by Aaron Smith, Crops Marketing Specialist
April 19, 2024
Overview
Corn, cotton, soybeans, and wheat were down for the week.
Since the end of February, nearby corn futures have consistently traded between $4.21 ¾ and $4.48. During this time the largest daily move was +15 ¼ cents when the USDA released the Prospective Plantings report. Prices are likely to remain in this trading range until more is known about the Brazilian second corn crop and the US corn crop. Weather will guide price direction through the production year as no major changes are anticipated for short-term demand. New crop futures currently have a 40-cent premium compared to nearby. This premium will shrink as the weather risk is removed through the production year.
This week May soybeans challenged the contract low of $11.28 ½, set back on February 29th, before closing the week at $11.50 ½ on Friday. Holding above $11.40 next week will be key, or prices could drop to $11.00. There has been mostly bearish news for the past three months (South American production, increased planted acreage, strengthening USD, weak export demand, and large projected global ending stocks), but we are likely approaching a bottom in the old crop market. New crop prices will continue to be predominantly influenced by US planting progress and weather forecasts.
April has been a disastrous month for cotton prices. The nearby cotton contract fell from over 92 cents in April to 81 cents this week. Significant price support is available near 76-78 cents. Demand will continue to be the primary driver of prices and currently US cotton exports are struggling. Tight US ending stocks give some glimmer of hope for a rally led by the July contract, but this will need to be demand driven. New crop futures shed 7 cents in April, driven primarily by increased production outlook for the Southern Plains. December price support is solid near 76 cents, but producers looking for a return to mid-80 cent pricing opportunities may have to wait for a weather event or post-harvest if it does occur at all.
| Indicator | Previous | Current | Change |
|---|---|---|---|
| USD Index | 105.82 | 105.96 | 0.14 |
| Crude Oil | 85.47 | 83.55 | -1.92 |
| DJIA | 37,931 | 37,953 | 22 |
Corn
Across Tennessee, average corn basis (cash price-nearby futures price) strengthened or remained unchanged at West, Northwest, West-Central, North-Central, and Mississippi River elevators and barge points. Overall, basis for the week ranged from 60 under to 11 over, with an average of 14 under the May futures at elevators and barge points. Ethanol production for the week ending April 12 was 0.983 million barrels per day, down 73,000 from the previous week. Ethanol stocks were 26.08 million barrels, down 0.128 million barrels compared to last week. Corn net sales reported by exporters for April 5-11 were net sales of 19.7 million bushels for the 2023/24 marketing year and 2.6 million bushels for the 2024/25 marketing year. Exports for the same period were down 1% compared to last week at 60.9 million bushels. Corn export sales and commitments were 84% of the USDA estimated total annual exports for the 2023/24 marketing year (September 1 to August 31) compared to the previous 5-year average of 93%. May 2024 corn futures closed at $4.33, down 2 cents since last Friday. For the week May 2024 corn futures traded between $4.26 and $4.35. May/Jul and May/Dec future spreads were 9 and 32 cents. July 2024 corn futures closed at $4.42, down 5 cents since last Friday.
| Corn | May 24 | Change | Dec 24 | Change |
|---|---|---|---|---|
| Price | $4.33 | -$0.02 | $4.65 | -$0.07 |
| Support | $4.23 | $0.01 | $4.56 | -$0.04 |
| Resistance | $4.39 | -$0.04 | $4.74 | -$0.04 |
| 20 Day MA | $4.33 | -$0.02 | $4.69 | -$0.02 |
| 50 Day MA | $4.33 | -$0.02 | $4.67 | -$0.01 |
| 100 Day MA | $4.54 | -$0.03 | $4.81 | -$0.02 |
| 4-Week High | $4.48 | $0.00 | $4.81 | $0.00 |
| 4-Week Low | $4.24 | $0.00 | $4.59 | -$0.01 |
| Technical Trend | Down | = | Down | = |
The Crop Progress report estimated corn planted at 6% compared to 3% last week, 7% last year, and a 5-year average of 5%. In Tennessee, corn planting was estimated at 13% compared to 7% last week, 18% last year, and a 5-year average of 14%. New crop cash prices ranged from $3.80 to $4.49 at elevators and barge points. December 2024 corn futures closed at $4.65, down 7 cents since last Friday. Downside price protection could be obtained by purchasing a $4.70 December 2024 Put Option costing 37 cents establishing a $4.33 futures floor.
Soybeans
Across Tennessee the average soybean basis weakened or remained unchanged at West, Northwest, West-Central, North-Central, and Mississippi River elevators and barge points. Basis ranged from 33 under to 10 over the May futures contract, with an average basis at the end of the week of 9 under. Soybean net weekly sales reported by exporters were net sales of 17.9 million bushels for the 2023/24 marketing year and 9.7 million bushels for the 2024/25 marketing year. Exports for the same period were down 4% compared to last week at 17.7 million bushels. Soybean export sales and commitments were 89% of the USDA estimated total annual exports for the 2023/24 marketing year (September 1 to August 31), compared to the previous 5-year average of 95%. May 2024 soybean futures closed at $11.50, down 24 cents since last Friday. For the week May 2024 soybean futures traded between $11.31 and $11.76. May 2024 soybean-to-corn price ratio was 2.66 at the end of the week. May/Jul and May/Nov future spreads were 15 and 11 cents. July 2024 soybean futures closed at $11.65, down 21 cents since last Friday.
| Soybeans | May 24 | Change | Nov 24 | Change |
|---|---|---|---|---|
| Price | $11.50 | -$0.24 | $11.61 | -$0.15 |
| Support | $11.22 | -$0.21 | $11.40 | -$0.10 |
| Resistance | $11.55 | -$0.40 | $11.70 | -$0.24 |
| 20 Day MA | $11.74 | -$0.13 | $11.76 | -$0.08 |
| 50 Day MA | $11.74 | -$0.05 | $11.66 | -$0.02 |
| 100 Day MA | $12.30 | -$0.12 | $12.00 | -$0.07 |
| 4-Week High | $12.26 | $0.00 | $12.16 | $0.00 |
| 4-Week Low | $11.31 | -$0.20 | $11.46 | -$0.10 |
| Technical Trend | Down | = | Down | = |
The Crop Progress report estimated soybeans planted at 3% compared to 3% last year and a 5-year average of 1%. In Tennessee, soybean planting was estimated at 8% compared to 4% last week, 5% last year, and a 5-year average of 1%. New crop cash soybean prices at elevators and barge points ranged from $11.16 to $11.56. November 2024 soybean futures closed at $11.61, down 15 cents since last Friday. Downside price protection could be achieved by purchasing an $11.80 November 2024 Put Option which would cost 70 cents and set an $11.10 futures floor. Nov/Dec soybean-to-corn price ratio was 2.50 at the end of the week.
Cotton
North Delta upland cotton spot price quotes for April 18 were 76.36 cents/lb (41-4-34) and 78.36 cents/lb (31-3-35). Adjusted World Price (AWP) decreased 3.25 cents to 62.18 cents. Cotton net weekly sales reported by exporters were 146,100 bales for the 2023/24 marketing year and 80,100 bales for the 2024/25 marketing year. Exports for the same period were down 3% compared to last week at 266,700 bales. Upland cotton export sales were 96% of the USDA estimated total annual exports for the 2023/24 marketing year (August 1 to July 31), compared to the previous 5-year average of 104%. May 2024 cotton futures closed at 78.69 cents, down 3.93 cents since last Friday. For the week May 2024 cotton futures traded between 77.41 and 84.27 cents. May/Jul and May/Dec cotton futures spreads were 2.33 cents and -1.14 cents. July 2024 cotton futures closed at 81.02 cents, down 3.57 cents since last Friday.
| Cotton | May 24 | Change | Dec 24 | Change |
|---|---|---|---|---|
| Price | 78.69 | -3.93 | 77.55 | -2.56 |
| Support | 75.96 | -4.53 | 76.84 | -2.53 |
| Resistance | 82.07 | -2.96 | 78.75 | -2.52 |
| 20 Day MA | 86.49 | -3.27 | 81.89 | -1.30 |
| 50 Day MA | 91.31 | -0.81 | 82.96 | -0.36 |
| 100 Day MA | 87.06 | -0.08 | 81.11 | 0.02 |
| 4-Week High | 94.27 | -1.96 | 84.50 | 0.00 |
| 4-Week Low | 77.41 | -4.29 | 77.26 | -2.69 |
| Technical Trend | Down | = | 0.00 | – |
The Crop Progress report estimated cotton planted at 8% compared to 5% last week, 7% last year, and a 5-year average of 8%. In Tennessee, cotton planting was estimated at 0% compared to 1% last year and a 5-year average of 0%. December 2024 cotton futures closed at 77.55 cents, down 2.56 cents since last Friday. Downside price protection could be obtained by purchasing a 78 cent December 2024 Put Option costing 4.9 cents establishing a 73.1 cent futures floor.
Wheat
Wheat net weekly sales reported by exporters were net sales cancelations of 3.4 million bushels for the 2023/24 marketing year and net sales of 9.7 million bushels for the 2024/25 marketing year. Exports for the same period were down 22% compared to last week at 17.9 million bushels. Wheat export sales were 97% of the USDA estimated total annual exports for the 2023/24 marketing year (June 1 to May 31), compared to the previous 5-year average of 103%. Wheat cash prices at elevators and barge points ranged from $5.06 to $5.42. May 2024 wheat futures closed at $5.50, down 6 cents since last Friday. May 2024 wheat futures traded between $5.34 and $5.58 this week. May wheat-to-corn price ratio was 1.27. May/Jul and May/Sep future spreads were 16 and 34 cents.
| Wheat | May 24 | Change | Jul 24 | Change |
|---|---|---|---|---|
| Price | $5.50 | -$0.06 | $5.66 | -$0.04 |
| Support | $5.28 | -$0.15 | $5.44 | -$0.14 |
| Resistance | $5.65 | -$0.04 | $5.80 | -$0.02 |
| 20 Day MA | $5.53 | $0.01 | $5.68 | $0.01 |
| 50 Day MA | $5.58 | -$0.06 | $5.68 | -$0.05 |
| 100 Day MA | $5.88 | -$0.02 | $5.97 | -$0.02 |
| 4-Week High | $5.74 | $0.00 | $5.88 | $0.00 |
| 4-Week Low | $5.34 | $0.08 | $5.50 | $0.08 |
| Technical Trend | Down | – | Down | – |
The Crop Progress report indicated winter wheat condition at 55% good-to-excellent and 13% poor-to-very poor; winter wheat headed at 11% compared to 6% last week, 9% last year, and a 5-year average of 7%; and spring wheat planted at 7% compared to 3% last week, 2% last year, and a 5-year average of 6%. In Tennessee, winter wheat condition was estimated at 75% good-to-excellent and 9% poor-to-very poor; winter wheat jointing at 71% compared to 59% last week, 73% last year, and a 5-year average of 73%; and winter wheat headed at 11% compared to 2% last week, 2% last year, and a 5-year average of 6%. July 2024 wheat futures closed at $5.66, down 4 cents since last Friday. Downside price protection could be obtained by purchasing a $5.70 July 2024 Put Option costing 37 cents establishing a $5.33 futures floor. New crop wheat cash prices at elevators and barge points ranged from $5.22 to $5.53. September 2024 wheat futures closed at $5.84, down 2 cents since last Friday.
Additional Information
Links for data presented:
U.S. Export Sales – https://apps.fas.usda.gov/export-sales/esrd1.html
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
EIA: Weekly Supply Estimates – https://www.eia.gov/dnav/pet/pet_sum_sndw_a_EPOOXE_sae_mbbl_w.htm
Upland Cotton Reports – https://www.fsa.usda.gov/FSA/epasReports?area=home&subject=ecpa&topic=fta-uc
Tennessee Crop Progress – https://www.nass.usda.gov/Statistics_by_State/Tennessee/Publications/Crop_Progress_&_Condition/
U.S. Crop Progress – http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1048
USDA AMS: Market News – https://www.ams.usda.gov/market-news/search-market-news
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.