Report Provides An Update To US And Global Supply And Demand Estimates

DR. AARON SMITH

KNOXVILLE, TENNESSEE

On September 12th the USDA released the September World Agricultural Supply and Demand Estimates (WASDE) report. The report provided an update to US and global supply and demand estimates. National average corn yield increased 0.5 bu/acre to 183.6 bu/acre. If realized the national average corn yield would be an all-time record. Domestic soybean estimates were mostly unchanged for the 2024/25 marketing year with a 10 million bushel decrease in US ending stocks more than offset by an increase in foreign ending stocks of 20 million bushels compared to last month. Year-over-year global soybean ending stocks are projected to increase 820 million bushels. National average cotton yield was estimated at 807 lb/acre, down 33 lb/acre compared to last month. US cotton exports were projected at 11.8 million bales, indicating that demand is likely to remain tepid into 2025. Without demand improve cotton prices will continue to trade below 75 cents. Global wheat stocks were projected to be at the lowest level since the 2015/16 marketing year, however US projected ending stocks are projected at the highest level since 2020/21. 

Overall, the report will not change the price direction for corn, soybeans, and cotton. Futures prices are likely to continue to trade in established ranges. Corn futures prices are likely to trade between $3.85 and $4.50, soybeans between $9.60 and $10.80, and cotton between 67 and 74 cents. 

Full details of the report for corn, soybeans, cotton, and wheat are available at: https://arec.tennessee.edu/extension/ tennessee-market-highlights/monthly-crop-comments/. 

In Tennessee the winter wheat crop insurance projected price determination period will end September 14. Currently, the projected price is $5.93/bu compared to last year’s projected price of $6.61/bu. The projected price is determined by the average daily close of the July wheat futures contract from August 15 to September 14. The projected price will partially (along with APH, coverage level, and policy type) determine the amount of initial protection provided by crop insurance for producers that choose to plant winter wheat this fall. 

Corn

Across Tennessee, average corn basis (cash price-nearby futures price) strengthened or remained unchanged at West, North- Central, and West-Central elevators and barge points and weakened at Mississippi River and Northwest elevators and barge points. Overall, basis for the week ranged from 55 under to 8 under, with an average of 36 under the December futures at elevators and barge points. Ethanol production for the week ending September 6 was 1.08 million barrels per day, up 19,000 from the previous week. Ethanol stocks were 23.714 million barrels, down 0.360 million barrels compared to last week. A total of 57.2 million bushels in sales were carried over from the 2023/2024 marketing year, which ended August 31. Accumulated exports were 2.134 billion bushels, up 38 percent from the prior year’s total of 1.55 billion bushels. Corn net sales reported by exporters for August 30-September 5 were net sales reductions of 26.2 million bushels for the 2024/25 marketing year. Exports for the same period were down 22% compared to last week at 32.5 million bushels. Corn export sales and commitments were 23% of the USDA estimated total annual exports for the 2024/25 marketing year (September 1 to August 31) compared to the previous 5-year average of 28%. The Crop Progress report estimated corn condition at 64% good-to-excellent and 12% poor-to- very poor; corn dough or beyond at 95% compared to 90% last week, 96% last year, and a 5-year average of 94%; corn dented at 74% compared to 60% last week, 78% last year, and a 5-year average of 73%; corn mature at 29% compared to 19% last week, 29% last year, and a 5-year average of 24%; and corn harvested at 5% compared to 4% last year and a 5-year average of 3%. In Tennessee, corn condition was estimated at 45% good-to-excellent and 22% poor-to-very poor; corn dough at 97% com- pared to 95% last week, 99% last year, and a 5-year average of 100%; corn dented at 93% compared to 88% last week, 95% last year, and a 5-year average of 93%; corn mature at 76% compared to 59% last week, 59% last year, and a 5-year average of 54%; and corn harvested at 31% compared to 16% last week, 10% last year, and a 5-year average of 11%. Cash prices ranged from $3.52 to $4.00 at elevators and barge points. December 2024 corn futures closed at $4.13, up 7 cents since last Friday. For the week December 2024 corn futures traded between $3.97 and $4.14. Downside price protection could be obtained by purchasing a $4.20 December 2024 Put Option costing 16 cents establishing a $4.04 futures floor. 

Dec/Mar and Dec/Dec future spreads were 18 and 35 cents. March 2025 corn futures closed at $4.31, up 7 cents since last Friday. December 2025 corn futures closed at $4.48, up 4 cents since last Friday. 

Soybeans

Across Tennessee the average soybean basis weakened or remained unchanged at West, West-Central, and Mississippi River elevators and barge points and strengthened at Northwest and North-Central elevators and barge points. Basis ranged from 79 under to 20 under the November futures contract, with an average basis at the end of the week of 43 under. A total of 35.0 million bushels in sales were carried over from the 2023/2024 marketing year, which ended August 31. Accumulated exports were 1.69 billion bushels, down 15 percent from the prior year’s total of 1.92 billion bushels. Soybean net weekly sales reported by exporters were net sales cancellations of 54.2 million bushels for the 2024/25 marketing year. Exports for the same period were down 6% compared to last week at 17.0 million bushels. Soybean export sales and commitments were 31% of the USDA estimated total annual exports for the 2024/25 marketing year (September 1 to August 31), compared to the previous 5- year average of 39%. The Crop Progress report estimated soybean condition at 65% good-to-excellent and 10% poor-to-very poor; soybeans setting pods at 97% compared to 94% last week, 97% last year, and a 5-year average of 96%; and soybeans dropping leaves at 25% compared to 13% last week, 27% last year, and a 5-year average of 21%. In Tennessee, soybean condition was estimated at 45% good-to-excellent and 24% poor-to-very poor; soybeans setting pods at 97% compared to 95% last week, 95% last year, and a 5-year average of 96%; soybeans dropping leaves at 46% compared to 29% last week, 25% last year, and a 5-year average of 23%; and soybeans harvested at 11% compared to 3% last week, 1% last year, and a 5-year average of 1%. Cash soybean prices at elevators and barge points ranged from $9.22 to $9.98. November 2024 soybean futures closed at $10.06, up 1 cent since last Friday. For the week November 2024 soybean futures traded between $9.95 and $10.21. November/December 2024 soybean-to-corn price ratio was 2.44 at the end of the week. Downside price protection could be achieved by purchasing a $10.10 November 2024 Put Option which would cost 26 cents and set a $9.84 futures floor. 

Nov/Jan and Nov/Nov future spreads were 18 and 52 cents. January 2025 soybean futures closed at $10.24, up 2 cents since last Friday. November 2025 soybean futures closed at $10.58, up 8 cents since last Friday. Nov/Dec 2025 soybean-to-corn price ratio was 2.36 at the end of the week. 

Cotton

North Delta upland cotton spot price quotes for September 12 were 65.55 cents/lb (41-4-34) and 67.55 cents/lb (31-3-35). Adjusted World Price (AWP) decreased 1.27 cents to 56 cents. Cotton net weekly sales reported by exporters were net sales of 116,100 bales for the 2024/25 marketing year. Exports for the same period were down 27% compared to last week at 119,100 bales. Upland cotton export sales were 42% of the USDA estimated total annual exports for the 2024/25 marketing year (August 1 to July 31), compared to the previous 5-year average of 53%. The Crop Progress report estimated cotton condition at 40% good-to-excellent and 28% poor-to-very poor; cotton bolls opening at 45% compared to 37% last week, 40% last year, and a 5-year average of 40%; and cotton harvested at 8% compared to 7% last year and a 5-year average of 6%. In Tennessee, cotton condition was estimated at 44% good-to-excellent and 27% poor-to-very poor; and cotton bolls opening at 57% compared to 37% last week, 27% last year, and a 5-year average of 22%. December 2024 cotton futures closed at 69.82 cents, up 1.94 cents since last Friday. For the week December 2024 cotton futures traded between 67.51 and 70.85 cents. Downside price protection could be obtained by purchasing a 70 cent December 2024 Put Option costing 2.2 cents establishing a 67.8 cent futures floor. 

Dec/Mar and Dec/May cotton futures spreads were 1.42 cents and 2.59 cents. March 2025 cotton futures closed at 71.24 cents, up 1.55 cents since last Friday. May 2025 cotton futures closed at 72.41 cents, up 1.39 cents since last Friday. 

Wheat 

Wheat net weekly sales reported by exporters were net sales of 17.4 million bushels for the 2024/25 marketing year and net sales reductions of 0.007 million bushels for the 2025/26 marketing year. Exports for the same period were down 15% compared to last week at 19.9 million bushels. Wheat export sales were 48% 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 51%. Wheat cash prices at elevators and barge points ranged from $5.03 to $5.25. December 2024 wheat futures closed at $5.94, up 27 cents since last Friday. December wheat-to-corn price ratio was 1.44. December 2024 wheat futures traded between $5.60 and $5.98 this week. March 2025 wheat futures closed at $6.12, up 26 cents since last Friday. 

Dec/Mar and Dec/Jul future spreads were 18 and 33 cents. The Crop Progress report estimated winter wheat planted at 6% compared to 2% last week, 5% last year, and a 5-year average of 6%; and spring wheat harvested at 85% compared to 70% last week, 83% last year, and a 5-year average of 83%. July cash contracts ranged from $5.65 to $5.95. July 2025 wheat futures closed at $6.27, up 24 cents since last Friday. Downside price protection could be obtained by purchasing a $6.30 July 2025 Put Option costing 55 cents establishing a $5.75 futures floor.   ∆

DR. AARON SMITH: University of Tennessee