectations with net sales of 32.7 million bushels for the 2016/17 marketing year and 7.6 million bushels for the 2017/18 marketing year. Exports for the same period were down from last week at 41.8 million bushels. Soybean export sales and commitments were 93% of the USDA estimated total annual exports for the 2016/17 marketing year (September 1 to August 31), compared to a 5-year average of 88%. March soybean-to-corn futures price ratio was 2.80 at the end of the week. Mar/May and Mar/Nov future spreads were 11 cents and -14 cents, respectively. May 2017 soybean futures closed at $10.43 down 27 cents since last Friday.

Historical November Soybean Futures Prices

 

 

 

 

 





In Tennessee, October / November 2017 soybean cash contracts average $10.20 with a range of $9.84 to $10.45.  November/December 2017 soybean-to-corn price ratio was 2.58 at the end of the week. November 2017 soybean futures closed at $10.18 down 12 since last Friday. Downside price protection could be achieved by purchasing a $10.20 November 2017 Put Option which would cost 77 cents and set a $9.43 futures floor.

Nearby and Harvest Soybean Futures Prices

 

 

 

 

 

 



Cotton

March 2017 cotton futures closed at 73.48 down 2.34 cents since last Friday. For the week, March 2017 cotton futures traded between 73.02 and 76.95 cents. Delta upland cotton spot price quotes for February 16 were 74.27 cents/lb (41-4-34) and 75.52 cents/lb (31-3-35). Adjusted world price (AWP) increased 0.74 cents to 67.19 cents per pound. Net sales reported by exporters were up from last week with net sales of 222,200 bales for the 2016/17 marketing year and 121,300 bales for the 2017/18 marketing year. Exports for the same period were down from last week at 344,900 bales. Upland cotton export sales were 87% of the USDA estimated total annual exports for the 2016/17 marketing year (August 1 to July 31), compared to a 5-year average of 86%. May 2017 cotton futures closed at 75.52 down 1.57 cents since last Friday. Mar/May and Mar/Dec cotton futures spreads were 2.04 cents and 0.28 cents, respectively.

Historical December Cotton Futures Prices

 

 

 


 

 


December 2017 cotton futures closed at 73.76 down 0.34 cents since last Friday. Downside price protection could be obtained by purchasing a 74 cent December 2017 Put Option costing 4.66 cents establishing a 69.34 cent futures floor.


Nearby and Harvest Cotton Futures Prices

 

 

 

 

 

 



Wheat

March 2017 wheat futures closed at $4.41 down 8 cents since last Friday. March 2017 wheat futures traded between $4.40 and $4.64 this week. March wheat-to-corn price ratio was 1.20.Wheat net sales reported by exporters were above expectations with net sales of 20.9 million bushels for the 2016/17 marketing year and 0.7 million bushels for the 2017/18 marketing year. Exports for the week were down from last week at 14.3 million bushels. Wheat export sales were 87% of the USDA estimated total annual exports for the 2016/17 marketing year (June 1 to May 31), compared to a 5-year average of 88%. In Memphis, old crop cash wheat ranged from $4.55 to $4.62. Mar/May and Mar/Jul future spreads were 14 cents and 27 cents, respectively. May 2017 wheat futures closed at $4.55 down 8 cents since last Friday. May 2017 wheat-to-corn price ratio was 1.21.


Historical July Wheat Futures Prices

 

 

 

 

 

 


In Tennessee, June/July 2017 cash wheat ranged from $4.51 to $5.05. July 2017 wheat futures closed at $4.68 down 6 cents since last Friday. Downside price protection could be obtained by purchasing a $4.70 July 2017 Put Option costing 29 cents establishing a $4.41 futures floor.

Nearby and Fall Wheat Futures Prices

 

 

 

 

 

 



Additional Information:

If you would like further information or clarification on topics discussed in the crop comments section or would like to be added to our free email list please contact me at aaron.smith@utk.edu.