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2024 COTTON BUDGET
published 2-1-2024

Variety Report Narrative Published
1-12-2024

 2024 Variety Report Card - 4 more locations added

UPDATED 1-17-2024
This updated resorted a few but generally kept them in the same groups.


Call Spring if you need help with log in or farm information.
 

Futures
@CT - COTTON #2 - ICEFU
Month Open High Low Last Change Close Time More
Mar 24 93.88 95.42 93.51 95.42 0.73 94.93s 01:28P Chart for @CT4H Options for @CT4H
May 24 94.26 94.66 92.60 93.37 -0.97 93.49s 01:28P Chart for @CT4K Options for @CT4K
Jul 24 93.49 93.92 92.00 92.50 -1.00 92.62s 01:28P Chart for @CT4N Options for @CT4N
Oct 24 85.09 85.57 84.75 85.57 -0.35 85.28s 01:28P Chart for @CT4V Options for @CT4V
Dec 24 83.31 83.50 82.76 83.30 -0.10 83.39s 01:28P Chart for @CT4Z Options for @CT4Z
Mar 25 83.45 83.69 82.84 83.47 0.01 83.55s 01:28P Chart for @CT5H Options for @CT5H
@C - CORN - CBOT
Month Open High Low Last Change Close Time More
Mar 24 406'0 409'2 398'4 399'6 -6'2 399'6s 03:45P Chart for @C4H Options for @C4H
May 24 418'4 421'6 411'6 413'6 -5'0 413'4s 03:52P Chart for @C4K Options for @C4K
Jul 24 431'2 434'0 424'2 426'4 -4'4 426'2s 03:36P Chart for @C4N Options for @C4N
@S - SOYBEANS - CBOT
Month Open High Low Last Change Close Time More
Mar 24 1148'0 1154'0 1130'2 1135'6 -14'6 1133'0s 03:40P Chart for @S4H Options for @S4H
May 24 1153'0 1158'4 1138'2 1143'4 -10'6 1141'6s 03:40P Chart for @S4K Options for @S4K
Jul 24 1160'6 1167'4 1148'2 1152'6 -9'4 1151'2s 03:26P Chart for @S4N Options for @S4N
@KW - HARD RED WINTER WHEAT - KCBT
Month Open High Low Last Change Close Time More
Mar 24 574'2 579'0 565'2 569'2 -5'2 568'6s 01:24P Chart for @KW4H Options for @KW4H
May 24 571'0 576'0 560'6 566'0 -6'0 565'4s 03:56P Chart for @KW4K Options for @KW4K
Jul 24 566'4 570'4 555'6 558'4 -8'0 558'0s 01:30P Chart for @KW4N Options for @KW4N
@W - WHEAT - CBOT
Month Open High Low Last Change Close Time More
Mar 24 584'6 592'4 572'4 573'4 -9'6 573'4s 02:30P Chart for @W4H Options for @W4H
May 24 580'2 587'4 568'0 569'4 -10'2 569'0s 03:56P Chart for @W4K Options for @W4K
Jul 24 580'2 587'4 568'6 570'2 -10'0 570'0s 01:30P Chart for @W4N Options for @W4N
My Custom Markets
Symbol Open High Low Last Change Close Time More

Johnny's Blog


February 15, 2024

RISK MANAGEMENT - Thinking out of the BOX
2-15-2024
The first thing I usually think about when I use the term Risk Management is defensive strategies to protect myself when things are not going the way I had hoped.  Also a great offense reduces risk as well.

Put the BEST OFFENSE on the Field
The first thing we need to think about to reduce Agricultural Risk is to maximize the most profitable crops.  A typical thousand-acre operation will rotate corn, soybeans, peanuts and cotton.  Maintaining rotation has been the strategy to use for the last 5 years as profits for the crops were similar (peanuts being the best).  Corn has always gotten the best land.  Cotton has gotten the most challenging land, and soybeans have been dragging the rear but typically get better land than cotton unless peanut needs more rotation away from soybeans.All
Here is a Hypothetical rotation for 1000 acres:
Peanut – 250
Cotton – 500
Corn – 150
Soybeans – 100
 All crops pay cost of production,  Return to overhead = $373,000
 
This year – average cotton has twice the profitability of soybeans and 3X over corn even though corn is getting the best land.  To improved offense, increase cotton acreage and/or put it on better land.  Decreasing corn or putting it on poor land improves overall farm income(putting corn on less productive land is the thinking out of the box idea but it will increase overall farm income if replaced with cotton on that good land).  Here are some examples and the impact on farm revenue.  This example uses my budget for yields and current prices.  Use your information for the most accurate analysis or call me:

  • 250 peanut + 750 cotton with no corn or soybean would increase cotton yield by putting it on better land and raise farm income by $195K without compromising peanut rotation.
  • Even without more cotton, Keep acres the same, just put corn on the least productive land.  You can still get half the gain of a total switch.  This strategy will reduce corn yield by 20% and increase cotton by 20% on those acres.  Even though you lose money on the corn, you make 4X more on the good land (instead of 3X on average land) raising total farm revenue by $100k and you keep acreage the same.
For these examples, today’s new crop prices are being used along with the yield change idea.  If all your land is productive then the advantage of cotton is not quite as much as it will only be 3X more profitable.  Everybody’s numbers are different and yours will be more accurate.
 
IN SUMMARY: To Maximize TOTAL FARM OFFENSE –
  • MAX OUT PICKER CAPACITY acreage
  • Plant cotton on best land.
 
COTTON DEFENSIVE STRATAGIES FOR 2024 (updated 2-19)
In a bad year, cotton has better insurance and other program support for price through POP payments that offer more risk protection than our other commodities do compared to cost of production.
Insurance and STAX have both improved over the last 2 weeks with the current price rally going on.  PLC (price only) & ARC (price & yield) are both on the table for Cotton on farms with a cotton base that matches planting intentions.  STAX will be the best defense on farms with less than 67% to 75% of their planted acreage.  Everything needs insurance and cotton insurance should allow us to insure a profit.  Probably the only crop that will do it this year.  Price discovery for insurance and STAX price is complete for NC but will average all of February for Virginia.  Deadline for signup is March 1 for NC and March 15th in VA.
Chores:
  1. Make sure you know your base acreage for cotton.  If you do not have at least 50% of the intended planted acreage for cotton covered by cotton base, The best risk management approach is to opt out of the FSA program (PLC/ARC) and get STAX if you want a higher safety for income protection.  Of course if you have high tolerance for risk, then the FSA program still provides some safety and does not cost.
  2. If you have a good base, then the FSA program provides a safety net. 
    1. You would participate in this scenario unless the new crop price keeps going up for the next 2 weeks.  This could make STAX more desirable regardless of base.
    2. Pick PLC if you are more concerned about the price and not as concerned about yield.  PLC could trigger.
    3. ARC has not ever made sense in cotton until this year.  It’s not better than PLC but it could be if we have a yield problem since PLC is only for price, but ARC is income based on price and yield.  If we have good yields and just a price problem, then PLC will be better.  ARC is like STAX in this way although the income-trigger from STAX appears like it will be higher offering a higher trigger based off protected income.  STAX should be better but it is not free. 

DISCLAIMER: The data contained herein is for informational, conversational, and philosophical thinking and is for general purposes only. Ideas expressed apply to the Uppter Southeast growing region. Although the information was obtained from various sources, which we believe to be reliable, we do not in any way guarantee its accuracy or completeness. Comments are influenced by past experiences, personal bias and hypothetical speculation by the writer and are not always accurate predictors of future events. Specific references to Agricultural Products and Rates are used for examples and do not reflect specific endorsement or recommendations for use. Always read and follow all label directions and precautions for use. We disclaim any responsibility for any errors or omissions contained herein. FULL DISCLOSURE: There is no compensation received by Johnny to promote any product referenced with in this blog. Johnny is a paid employee of Commonwealth Gin



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Cond: N/A Wind Spd: 6 mph
Sunrise: 6:45 Sunset: 5:54
As reported at SUFFOLK, VA at 6:00 PM
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Quote Ticker
  • COTTON #2 (Mar 24) 95.42 0.73 2/23/24   1:28 PM CST
  • COTTON #2 (May 24) 93.37 -0.97 2/23/24   1:28 PM CST
  • COTTON #2 (Jul 24) 92.50 -1.00 2/23/24   1:28 PM CST
  • COTTON #2 (Oct 24) 85.57 -0.35 2/23/24   1:28 PM CST
  • COTTON #2 (Dec 24) 83.30 -0.10 2/23/24   1:28 PM CST
  • COTTON #2 (Mar 25) 83.47 0.01 2/23/24   1:28 PM CST
  • CORN (Mar 24) 399'6 -6'2 2/23/24   1:19 PM CST
  • CORN (May 24) 413'6 -5'0 2/23/24   1:19 PM CST
  • CORN (Jul 24) 426'4 -4'4 2/23/24   1:19 PM CST
  • SOYBEANS (Mar 24) 1135'6 -14'6 2/23/24   1:19 PM CST
  • SOYBEANS (May 24) 1143'4 -10'6 2/23/24   1:19 PM CST
  • SOYBEANS (Jul 24) 1152'6 -9'4 2/23/24   1:19 PM CST
  • HARD RED WINTER WHEAT (Mar 24) 569'2 -5'2 2/23/24   1:19 PM CST
  • HARD RED WINTER WHEAT (May 24) 566'0 -6'0 2/23/24   1:19 PM CST
  • HARD RED WINTER WHEAT (Jul 24) 558'4 -8'0 2/23/24   1:19 PM CST
  • WHEAT (Mar 24) 573'4 -9'6 2/23/24   1:19 PM CST
  • WHEAT (May 24) 569'4 -10'2 2/23/24   1:19 PM CST
  • WHEAT (Jul 24) 570'2 -10'0 2/23/24   1:19 PM CST

 
 
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