Corn Prices Have Increased From The August Low

DR. AARON SMITH

KNOXVILLE, TENNESSEE

On September 30 the USDA released the quarterly Grain Stocks report. The report indicated 29%, 12%, and 30% more corn, wheat, and soybeans were held in storage on September 1 compared to the previous year. Interestingly, the year-over-year percent change in corn and wheat stocks held on- versus off-farm was close to the same 29.1% for on-farm corn stocks, 29.7% for off-farm corn stocks, 11.0% for on-farm wheat stocks and 13.1% for off-farm wheat stocks. On-farm stocks for soybeans increased 54.4% compared to the off- farm stocks increase of 20.1%. Increased corn and soybean stocks at the start of this marketing year and high national average yields estimated at 183.1 bu/acre and 53.2 bu/acre have pushed futures prices 15-25% lower than last year and increased the likelihood that prices will continue to trade lower than the previous three years. 

Corn prices have increased from the August low of $3.85, closing this week at $4.24. Nearby futures prices are likely to continue to trade between $4.00 and $4.60 through the end of the year. Prices will be responsive to South American planting/crop progress and U.S. export sales. Holding corn unpriced in storage can be a risky endeavor. Establishing a futures market price or price floor using the March or May contract and waiting to fix basis at a later time is worth considering. 

Soybean futures pulled back this week due to improved forecasts for Brazil. Brazil’s soybean planting season runs from September through December with harvest occurring from January through May. USDA projects Brazil’s soybean production to be a record crop of 6.2 billion bushels, up 10% compared to last year. Soybean futures prices will be reactive to the South American production season. There is more risk in substantial movements in soybean prices than corn. A reasonable trading range for nearby soybean futures is $9.80 to $11.60.

Cotton prices continue to find limited price support. The lack of demand has been well documented. Projected losses, due to hurricanes and other weather events, will likely decrease U.S. production by 500,000+ bales. However, prices have yet to be able to consistently trade above 74 cents for the December contract. Deferred contracts have pushed into the upper 70 cent range, indicating an early 2025 push above 80 cents may materialize. 

Corn

Across Tennessee, average corn basis (cash price-nearby futures price) strengthened or remained unchanged at Northwest, West, West-Central, and North-Central elevators and barge points and weakened at Mississippi River elevators and barge points. Overall, basis for the week ranged from 40 under to 14 under, with an average of 29 under the December futures at elevators and barge points. Ethanol production for the week ending September 27 was 1.015 million barrels per day, up 21,000 from the previous week. Ethanol stocks were 23.459 million barrels, down 0.065 million barrels compared to last week. Corn net sales reported by exporters for September 20-26 were net sales of 66.3 million bushels for the 2024/25 marketing year. Exports for the same period were up 6% compared to last week at 46.1 million bushels. Corn export sales and commitments were 28% 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 33%. The Crop Progress report estimated corn condition at 64% good-to-excellent and 12% poor -to-very poor; corn dented at 96% compared to 92% last week, 97% last year, and a 5-year average of 95%; corn mature at 75% compared to 61% last week, 79% last year, and a 5-year average of 70%; and corn harvested at 21% compared to 14% last week, 21% last year, and a 5-year average of 18%. In Tennessee, corn condition was estimated at 42% good-to-excellent and 26% poor-to-very poor; corn dented at 100% compared to 99% last week, 99% last year, and a 5-year average of 100%; corn mature at 96% compared to 92% last week, 95% last year, and a 5-year average of 94%; and corn harvested at 70% compared to 58% last week, 55% last year, and a 5-year average of 56%. Cash prices ranged from $3.84 to $4.33 at elevators and barge points. December 2024 corn futures closed at $4.24, up 6 cents since last Friday. For the week, December 2024 corn futures traded between $4.15 and $4.34. Downside price protection could be obtained by purchasing a $4.25 December 2024 Put Option costing 10 cents establishing a $4.15 futures floor. 

Dec/Mar and Dec/Dec future spreads were 17 and 29 cents. March 2025 corn futures closed at $4.41, down 3 cents since last Friday. December 2025 corn futures closed at $4.53, up 1 cent 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 65 under to 15 under the November futures contract, with an average basis at the end of the week of 38 under. Soybean net weekly sales reported by exporters were net sales of 53.0 million bushels for the 2024/25 marketing year and 0.04 million bushels for the 2025/26 marketing year. Exports for the same period were up 40% compared to last week at 26.6 million bushels. Soybean export sales and commitments were 38% 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 47%. The Crop Progress report estimated soybean condition at 64% good-to-excellent and 11% poor-to- very poor; soybeans dropping leaves at 81% compared to 65% last week, 82% last year, and a 5-year average of 73%; and soy- beans harvested at 26% compared to 13% last week, 20% last year, and a 5-year average of 18%. In Tennessee, soybean condition was estimated at 42% good-to-excellent and 26% poor-to-very poor; soybeans dropping leaves at 78% compared to 70% last week, 70% last year, and a 5-year average of 64%; and soybeans harvested at 42% compared to 32% last week, 26% last year, and a 5-year average of 19%. Cash soybean prices at elevators and barge points ranged from $9.81 to $10.46. November 2024 soybean futures closed at $10.37, down 28 cents since last Friday. For the week, November 2024 soybean futures traded between $10.36 and $10.69. November/December 2024 soybean-to-corn price ratio was 2.45 at the end of the week. Down-side price protection could be achieved by purchasing a $10.60 November 2024 Put Option which would cost 32 cents and set a $10.28 futures floor. 

Nov/Jan and Nov/Nov future spreads were 19 and 43 cents. January 2025 soybean futures closed at $10.56, down 27 cents since last Friday. November 2025 soybean futures closed at $10.80, down 20 cents since last Friday. Nov/Dec 2025 soybean-to- corn price ratio was 2.38 at the end of the week. 

Cotton

North Delta upland cotton spot price quotes for October 3 were 66.23 cents/lb (41-4-34) and 68.23 cents/lb (31-3-35). Adjusted World Price (AWP) increased 0.25 cents to 60.81 cents. Cotton net weekly sales reported by exporters were net sales of 95,800 bales for the 2024/25 marketing year and 39,600 bales for the 2025/26 marketing year. Exports for the same period were up 35% compared to last week at 107,100 bales. Upland cotton export sales were 46% 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 58%. The Crop Progress report estimated cotton condition at 31% good-to-excellent and 37% poor-to-very poor; cotton bolls opening at 72% compared to 63% last week, 72% last year, and a 5-year average of 71%; and cotton harvested at 20% compared to 14% last week, 17% last year, and a 5-year average of 16%. In Tennessee, cotton condition was estimated at 45% good-to-excellent and 28% poor-to- very poor; cotton bolls opening at 85% compared to 78% last week, 74% last year, and a 5-year average of 67%; and cotton harvested at 10% compared to 3% last week, 4% last year, and a 5-year average of 5%. December 2024 cotton futures closed at 73.27 cents, up 0.55 cents since last Friday. For the week, December 2024 cotton futures traded between 71.86 and 74.00 cents. Downside price protection could be obtained by purchasing a 74 cent December 2024 Put Option costing 2.51 cents establishing a 71.49 cent futures floor. 

Dec/Mar and Dec/May cotton futures spreads were 2.01 cents and 3.25 cents. March 2025 cotton futures closed at 75.28 cents, up 0.76 cents since last Friday. May 2025 cotton futures closed at 76.52 cents, up 0.91 cents since last Friday. 

Wheat 

Wheat net weekly sales reported by exporters were net sales of 16.3 million bushels for the 2024/25 marketing year. Exports for the same period were down 25% compared to last week at 19.5 million bushels. Wheat export sales were 52% 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 56%. Wheat cash prices at elevators and barge points ranged from $5.19 to $5.61. December 2024 wheat futures closed at $5.89, up 9 cents since last Friday. The December wheat-to-corn price ratio was 1.39. December 2024 wheat futures traded between $5.75 and $6.17 this week. March 2025 wheat futures closed at $6.12, up 12 cents since last Friday. 

Dec/Mar and Dec/Jul future spreads were 23 and 43 cents. The Crop Progress report estimated winter wheat planted at 39% compared to 25% last week, 36% last year, and a 5-year average of 38%; and winter wheat emerged at 14% compared to 4% last week, 13% last year, and a 5-year average of 13%. In Tennessee winter wheat planted was estimated at 10% compared to 4% last week, 8% last year, and a 5-year average of 10%. July cash contracts at elevators and barge points ranged from $5.83 to $6.33. July 2025 wheat futures closed at $6.32, up 16 cents since last Friday. Downside price protection could be obtained by purchasing a $6.40 July 2025 Put Option costing 59 cents establishing a $5.81 futures floor.   ∆

DR. AARON SMITH: University of Tennessee