USDA Projects US Soybean Exports At 1.755 Million Bushels

DR. AARON SMITH

KNOXVILLE, TENNESSEE

The October WASDE report saw USDA decrease US national average soybean yield 0.5 bu/acre to 49.6 bu/acre, corn yield decreased 0.8 bu/acre to 173 bu/acre, and cotton was decreased 19 lb/acre to 767 lb/acre. The small reductions in yield highlight the dry conditions that many projected would further reduce average yield. However, 2023 yields were highly regionalized, and the impact of the drought was felt by different regions at different times during the production year making national average yield estimates more challenging to project than in most years. 

December corn futures continue to move mostly sideways, trading between $4.67 and $5.07 since August 2. Corn price direction will be dictated by US export sales pace and South American crop progress. So far, US export sales commitments are 9% below the five-year average pace. Currently, USDA projects US corn exports at 2.025 billion bushels. 

November soybean prices rebounded the day after the WASDE report closing Thursday up 37 1⁄2 cents. US projected ending stocks remain tight at 220 million bushels. Foreign stocks were reduced 133 million bushels however remain projected at an all- time high of 4.029 billion bushels. The dynamic between tight US stocks and abundant global stocks will continue to create ex- port sale head winds, particularly if beneficial weather conditions are realized in South America. Currently, US export sales commitments are 11% behind the five-year average. The USDA projects US soybean exports at 1.755 million bushels, the lowest since the trade war with China. 

Corn

Ethanol production for the week ending October 6 was 1.004 million barrels per day, down 5,000 from the previous week. Ethanol stocks were 21.526 million barrels, down 358,000 barrels compared to last week. Corn net sales reported by exporters for September 29 to October 5 were net sales of 35.8 million bushels for the 2023/24 marketing year and 3.4 million bushels for the 2024/25 marketing year. Exports for the same period were up 33% compared to last week at 32 million bushels. Corn ex- port sales and commitments were 29% 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 38%. Across Tennessee, average corn basis (cash price-nearby futures price) strengthened or remained unchanged at West, Northwest, North-Central, West-Central, and Mississippi River elevators and barge points. Overall, basis for the week ranged from 90 under to even, with an average of 38 under the December futures at elevators and barge points. 

The Crop Progress report estimated corn condition at 53% good-to-excellent and 18% poor-to-very poor; corn mature at 89% compared to 82% last week, 85% last year, and a 5-year average of 85%; and corn harvested at 34% compared to 23% last week, 29% last year, and a 5-year average of 31%. In Tennessee, corn condition was estimated at 78% good-to-excellent and 5% poor-to-very poor; corn mature at 97% compared to 96% last week, 99% last year, and a 5-year average of 99%; and corn harvested at 71% compared to 58% last week, 79% last year, and a 5-year average of 76%. New crop cash prices ranged from $4.10 to $4.96 at elevators and barge points. December 2023 corn futures closed at $4.93, up 1 cent since last Friday. For the week December 2023 corn futures traded between $4.82 and $4.98. Dec/Mar and Dec/May future spreads were 15 and 23 cents. Downside price protection could be obtained by purchasing a $4.95 December 2023 Put Option costing 13 cents establishing a $4.82 futures floor. March 2024 corn futures closed at $5.08, up 1 cent since last Friday. May 2024 corn futures closed at $5.16, up 1 cent since last Friday. 

Soybeans

Across Tennessee average soybean basis strengthened or remained unchanged at Northwest, North-Central, West-Central, West, and Mississippi River elevators and barge points. Basis ranged from 85 to 15 under the November futures contract, with an average basis at the end of the week of 43 under. Soybean net weekly sales reported by exporters were net sales of 38.8 million bushels for the 2023/24 marketing year. Exports for the same period were up 114% compared to last week at 52.8 million bushels. Soybean export sales and commitments were 40% 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 51%. 

The Crop Progress report estimated soybean condition at 51% good-to-excellent and 18% poor-to-very poor; soybeans dropping leaves at 93% compared to 86% last week, 90% last year, and a 5-year average of 87%; and soybeans harvested at 43% compared to 23% last week, 41% last year, and a 5-year average of 37%. In Tennessee, the Crop Progress report estimated soybean condition at 80% good-to-excellent and 3% poor-to-very poor; soybeans dropping leaves at 83% compared to 73% last week, 84% last year, and a 5-year average of 81%; and soybeans harvested at 37% compared to 29% last week, 30% last year, and a 5-year average of 30%. November 2023 soybean futures closed at $12.80, up 14 cents since last Friday. For the week, November 2023 soybean futures traded between $12.50 and $12.99. New crop cash soybean prices at elevators and barge points ranged from $11.62 to $12.75. Downside price protection could be achieved by purchasing a $12.90 November 2023 Put Option which would cost 22 cents and set a $12.68 futures floor. Nov/Dec 2023 soybean-to-corn price ratio was 2.60 at the end of the week. Nov/Jan and Nov/Mar future spreads were 20 and 32 cents. March soybean-to-corn price ratio was 2.58 at the end of the week. January 2024 soybean futures closed at $13.00, up 16 cents since last Friday. March 2024 soybean futures closed at $13.12, up 13 cents since last Friday. 

Cotton

North Delta upland cotton spot price quotes for October 13 were 83.81 cents/lb (41-4-34) and 86.06 cents/lb (31-3-35). Adjusted world price (AWP) was down 1.3 cents at 71.06 cents. Cotton net weekly sales reported by exporters were 43,400 bales for the 2023/24 marketing year. Exports for the same period were down 30% compared to last week at 104,000 bales – a marketing year low. Upland cotton export sales were 50% 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 63%. 

The Crop Progress report estimated cotton condition at 32% good-to-excellent and 41% poor-to-very poor; cotton bolls opening at 82% compared to 75% last week, 83% last year, and a 5-year average of 82%; and cotton harvested at 25% compared to 18% last week, 28% last year, and a 5-year average of 24%. In Tennessee, the Crop Progress report estimated cotton condition at 81% good-to-excellent and 3% poor-to-very poor; cotton bolls opening at 85% compared to 77% last week, 78% last year, and a 5-year average of 85%; and cotton harvested at 15% compared to 5% last week, 12% last year, and a 5-year average of 18%. December 2023 cotton futures closed at 86.06 cents, down 1.08 cents since last Friday. For the week, December 2023 cotton futures traded between 84.14 and 88.76 cents. Downside price protection could be obtained by purchasing an 87 cent December 2023 Put Option costing 2.72 cents establishing an 84.28 cent futures floor. March 2024 cotton futures closed at 87.77 cents, down 0.42 cents since last Friday. May 2023 cotton futures closed at 88.88 cents, down 0.07 cents since last Friday. Dec/Mar and Dec/May cotton futures spreads were 1.71 cents and 2.82 cents. 

Wheat

Wheat net weekly sales reported by exporters were net sales of 24 million bushels for the 2023/24 marketing year – a marketing year high - and 0.01 million bushels for the 2024/25 marketing year. Exports for the same period were down 12% compared to last week at 12.6 million bushels. Wheat export sales were 53% 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 57%. Wheat cash prices at elevators and barge points ranged from $4.71 to $5.60. December 2023 wheat futures closed at $5.82, up 14 cents since last Friday. December 2023 wheat futures traded between $5.47 and $5.86 this week. December wheat-to-corn price ratio was 1.18. Dec/ Mar and Dec/Jul future spreads were 26 and 54 cents. March 2024 wheat futures closed at $6.08, up 10 cents since last Friday. 

The Crop Progress report estimated winter wheat planted at 57% compared to 40% last week, 53% last year, and a 5-year average of 57%; and winter wheat emerged at 29% compared to 15% last week, 24% last year, and a 5-year average of 30%. In Tennessee, winter wheat condition was estimated at 79% good-to-excellent and 6% poor-to-very poor; winter wheat planted was estimated at 16% compared to 9% last week, 19% last year, and a 5-year average of 19%; and winter wheat emerged at 4% compared to 1% last week, 7% last year, and a 5-year average of 8%. July 2024 wheat futures closed at $6.36, up 2 cents since last Friday. Downside price protection could be obtained by purchasing a $6.40 July 2024 Put Option costing 58 cents establishing a $5.82 futures floor. New crop wheat cash prices at elevators and barge points ranged from $5.95 to $6.12.  ∆