Nationally, Principal Acres Planted Were Estimated At 315.177 Million Acres

DR. AARON SMITH

KNOXVILLE, TENNESSEE

On Friday June 28th the USDA released its annual Acreage report. The Report estimates planted acreage of principal crops based on producer surveys conducted in the first two weeks of June. Nationally, principal acres planted were estimated at 315.177 million acres up 1.866 compared to the March Prospective Plantings report and 4.424 million acres lower than last year. The Report indicated corn acres planted at 91.475 million, upland cotton acres at 11.488 million, soybean acres at 86.1 million, and wheat acres at 47.24 million. Overall, corn acres were higher than most predictions and 1.4 million greater than the March Prospective Plantings report. Corn futures prices declined 13 to 16 1⁄2 cents for the day. Soybean acres were slightly lower than pre-report estimates and 410,000 acres lower than the March estimate. Soybean futures closed down 3⁄4 to 2 3⁄4 cents for the day. Cotton acres were nearly 1 million acres higher than the March estimate and pre-report estimates. Cotton futures closed 1.63 to 2.21 cents per pound down for the day. All wheat acres were down 258,000 acres compared to the March estimate. Chicago wheat futures were down 4 1⁄2 to 6 1⁄4 cents for the day. Nationally, the report indicated that corn left to be planted was 3.36 million acres and soybeans 12.8 million acres. Overall, the report provided bearish news for markets that had already experienced substantial declines this growing season. Moving forward prices will continue to react to weather and future acreage revisions. 

In Tennessee, planted acres were estimated at 850,000 acres of corn, 1.7 million acres of soybeans, 300,000 acres of cotton, and 380,000 acres of wheat. Corn acres planted were down 10%, soybean acres were up 6% and cotton was unchanged compared to the March Prospective Plantings report. Challenges with planting corn earlier this spring contributed to 80,000 acres of corn not being planted. No change in cotton acres planted was a major surprise and will likely be revised in future USDA estimates. 

Another report released Friday was the Quarterly Grain Stocks report. Compared to last year corn stocks were up 22%, soybean stocks up 22%, and wheat stocks up 23%. Current USDA projections for the next marketing year, indicate the potential for stocks to continue to build based on June production projections. 

 Corn 

Across Tennessee, average corn basis (cash price-nearby futures price) strengthened or remained unchanged at West, West- Central, North-Central, and Mississippi River elevators and barge points and weakened at Northwest elevators and barge points. Overall, basis for the week ranged from 70 under to 6 under, with an average of 33 under the July futures at elevators and barge points. Ethanol production for the week ending June 21 was 1.043 million barrels per day, down 14,000 from the previous week. Ethanol stocks were 23.423 million barrels, down 0.194 million barrels compared to last week. Corn net sales reported by exporters for June 14-20 were net sales of 21.3 million bushels for the 2023/24 marketing year and 5.5 million bushels for the 2024/25 marketing year. Exports for the same period were down 21% compared to last week at 46.3 million bushels. Corn export sales and commitments were 98% 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 100%. July 2024 corn futures closed at $3.97, down 38 cents since last Friday. Jul/Sep and July/Dec future spreads were 10 and 23 cents. For the week July 2024 corn futures traded between $3.90 and $4.36. 

The Crop Progress report estimated corn condition at 69% good-to-excellent and 7% poor-to-very poor; corn emerged at 97% compared to 93% last week, 98% last year, and a 5-year average of 96%; and corn silking at 4% compared to 3% last year and a 5-year average of 3%. In Tennessee, corn condition was estimated at 69% good-to-excellent and 10% poor-to-very poor; corn emerged at 97% compared to 95% last week, 100% last year, and a 5-year average of 99%; and corn silking at 34% compared to 14% last week, 14% last year, and a 5-year average of 17%. September 2024 corn futures closed at $4.07, down 33 cents since last Friday. New crop cash prices ranged from $3.53 to $4.25 at elevators and barge points. December 2024 corn futures closed at $4.20, down 33 cents since last Friday. Downside price protection could be obtained by purchasing a $4.30 December 2024 Put Option costing 29 cents establishing a $4.01 futures floor. 

Soybeans

Across Tennessee the average soybean basis strengthened or remained unchanged at West, West-Central, North-Central, and Mississippi River elevators and barge points and weakened at Northwest elevators and barge points. Basis ranged from 40 under to 4 over the July futures contract, with an average basis at the end of the week of 18 under. Soybean net weekly sales re- ported by exporters were net sales of 10.4 million bushels for the 2023/24 marketing year and 3.7 million bushels for the 2024/25 marketing year. Exports for the same period were up 15% compared to last week at 14.4 million bushels. Soybean ex- port sales and commitments were 96% 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 102%. July 2024 soybean futures closed at $11.50, down 10 cents since last Friday. For the week July 2024 soybean futures traded between $11.46 and $11.80. July 2024 soybean-to-corn price ratio was 2.90 at the end of the week. Jul/Aug and Jul/Nov future spreads were -17 and -46 cents. August 2024 soybean futures closed at $11.33, down 14 cents since last Friday. 

The Crop Progress report estimated soybean condition at 67% good-to-excellent and 8% poor-to-very poor; soybeans planted at 97% compared to 93% last week, 99% last year, and a 5-year average of 95%; soybeans emerged at 90% compared to 82% last week, 95% last year, and a 5-year average of 87%; and soybeans blooming at 8% compared to 8% last year and a 5-year average of 6%. In Tennessee, soybean condition was estimated at 72% good-to-excellent and 7% poor-to-very poor; soybean planting at 90% compared to 83% last week, 91% last year, and a 5-year average of 89%; soybeans emerged at 78% compared to 69% last week, 81% last year, and a 5-year average of 79%; and soybean blooming at 27% compared to 17% last week, 20% last year, and a 5-year average of 8%. New crop cash soybean prices at elevators and barge points ranged from $10.55 to $11.21. November 2024 soybean futures closed at $11.04, down 16 cents since last Friday. Downside price protection could be achieved by purchasing an $11.20 November 2024 Put Option which would cost 53 cents and set a $10.67 futures floor. Nov/ Dec soybean-to-corn price ratio was 2.63 at the end of the week. 

Cotton

North Delta upland cotton spot price quotes for June 27 were 67.91 cents/lb (41-4-34) and 69.91 cents/lb (31-3-35). Adjusted World Price (AWP) increased 1.58 cents to 58.23 cents. Cotton net weekly sales reported by exporters were 90,600 bales for the 2023/24 marketing year and 67,600 bales for the 2024/25 marketing year. Exports for the same period were down 29% compared to last week at 141,000 bales. Upland cotton export sales were 116% 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 115%. July 2024 cotton futures closed at 69.81 cents, down 1.62 cents since last Friday. For the week July 2024 cotton futures traded between 67.9 and 73.69 cents. Jul/Dec and Jul/Mar cotton futures spreads were 2.88 cents and 4.55 cents. 

The Crop Progress report estimated cotton condition at 56% good-to-excellent and 14% poor-to-very poor, cotton planted at 94% compared to 90% last week, 93% last year, and a 5-year average of 96%; cotton squaring at 30% compared to 22% last week, 25% last year, and a 5-year average of 28%; and cotton setting bolls at 8% compared to 6% last week, 4% last year, and a 5-year average of 5%. In Tennessee, cotton condition was estimated at 57% good-to-excellent and 12% poor-to-very poor; cotton planting was estimated at 99% compared to 96% last week, 100% last year, and a 5-year average of 99%; cotton squaring at 40% compared to 27% last week, 30% last year, and a 5-year average of 29%; and cotton setting bolls at 2% compared, 0% last week, 5% last year, and a 5-year average of 2%. December 2024 cotton futures closed at 72.69 cents, up 0.48 cents since last Friday. Downside price protection could be obtained by purchasing a 73 cent December 2024 Put Option costing 4.1 cents establishing a 68.9 cent futures floor. March 2025 cotton futures closed at 74.36 cents, up 0.76 cents since last Friday. 

Wheat 

Wheat net weekly sales reported by exporters were net sales of 24.5 million bushels for the 2024/25 marketing year. Exports for the same period were down 11% compared to last week at 11.9 million bushels. Wheat export sales were 28% of the USDA estimated total annual exports for the 2024/25 marketing year (June 1 to May 31), compared to the previous 5-year average of 29%. The Crop Progress report estimated winter wheat condition at 52% good-to-excellent and 15% poor-to-very poor; winter wheat headed at 97% compared to 94% last week, 96% last year, and a 5-year average of 95%; winter wheat harvested at 40% compared to 27% last week, 21% last year, and a 5-year average of 25%; spring wheat condition at 71% good-to-excellent compared to 4% poor-to-very poor; and spring wheat headed at 18% compared to 4% last week, 25% last year, and a 5-year average of 18%. In Tennessee, winter wheat harvested was estimated at 78% compared to 57% last week, 65% last year, and a 5-year average of 69%. July 2024 wheat futures closed at $5.53, down 8 cents since last Friday. July wheat-to-corn price ratio was 1.39. Jul/Sep and Jul/Jul future spreads were 20 and 75 cents. July 2024 wheat futures traded between $5.38 and $5.65 this week. Wheat cash prices at elevators and barge points ranged from $4.78 to $5.45. 

September 2024 wheat futures closed at $5.73, down 2 cents since last Friday. July 2025 wheat futures closed at $6.28, down 3 cents since last Friday. Downside price protection could be obtained by purchasing a $6.30 July 2025 Put Option costing 60 cents establishing a $5.70 futures floor.  ∆

DR. AARON SMITH: University of Tennessee