Market Analysis
U.S. soybean production is projected at a record 3.390 billion bushels, up 375 million from the drought-reduced 2012 crop.
Soybean prices are weak and likely to get even weaker.
The Pro Farmer Crop Tour found some fields with pod counts 20% above last year, and reports a 44.9-bu. national yield, versus USDA’s 44 bu.
After the USDA released its World Agricultural Supply and Demand Estimates (WASDE) Thursday, corn and soybeans took the lead story away from wheat. Ending stocks for wheat for 2017/18 have been lowered 25 million bushels, the report citing increased exports as the cause.
Wheat acres in the U.S. in 2017 were at lows not seen for a century. Going into 2018, it looks like that could be the case as well with farmers planting less wheat.
In 2017, wheat acres hit a 108-year low, and they’ll be fewer acres in 2018.
Wheat growers have had a rough go the last couple of years with low prices and the least amount of acres planted in nearly a century.
In 2016, wheat farmers have seen ugly circumstances, now they’re trying to help the problem by reducing acreage.
Scarce stocks could send prices soaring or crashing just as they did in 2008 and 2009, when prices rose to record-highs only to crash following the Great Recession.
Even though stocks are declining, supply remains secure worldwide.
The Kansas City Board of Trade’s December wheat contract prices have declined $1.94 to $7.05 since Aug. 29.
Between now and December 1, wheat prices may be anywhere between $7.50 and $11.
The USDA released the December WASDE reports Friday and the market just yawned.
Over the last several weeks, cotton prices have seen a decent run in prices. Ashley Arrington, founder of AgriAuthority, told AgDay host Clinton Griffiths cotton markets can be “dramatic at times, especially in relation to the July contract.”
Cotton markets usually aren’t discussed at the AgDay agribusiness desk. John Payne of Daniels Trading is discussing the cotton rally and the opportunities to market the crop.
Following the recent record-high cotton prices, demand for cotton has steadily decreased while output has increased.
Strong demand for cotton will push the new-crop annual average price to a new record high despite anticipated record-high global cotton production.
Farm Journal Economist Chip Flory joins AgDay’s Clinton Griffiths for analysis of the WASDE and Crop Production reports.
Lack of longer-term investors imperils crop markets, bank says
Cash rents are due in roughly 30 days, and some farmers are looking at ways to generate some cash. One way to do it is to move grain, and that’s when basis can come into play.
Earlier this year, China announced they would require ethanol blends in all fuel by 2020. This announcement gave U.S. corn producers hope that this could bump corn prices in the coming years in preparation.
In 1983 for the first time, planted soybean acres surpassed corn acres by 3.5 million acres. Some market analysts thought 2017 would be another year this would happen, but it didn’t.
When USDA released its September Crop Production and World Agricultural Supply and Demand Estimates (WASDE), corn and soybean prices saw red.
Summer crop harvest is a few weeks away, and bin space could be a concern to some farmers.
The latest crop progress report from the U.S. Department of Agriculture (USDA), 67 percent of the corn crop was rated good to excellent. Indiana is lagging behind with only 45 percent of its crop in that category.
See all of the report data, coverage and analysis of USDA’s March 31 Prospective Plantings and Grain Stocks reports.
He made no changes to his Argentine crop estimates.
See what percentage of new and old-crop corn and soybeans market advisers have priced. Pro Farmer’s Brian Grete explains the situation.