​Weekly Crop Comments by Dr. Aaron Smit                                                       February 14, 2020


 
 


Overview
​Corn and wheat were down; soybeans were up; and cotton was mixed for the week.

The February WASDE report was released on Tuesday. Overall the report was neutral for corn and soybeans and bearish for cotton and wheat.

U.S. corn ending stocks were unchanged, as a 50 million bushel increase in ethanol use was offset by a 50 million bushel decrease in exports. Foreign corn ending stocks for the 2019/20 marketing year were decreased 38 million bushels compared to January. Global corn stocks are now projected at 11.686 billion bushels, 931 million bushels lower than last year.

Projected US soybean exports were increased 50 million bushels to 1.825 billion bushels. Brazil’s soybean production was increased to 4.593 billion, surpassing 2019 US production by over a billion bushels. With a record large crop, Brazil will continue to provide significant export competition with US soybeans.  Global soybean stocks are  projected at 3.633 billion bushels, down from over 4 billion bushels for the previous marketing year.

No revisions were made to domestic cotton production, however foreign stocks were increased by 2.53 million bales and China consumption was dropped 1 million bales to 37.5 million, the lowest since 2015/16.

Wheat was the biggest report loser with nearby futures down 10 cents for the day. Global stocks are now estimated at 10.583 billion bushels up 358 million year-over-year. Large stocks and stagnant global demand for wheat will create headwinds for wheat prices despite the lowest US winter wheat planted acreage since 1907.

Details of the February WASDE can be found on our Monthly Crop Comments page.

Projected crop insurance prices as of February 14 were: corn - $3.92; cotton - $0.69; and soybeans - $9.20. The price discovery process will conclude February 29.

 

Previous

Current

Change

USD Index

98.57

99.01

0.43

Crude Oil

50.32

52.03

1.71

DJIA

29,103

29,311

208



Corn
Ethanol production for the week ending February 7 was 1.033 million barrels per day, down 48,000 barrels from the previous week. Ethanol stocks were 24.358 million barrels, up 0.884 million barrels compare to last week. Corn net sales reported by exporters for January 31 to February 6 were down compared to last week with net sales of 38.1 million bushels for the 2019/20 marketing year. Exports for the same time period were up 31% from last week at 30.8 million bushels. Corn export sales and commitments were 54% of the USDA estimated total exports for the 2019/20 marketing year (September 1 to August 31) compared to the previous 5-year average of 66%. Across Tennessee, average corn basis (cash price-nearby futures price) strengthened or remained unchanged at Northwest Barge Points, Northwest, and Upper-middle Tennessee and weakened at Memphis. Overall, basis for the week ranged from 6 over to 25 over, with an average of 17 over the March futures at elevators and barge points. March 2020 corn futures closed at $3.77, down 6 cents since last Friday. For the week, March 2020 corn futures traded between $3.76 and $3.83. Mar/May and Mar/Dec future spreads were 5 and 11 cents. May 2020 corn futures closed at $3.82, down 6 cents since last Friday.

Corn

Mar 20

Change

Dec 20

Change

Price

$3.77

-$0.06

$3.88

-$0.06

Support

$3.73

-$0.04

$3.86

-$0.02

Resistance

$3.83

-$0.04

$3.93

-$0.03

20 Day MA

$3.83

-$0.01

$3.94

-$0.03

50 Day MA

$3.83

$0.00

$3.97

$0.00

100 Day MA

$3.87

$0.00

$3.99

-$0.01

4-Week High

$3.94

$0.00

$4.04

$0.00

4-Week Low

$3.75

$0.00

$3.88

$0.00

Technical Trend

Strong Down

-

Strong Down

-

In Tennessee, new crop cash corn contracts ranged from $3.88 to $4.10. December 2020 corn futures closed at $3.88, down 6 cents since last Friday. Downside price protection could be obtained by purchasing a $3.90 December 2020 Put Option costing 24 cents establishing a $3.66 futures floor.

Corn Futures Graph


 
Soybeans
Net sales reported by exporters were down compared to last week with net sales of 23.7 million bushels for the 2019/20 marketing year and 0.2 million bushels for the 2020/21 marketing year. Exports for the same period were down 58% compared to last week at 22.5 million bushels. Soybean export sales and commitments were 66% 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 82%. Average soybean basis strengthened at Memphis, Northwest Barge Points, and Upper-middle Tennessee and weakened at Northwest Tennessee. Basis ranged from 24 under to 28 over the March futures contract at elevators and barge points. Average basis at the end of the week was 10 over the March futures contract. March 2020 soybean futures closed at $8.93, up 11 cents since last Friday. For the week, March 2020 soybean futures traded between $8.78 and $8.99. Mar/May and Mar/Nov future spreads were 10 and 29 cents. May 2020 soybean futures closed at $8.95, up 9 cents since last Friday. March soybean-to-corn price ratio was 2.37 at the end of the week.

Soybeans

Mar 20

Change

Nov 20

Change

Price

$8.93

$0.11

$9.22

$0.04

Support

$8.85

$0.13

$9.16

$0.05

Resistance

$9.03

$0.14

$9.28

$0.01

20 Day MA

$8.92

-$0.12

$9.28

-$0.11

50 Day MA

$9.17

$0.00

$9.48

-$0.01

100 Day MA

$9.26

-$0.01

$9.53

-$0.01

4-Week High

$9.43

-$0.11

$9.70

-$0.10

4-Week Low

$8.68

$0.00

$9.09

$0.00

Technical Trend

Down

+

Down

+

In Tennessee, new crop soybean cash contracts ranged from $8.84 to $9.34. Nov/Dec 2020 soybean-to-corn price ratio was 2.38 at the end of the week. November 2020 soybean futures closed at $9.22, up 4 cents since last Friday. Downside price protection could be achieved by purchasing a $9.40 November 2020 Put Option which would cost 52 cents and set an $8.88 futures floor.

Soybean Futures Graph


 
Cotton 
Net sales reported by exporters were up compared to last week with net sales of 350,900 bales for the 2019/20 marketing year and 57,300 bales for the 2020/21 marketing year. Exports for the same time period were down 4% compared to last week at 400,500 bales. Upland cotton export sales were 86% 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 81%. Delta upland cotton spot price quotes for February 13 were 65.00 cents/lb (41-4-34) and 67.25 cents/lb (31-3-35). Adjusted World Price (AWP) increased 0.38 cents to 58.82 cents. March 2020 cotton futures closed at 67.41 cents, down 0.34 cents since last Friday. For the week, March 2020 cotton futures traded between 67.21 and 68.79 cents. Mar/May and Mar/Dec cotton futures spreads were 1 cent and 1.65 cents. May 2020 cotton futures closed at 68.41, up 0.27 cents since last Friday.

Cotton

Mar 20

Change

Dec 20

Change

Price

67.41

-0.34

69.06

0.20

Support

66.80

0.08

68.33

0.26

Resistance

68.24

-0.28

69.87

0.36

20 Day MA

68.75

-0.73

69.83

-0.74

50 Day MA

68.49

0.29

69.91

0.20

100 Day MA

66.51

0.33

68.22

0.27

4-Week High

71.38

-0.58

72.47

-0.53

4-Week Low

66.75

0.00

67.57

0.00

Technical Trend

Down

=

Down

=


December 2020 cotton futures closed at 69.06, up 0.2 cents since last Friday. Downside price protection could be obtained by purchasing a 70 cent December 2020 Put Option costing 4.37 cents establishing a 65.63 cent futures floor.

Cotton Futures Graph


Wheat
Wheat net sales reported by exporters were up compared to last week with net sales of 23.7 million bushels for the 2019/20 marketing year and 1.6 million bushels for the 2020/21 marketing year. Exports for the same time period were up 25% from last week at 18.6 million bushels. Wheat export sales were 80% 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 88%. March 2020 wheat futures closed at $5.42, down 16 cents since last Friday. March 2020 wheat futures traded between $5.38 and $5.60 this week. March wheat-to-corn price ratio was 1.44. Mar/May and Mar/Jul future spreads were -1 and -1 cent. May 2020 wheat futures closed at $5.41, down 15 cents since last Friday. May wheat-to-corn price ratio was 1.42.   

Wheat

Mar 20

Change

Jul 20

Change

Price

$5.42

-$0.16

$5.41

-$0.16

Support

$5.37

-$0.11

$5.36

-$0.11

Resistance

$5.52

-$0.16

$5.50

-$0.14

20 Day MA

$5.61

-$0.05

$5.59

-$0.06

50 Day MA

$5.52

$0.01

$5.55

$0.01

100 Day MA

$5.33

$0.03

$5.38

$0.02

4-Week High

$5.92

$0.00

$5.89

$0.00

4-Week Low

$5.38

-$0.07

$5.41

-$0.05

Technical Trend

Down

-

Down

-


In Tennessee, June/July 2020 cash contracts ranged from $5.50 to $5.96. July 2020 wheat futures closed at $5.41, down 16 cents since last Friday. Downside price protection could be obtained by purchasing a $5.50 July 2020 Put Option costing 34 cents establishing a $5.16 futures floor.

 Wheat Futures Graph


 
Additional Information: 
Links for data presented:
USDA FAS: Weekly Export Performance Indicator – https://apps.fas.usda.gov/esrquery/esrpi.aspx
EIA: Weekly ethanol Plant Production - https://www.eia.gov/dnav/pet/pet_pnp_wprode_s1_w.htm
 
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.




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