World Ending Stocks Are Projected To Be At An All-Time High

DR. AARON SMITH

KNOXVILLE, TENNESSEE

 This week the USDA released the July World Agricultural Supply and Demand Estimates (WASDE) report. The WASDE report provides monthly projections for U.S. and foreign production and consumption of selected agricultural commodities. The estimates are important; however futures markets will react to the published estimates primarily based on the pre-report expectations of traders. Overall, the report elicited a bearish response for soybean and wheat markets and neutral/ bullish response for cotton and corn futures markets. 

Corn planted acreage was increased 1.5 million, based on the June Acreage report, resulting in an increase in production of 240 million bushels. Revisions to previous marketing year data decreased beginning stocks for the 2024/25 marketing year by 145 million bushels compared to last month. Feed and residual use and exports were increased by 75 and 25 million bushels. The net result of the domestic adjustments was a decrease in projected ending stocks of 5 million bushels. Internationally, ending stocks were increased 39 million bushels to 10.172 billion bushels. 

U.S. soybean planted acres and production were reduced 400,000 acres and 15 million bushels. Projected U.S. ending stocks were revised down 20 million bushels to 435 million bushels. Only minor changes were made to the global supply and demand projections. World ending stocks are projected to be at an all-time high of 4.694 billion bushels. 

Cotton planted acres were increased 1 million. No changes were made to domestic consumption. U.S. ending stocks were in- creased 1.2 million bales to 5.3 million bales. Foreign stocks were revised lower to 77.33 million bales, 2.06 million bales lower than last month. Nothing in the report will provide an impetus for additional price advances. 

Wheat harvested acres were increased 800,000 acres and yield was increased 2.4 bu/acre resulting in an increase in U.S. pro- duction of 133 million bushels. Feed and exports were increased 10 million and 25 million bushels. The net result was a 98 million bushel increase to 856 million bushels. Foreign stocks were increased 84 million bushels to 8.595 billion bushels. 

Additional details and price reaction to the report for corn, soybeans, cotton, and wheat can be found at: https:// 

arec.tennessee.edu/extension/tennessee-market-highlights/monthly-crop-comments/. Corn 

Across Tennessee, average corn basis (cash price-nearby futures price) strengthened or remained unchanged at Northwest, West, West-Central, North-Central, and Mississippi River elevators and barge points. Overall, basis for the week ranged from 70 under to 15 over, with an average of 18 under the September futures at elevators and barge points. Ethanol production for the week ending July 5 was 1.054 million barrels per day, down 10,000 from the previous week. Ethanol stocks were 23.603 million barrels, up 0.009 million barrels compared to last week. Corn net sales reported by exporters for June 28-July 4 were net sales of 21.2 million bushels for the 2023/24 marketing year and 4.6 million bushels for the 2024/25 marketing year. Exports for the same period were down 2% compared to last week at 34.6 million bushels. Corn export sales and commitments were 99% 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 101%. September 2024 corn futures closed at $4.02, down 8 cents since last Friday. Sep/Dec and Sep/Mar future spreads were 12 and 26 cents. For the week September 2024 corn futures traded between $3.90 and $4.10. 

The Crop Progress report estimated corn condition at 68% good-to-excellent and 9% poor-to-very poor; corn silking at 24% compared to 22% last week, 28% last year, and a 5-year average of 24%; and corn dough or beyond at 3% compared to 2% last year and a 5-year average of 2%. In Tennessee, corn condition was estimated at 62% good-to-excellent and 15% poor-to-very poor; corn silking at 68% compared to 53% last week, 65% last year, and a 5-year average of 58%; and corn dough at 12% com- pared to 3% last week, 12% last year, and a 5-year average of 11%. New crop cash prices ranged from $3.27 to $3.93 at elevators and barge points. December 2024 corn futures closed at $4.14, down 10 cents since last Friday. Downside price protection could be obtained by purchasing a $4.20 December 2024 Put Option costing 23 cents establishing a $3.97 futures floor. March 2025 corn futures closed at $4.28, down 10 cents since last Friday. 

Soybeans

Across Tennessee the average soybean basis strengthened or remained unchanged at Northwest, West, North-Central, West- Central, and Mississippi River elevators and barge points. Basis ranged from 25 under to 15 over the August futures contract, with an average basis at the end of the week of 5 under. Soybean net weekly sales reported by exporters were net sales of 7.6 million bushels for the 2023/24 marketing year and 7.0 million bushels for the 2024/25 marketing year. Exports for the same period were down 12% compared to last week at 9.8 million bushels. Soybean export sales and commitments were 97% 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%. August 2024 soybean futures closed at $11.05, down 61 cents since last Friday. For the week August 2024 soybean futures traded between $11.02 and $11.62. September 2024 soybean-to-corn price ratio was 2.63 at the end of the week. Aug/Sep and Aug/Nov future spreads were -47 and -40 cents. September 2024 soybean futures closed at $10.58, down 68 cents since last Friday. 

The Crop Progress report estimated soybean condition at 68% good-to-excellent and 8% poor-to-very poor; soybeans blooming at 34% compared to 20% last week, 35% last year, and a 5-year average of 28%; and soybeans setting pods at 9% compared to 3% last week, 8% last year, and a 5-year average of 5%. In Tennessee, soybean condition was estimated at 65% good-to- excellent and 11% poor-to-very poor; soybeans emerged at 94% compared to 87% last week, 94% last year, and a 5-year average of 93%; soybean blooming at 53% compared to 41% last week, 50% last year, and a 5-year average of 30%; and soybeans setting pods at 20% compared to 5% last week, 17% last year, and a 5-year average of 7%. New crop cash soybean prices at elevators and barge points ranged from $10.17 to $10.92. November 2024 soybean futures closed at $10.65, down 64 cents since last Friday. Downside price protection could be achieved by purchasing a $10.80 November 2024 Put Option which would cost 46 cents and set a $10.34 futures floor. Nov/Dec soybean-to-corn price ratio was 2.57 at the end of the week. 

Cotton

North Delta upland cotton spot price quotes for July 12 were 63.42 cents/lb (41-4-34) and 65.42 cents/lb (31-3-35). Adjusted World Price (AWP) decreased 1.72 cents to 56.08 cents. Cotton net weekly sales reported by exporters were 54,100 bales for the 2023/24 marketing year and 69,500 bales for the 2024/25 marketing year. Exports for the same period were down 9% compared to last week at 160,700 bales. Upland cotton export sales were 117% 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 116%. 

The Crop Progress report estimated cotton condition at 45% good-to-excellent and 23% poor-to-very poor; cotton squaring at 52% compared to 43% last week, 51% last year, and a 5-year average of 50%; and cotton setting bolls at 19% compared to 11% last week, 15% last year, and a 5-year average of 15%. In Tennessee, cotton condition was estimated at 58% good-to-excellent and 18% poor-to-very poor; cotton squaring at 70% compared to 55% last week, 73% last year, and a 5-year average of 58%; and cotton setting bolls at 16% compared, 9% last week, 23% last year, and a 5-year average of 14%. December 2024 cotton futures closed at 71.27 cents, up 0.29 cents since last Friday. For the week December 2024 cotton futures traded between 70.21 and 71.96 cents. Dec/Mar and Dec/May cotton futures spreads were 1.83 cents and 3.2 cents. Downside price protection could be obtained by purchasing a 72 cent December 2024 Put Option costing 3.82 cents establishing a 68.18 cent futures floor. March 2025 cotton futures closed at 73.1 cents, up 0.39 cents since last Friday. May 2025 cotton futures closed at 74.47 cents, up 0.37 cents since last Friday. 

Wheat 

 Wheat net weekly sales reported by exporters were net sales of 8.8 million bushels for the 2024/25 marketing year. Exports for the same period were down 5% compared to last week at 10.8 million bushels. Wheat export sales were 33% 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 32%. The Crop Progress report estimated winter wheat harvested at 63% compared to 54% last week, 43% last year, and a 5 -year average of 52%; spring wheat condition at 75% good-to-excellent compared to 4% poor-to-very poor; and spring wheat headed at 59% compared to 38% last week, 66% last year, and a 5-year average of 60%. In Tennessee, winter wheat harvested was estimated at 98% compared to 93% last week and 93% last year. Wheat cash prices at elevators and barge points ranged from $4.79 to $5.42. September 2024 wheat futures closed at $5.50, down 40 cents since last Friday. September wheat-to- corn price ratio was 1.39. Sep/Mar and Sep/Jul future spreads were 47 and 66 cents. September 2024 wheat futures traded between $5.50 and $5.90 this week. 

March 2025 wheat futures closed at $5.97, down 35 cents since last Friday. July 2025 wheat futures closed at $6.16, down 28 cents since last Friday. Downside price protection could be obtained by purchasing a $6.20 July 2025 Put Option costing 59 cents establishing a $5.61 futures floor.  ∆

DR. AARON SMITH: University of Tennessee