Overview
Corn, cotton, and wheat were down; soybeans were up for the week. Harvest corn prices have dropped about 40 cents per bushel since May 9th due to strong planting progress and beneficial weather forecasts. November 2014 soybean futures achieved a new high this week at $12.79/bu. Prices were supported by good planting conditions that aided corn planting progress in many states and should limit producers switching corn acreage to soybeans. Nearby soybean futures received support through very tight ending stocks as a result of stronger crush margins and exports. China continues to be the key market in soybeans for both old crop and new crop as demand for protein has increased dramatically. December cotton futures retreated below the 80 cent level for the first time since April 10th. Hopefully cotton producers were able to price some 2014 in the lower middle 80’s prior to planting. There is a great deal of uncertainty in cotton markets due to record global reserves. Whether producers will get another chance to price cotton above 84 cents will depend in large part on Chinese cotton policy and weather conditions in Texas. July 2014 wheat futures dropped below $6.60/bu for the first time since March 12th, continuing the downward trend from last week.

Corn
July 2014 corn futures closed at $4.78 down 5 cents from last week with support at $4.67 and resistance at $4.87. Across Tennessee basis (cash price- nearby future price) strengthened in Lower-middle Tennessee and weakened or remained unchanged at Memphis, Northwest Barge Points, Upper-middle, and Northwest Tennessee. Overall basis for the week ranged from 4 under to 21 over the July futures contract with an average of 12 over at the end of the week. Corn net sales reported by exporters from May 9th to 15th were within expectations at 20 million bushels for the 2013/14 marketing year and within expectations at 2.5 million bushels for the 2014/15 marketing year. Exports for the same time period were up from last week at 45.6 million bushels. Corn export sales and commitments are 93% of the USDA estimated total annual exports for the 2013/14 marketing year (September 1 to August 31) compared to a 5-year average of 93%. Ethanol production for the week ending May 16th was 925,000 barrels per day up 3,000 barrels per day. Ending ethanol stocks were 16.99 million barrels down 312,000 barrels. July/Sept and July/Dec future spreads were -3 cents and -3 cents, respectively.


September 2014 corn futures closed at $4.75 down 6 cents from last week with support at $4.64 and resistance at $4.84. December futures closed at $4.75. Nationally, the May 19th Crop Progress report estimated corn planting at 73% compared to 59% last week, 65% last year, and a 5-year average of 76%; and corn emerged at 34% compared to 18% last week, 17% last year and a 5-year average of 42%. In Tennessee, corn planted was estimated at 93% compared to 87% last week, 77% last year, and a 5-year average of 85%; and corn emerged at 76% compared to 53% last week, 54% last year, and a 5-year average of 72%. This week September and December 2014 corn futures prices traded between $4.68 and $4.80. September cash forward contracts at elevators and barge points for the week averaged $4.63 with a range of $4.41 to $4.96. Downside price protection could be obtained by purchasing a $4.80 September 2014 Put Option costing 28 cents establishing a $4.52 futures floor.
Soybeans
July 2014 soybean futures closed at $15.15 up 50 cents for the week with support at $14.85 and resistance at $15.53. Nearby soybean to corn price ratio was 3.17 at the end of the week. For the week, average soybean basis strengthened or remained unchanged at Memphis, Northwest Barge Points, Northwest, and Lower-middle Tennessee and weakened at Upper-middle Tennessee. Basis ranged from 17 under to 40 over the July futures contract at elevators and barge points. Average basis at the end of the week was 13 over the July futures contract. Net sales reported by exporters from May 9th to 15th were above expectations with net sales of 6.0 million bushels for the 2013/14 marketing year and below expectations for the 2014/15 marketing year with net sales of 16.6 million bushels. Exports for the same period were up from last week at 7.5 million bushels. Soybean export sales and commitments are 103% of the USDA estimated total annual exports for the 2013/14 marketing year (September 1 to August 31), compared to a 5-year average of 99%. August 2014 soybean futures were trading at $14.45. July/Aug and July/Nov future spreads were -70 cents and -250 cents.