Nearby Futures Prices Are Now At Their Highest Level Since 2014


percent ($1.71 ¼) since August 12. March soy- bean futures closed the week at $13.74 ¾, up 55 percent ($4.48 ½) since August 12. Nearby fu- tures prices are now at their highest level since 2014. The upward trend remains well intact with new highs being set al- most every week. The high futures prices and strong basis across Ten- nessee have


M likely


caused many producers to sell most (or all) of the remaining crop in stor- age (a prudent decision given where prices were just 5 months ago). A few will continue to wait to see how high prices will go before selling the re- mainder of the crop, ac- cepting the associated risk (a riskier move with potentially greater pay- offs). Looking forward many


producers will consider starting or increasing 2021 crop pricing. De- cember 2021 corn is at $4.40 and soybeans are $11.60, very strong price offerings compared to 2015-2020 new crop prices at the same time of the year, when prices only occasionally exceed $4 for corn and $10 for soybeans. While starting to price the crop is rec- ommended producers should caution them- selves not to sell their


DR. AARON SMITH KNOXVILLE, TENN.


arch corn futures breached $5.00 this week, up 52


way out of this rally. Pricing more than 50 percent of production be- fore planting may limit a producers ability to take advantage of additional rallies, particularly if on farm storage post-har- vest is an option. An in- cremental approach to pricing into this rally should be considered with clearly defined stops based on the producers comfort level with pricing production based on the time of the year. 80 cent cotton was not


what was predicted based on current global supply and demand fun- damentals, but the mar- ket broke through that barrier this week. The trend that started back in early April remains in place. New crop cotton futures have rallied along with grains and oilseeds pushing the December contract over 76 cents. While substantially im- proved, it is unlikely that current cotton prices will attract acres over corn and soybeans. In Ten- nessee, cotton acres will likely be limited to those with existing investment in cotton infrastructure and harvest equipment. Wheat prices have ben-


efitted from the rally in corn and soybeans. How- ever, unlike corn and soybeans, wheat prices do not have the same tailwinds of tight global stocks and production concerns in Brazil (Brazil typically imports wheat). There are wheat produc- tion concerns in Ar- gentina and the US plains. However, wheat is far more diversified in terms of production re- gions than corn or soy- beans (wheat is grown on almost every continent and in both hemi- spheres). This reduces the chance of large scale production failures com- pared to crops with


greater concentration of production. Corn Ethanol production for


the week ending January 1 was 0.935 million bar- rels per day, up 1,000 barrels from the previous week. Ethanol stocks were 23.284 million bar- rels, down 0.220 million barrels compared to last week. Corn net sales re- ported by exporters for December 25-31 were down compared to last week with net sales of 29.5 million bushels for the 2020/21 marketing year. Exports for the same time period were down 23 percent from last week at 40.5 million bushels. Corn export sales and commitments were 65 percent of the USDA estimated total ex- ports for the 2020/21 marketing year (Septem- ber 1 to August 31) com- pared to the previous 5-year average of 53 per- cent. Across Tennessee, average corn basis (cash price-nearby


futures


price) strengthened at Northwest, North-Cen- tral, Mississippi River, West-Central, and West elevators and barge points. Overall, basis for the week ranged from 5 over to 40 over, with an average of 23 over the March futures. March 2021 corn futures closed at $4.96, up 12 cents since last Friday. For the week, March 2021 corn futures traded between $4.79


and $5.02.


Mar/May and Mar/Dec future spreads were 1 and -56 cents. May 2021 corn futures closed at $4.97, up 14 cents since last Friday. December 2021 corn


futures closed at $4.40, up 6 cents since last Fri- day. Downside price pro- tection could be obtained by purchasing a $4.50 December 2021 Put Op- tion costing 48 cents es-


Kentucky Agricultural Finance Corp. Approves More Than $300 Thousand


Beef, Grain And Poultry Operations To Be Improved Across The Commonwealth


T FRANKFORT, KY.


he Kentucky Agri- cultural Finance Corp.


(KAFC) ap-


proved $339,375 in three agricultural loans for projects in the com- monwealth at its board meeting today.


“This month the KAFC


approved loans that support some of our largest agricultural com- modities in poultry, beef, and grain production,” said Gov. Andy Beshear. “The Kentucky Agricul- tural Finance Corpora-


tion’s impact on Ken- tucky agriculture is al- ready off to a great start in 2021 and we are ex- cited to see what this year has to offer.” Agricultural


structure


Infra- Loan


CONTINUED ON PAGE 10 MONDAY FEEDER SALE & VIDEO AUCTION


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tablishing a $4.00 fu- tures floor. Soybeans Net sales reported by


exporters were down compared to last week with net sales of 1.4 mil- lion bushels for the 2020/21 marketing year – a marketing year low – and 2.9 million bushels for the 2021/22 market- ing year. Exports for the same period were down 24 percent compared to last week at 68.2 million bushels. Soybean export sales and commitments were 91 percent of the USDA estimated total an- nual exports for the 2020/21 marketing year (September 1 to August 31), compared to the pre- vious 5-year average of 73 percent. Across Ten- nessee, average soybean basis strengthened at West-Central, Missis- sippi River, West, North- Central, and Northwest elevators and barge points. Basis ranged from 1 under to 40 over the March futures con- tract. Average basis at the end of the week was 24 over the March fu- tures contract. March 2021 soybean futures closed at $13.74, up 63 cents since last Friday. For the week, March 2021 soybean futures traded between $13.01 and $13.86. Mar/May and Mar/Nov future spreads were -3 and -213 cents. May 2021 soybean futures closed at $13.71, up 65 cents since last Friday. March 2021 soy- bean-to-corn price ratio was 2.77 at the end of the week. November 2021 soy-


bean futures closed at $11.61, up 50 cents


since last Friday. Down- side price protection could be achieved by purchasing an $11.80 November 2021 Put Op- tion which would cost 104 cents and set a $10.76 futures floor. Nov/Dec 2021 soybean- to-corn price ratio was 2.64 at the end of the week. Cotton Net sales reported by


exporters were down compared to last week with net sales of 153,100 bales for the 2020/21 marketing year. Exports for the same time period were down 2 percent compared to last week at 270,000 bales. Upland cotton export sales were 79 percent of the USDA estimated total annual exports for the 2020/21 marketing year (August 1 to July 31), compared to the previous 5-year aver- age of 73 percent. Delta upland cotton spot price quotes for January 7 were 77.26 cents/lb (41- 4-34) and 79.51 cents/lb (31-3-35).


Adjusted


World Price (AWP) in- creased 2.22 cents to 65.25 cents. March 2021 cotton futures closed at 79.77, up 1.65 cents since last Friday. For the week, March 2021 cotton futures traded between 78.25 and 80.93 cents. Mar/May and Mar/Dec cotton futures spreads were 0.78 cents and - 3.58 cents. May 2021 cotton futures closed at 80.55 cents, up 1.85 cents since last Friday. December 2021 cotton


futures closed at 76.19 cents, up 1.32 cents since last Friday. Down- side price protection could be obtained by


purchasing a 77 cent De- cember 2021 Put Option costing 6.16 cents estab- lishing a 70.84 cent fu- tures floor. Wheat Wheat net sales re-


ported by exporters were down compared to last week with net sales of 10.1 million bushels for the 2020/21 marketing year and 0.2 million bushels for 2021/22 marketing year. Exports for the same time period were down 4 percent from last week at 15.4 million bushels. Wheat export sales were 78 per- cent of the USDA esti- mated total annual exports for the 2020/21 marketing year (June 1 to May 31), compared to the previous 5-year aver- age of 79 percent. March 2021 wheat


futures


closed at $6.38, down 2 cents since last Friday. March 2021 wheat fu- tures traded between $6.34 and $6.64 this week. March wheat-to- corn price ratio was 1.29. Mar/May and Mar/Jul future spreads were 2 and -7 cents. May 2021 wheat futures closed at $6.40, up 1 cent since last Friday. In Tennessee, new crop


wheat cash contracts ranged from $6.16 to $6.54. July 2021 wheat futures closed at $6.31, up 3 cents since last Fri- day. Downside price pro- tection could be obtained by purchasing a $6.40 July 2021 Put Option costing 54 cents estab- lishing a $5.86 futures floor.


∆ DR. AARON SMITH: As-


sistant Professor, Crop Marketing Specialist, Uni- versity of Tennessee


8597 STATE HIGHWAY KK PERRYVILLE, MO 63775 OFFICE: 573.788.2143


MARY CELL: 573.225.7932 RECEIVING STATION


Mary Ann Friese


Kenneth W. Friese, Inc. FIELD REPRESENTATIVE


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