Current Estimates Indicate A Very Challenging Winter

DR. AARON SMITH

KNOXVILLE, TENNESSEE

Current estimates indicate a very challenging winter for Tennessee corn, soybean, and cotton producers and rural economies. USDA is currently estimating Tennessee average corn, soybean, and cotton yields at 153 bu/acre, 46 bu/acre, and 1,114 lb/acre – 12%, 10%, and 11% lower than 2023 yields. Lower yields combined with lower prices indicate average gross revenue per acre is projected down 38% for corn at $607/acre, 31% for soybeans at $506/acre, and 21% for cotton at $818/acre. Average gross revenue will put many producers $100-$300 per acre below the estimated cost of production. This could impact producers’ ability to pay current debts and access financing for the 2025 crop. 

Crop insurance payments will provide some financial relief for those producers that had below APH yields, however those with at or above APH yields are unlikely to trigger crop insurance indemnity payments. For example, with APH yields and 75% coverage, the price trigger would be $3.50 for corn, $8.66 for soybeans, and $0.62 for cotton – lower than current futures market prices. For reference, the weighted average crop insurance buyup coverage (buyup coverage level weighted by insured acres) for revenue protection policies in Tennessee were 74%, 73% and 70% for corn, soybeans, and cotton in 2024. Bottom line is relief from crop insurance will be limited for many producers considering the size of the projected losses. 

The decline in crop revenue will also be felt by agricultural input suppliers and agricultural support industries. Based on current projected prices, yields, and harvested acres Tennessee cash receipts from corn, cotton and soybeans could be down by more than $780 million dollars compared to last year, from $2.30 billion to $1.52 billion. This would be a substantial hit to the economic activity of many rural communities in the state. 

Corn

Across Tennessee, average corn basis (cash price-nearby futures price) strengthened or remained unchanged at West, North- West, North-Central, and West-Central elevators and barge points and weakened at Mississippi River elevators and barge points. Overall, basis for the week ranged from 45 under to 20 under, with an average of 34 under the December futures at elevators and barge points. Ethanol production for the week ending September 13 was 1.049 million barrels per day, down 31,000 from the previous week. Ethanol stocks were 23.785 million barrels, up 0.071 million barrels compared to last week. Corn net sales reported by exporters for September 9-12 were net sales of 33.4 million bushels for the 2024/25 marketing year. Exports for the same period were down 31% compared to last week at 22.6 million bushels. Corn export sales and commitments were 24% 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 30%. The Crop Progress report estimated corn condition at 65% good-to-excellent and 12% poor-to-very poor; corn dented at 85% compared to 74% last week, 88% last year, and a 5-year average of 84%; corn mature at 45% compared to 29% last week, 48% last year, and a 5-year average of 38%; and corn harvested at 9% compared to 5% last week, 8% last year, and a 5-year average of 6%. In Tennessee, corn condition was estimated at 45% good-to-excellent and 23% poor-to-very poor; corn dented at 97% compared to 93% last week, 97% last year, and a 5-year average of 97%; corn mature at 85% compared to 76% last week, 75% last year, and a 5-year average of 72%; and corn harvested at 36% compared to 31% last week, 22% last year, and a 5-year average of 24%. Cash prices ranged from $3.65 to $4.05 at elevators and barge points. December 2024 corn futures closed at $4.01, down 12 cents since last Friday. For the week December 2024 corn futures traded between $4.01 and $4.15. Downside price protection could be obtained by purchasing a $4.05 December 2024 Put Option costing 13 cents establishing a $3.92 futures floor. 

Dec/Mar and Dec/Dec future spreads were 19 and 41 cents. March 2025 corn futures closed at $4.20, down 11 cents since last Friday. December 2025 corn futures closed at $4.42, down 6 cents since last Friday. 

Soybeans

Across Tennessee the average soybean basis weakened or remained unchanged at West and North-Central elevators and barge points and strengthened at Northwest, West-Central, and Mississippi River elevators and barge points. Basis ranged from 75 under to 20 under the November futures contract, with an average basis at the end of the week of 44 under. Soybean net weekly sales reported by exporters were net sales of 64.2 million bushels for the 2024/25 marketing year and 0.3 million bushels for the 2025/26 marketing year. Exports for the same period were down 4% compared to last week at 16.4 million bushels. Soybean export sales and commitments were 32% 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 42%. The Crop Progress report estimated soybean condition at 64% good-to-excellent and 11% poor-to-very poor; soybeans dropping leaves at 44% compared to 25% last week, 47% last year, and a 5-year average of 37%; and soybeans harvested at 6% compared to 4% last year and a 5-year average of 3%. In Tennessee, soybean condition was estimated at 45% good-to-excellent and 23% poor-to-very poor; soybeans dropping leaves at 58% compared to 46% last week, 41% last year, and a 5-year average of 35%; and soybeans harvested at 22% compared to 11% last week, 8% last year, and a 5-year average of 6. Cash soybean prices at elevators and barge points ranged from $9.29 to $9.89. November 2024 soybean futures closed at $10.12, up 6 cents since last Friday. For the week November 2024 soybean futures traded between $9.99 and $10.22. November/December 2024 soybean-to-corn price ratio was 2.40 at the end of the week. Downside price protection could be achieved by purchasing a $10.20 November 2024 Put Option which would cost 24 cents and set a $9.96 futures floor. 

Nov/Jan and Nov/Nov future spreads were 17 and 48 cents. January 2025 soybean futures closed at $10.29, up 5 cents since last Friday. November 2025 soybean futures closed at $10.60, up 2 cents since last Friday. Nov/Dec 2025 soybean-to-corn price ratio was 2.52 at the end of the week. 

Cotton

North Delta upland cotton spot price quotes for September 19 were 66.53 cents/lb (41-4-34) and 68.53 cents/lb (31-3-35). Adjusted World Price (AWP) increased 2.83 cents to 58.83 cents. Cotton net weekly sales reported by exporters were net sales of 106,800 bales for the 2024/25 marketing year and 10,600 bales for the 2025/26 marketing year. Exports for the same period were up 9% compared to last week at 130,000 bales. Upland cotton export sales were 44% 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 55%. The Crop Progress report estimated cotton condition at 39% good-to-excellent and 26% poor-to-very poor; cotton bolls opening at 54% compared to 45% last week, 52% last year, and a 5-year average of 50%; and cotton harvested at 10% compared to 8% last week, 9% last year, and a 5-year average of 8%. In Tennessee, cotton condition was estimated at 47% good-to-excellent and 26% poor -to-very poor; cotton bolls opening at 67% compared to 57% last week, 39% last year, and a 5-year average of 35%; and cotton harvested at 1% compared to 0% last week, 2% last year, and a 5-year average of 1%. December 2024 cotton futures closed at 73.52 cents, up 3.7 cents since last Friday. For the week December 2024 cotton futures traded between 69.58 and 74.23 cents. Downside price protection could be obtained by purchasing a 74 cent December 2024 Put Option costing 2.6 cents establishing a 71.4 cent futures floor. 

Dec/Mar and Dec/May cotton futures spreads were 1.62 cents and 2.64 cents. March 2025 cotton futures closed at 75.14 cents, up 3.9 cents since last Friday. May 2025 cotton futures closed at 76.16 cents, up 3.75 cents since last Friday. 

Wheat 

Wheat net weekly sales reported by exporters were net sales of 9.0 million bushels for the 2024/25 marketing year and 0.4 million bushels for the 2025/26 marketing year. Exports for the same period were up 18% compared to last week at 23.6 million bushels – a marketing year high. Wheat export sales were 49% 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 52%. Wheat cash prices at elevators and barge points ranged from $5.01 to $5.24. December 2024 wheat futures closed at $5.68, down 26 cents since last Friday. December wheat-to-corn price ratio was 1.42. December 2024 wheat futures traded between $5.64 and $5.96 this week. March 2025 wheat futures closed at $5.87, down 25 cents since last Friday. 

Dec/Mar and Dec/Jul future spreads were 19 and 35 cents. The Crop Progress report estimated winter wheat planted at 14% compared to 6% last week, 13% last year, and a 5-year average of 13%; and spring wheat harvested at 92% compared to 85% last week, 91% last year, and a 5-year average of 90%. July cash contracts ranged from $5.63 to $5.94. July 2025 wheat futures closed at $6.03, down 24 cents since last Friday. Downside price protection could be obtained by purchasing a $6.10 July 2025 Put Option costing 54 cents establishing a $5.56 futures floor.   ∆

DR. AARON SMITH: University of Tennessee