Soybean Prices Have Been In Free Fall Since October1

DR. AARON SMITH

KNOXVILLE, TENNESSEE

December corn futures are 30 cents off the recent highs, however basis has improved in several Tennessee location offsetting part of the futures price declines. Dramatically different yields across the state will influence local cash prices. Currently, USDA estimates average corn yield in Tennessee at 153 bushels per acre (20 bushels per acre lower than 2023), however there is tremendous variability across the state with higher yields in the Northwest portion of the state and lower yields in the Southeast. There is also tremendous variability field-to-field depending on timeliness of moisture and planting conditions. Tennessee is projected to harvest 230,000 fewer acres of corn compared to last year. Combined with the 20 bushel per acre decline in yield results in a decrease in state corn production of 53 million bushels. This dramatic change will facilitate more corn entering the state than in recent years as demand by livestock, poultry, ethanol, and industrial use increases year- over-year. 

Soybean prices have been in free fall since October1 st. The November soybean contract has closed down 12 of the past 15 trading days, declining over 90 cents. Key support remains near $9.60 with the current contract low of $9.55 established August 16. Rain in Brazil coupled with improved production forecasts have been a key factor in the price declines. Increased projected South American production will adversely affect US soybean export prospects, particularly to China as Brazil has become the dominate supplier for the Chinese soybean market. US soybean exports need a robust pace before the South American crop enters the world market in February/March. 

March cotton futures are 2 cents off recent highs, trading below 74 cents at the end of the week. Recent hurricanes have likely caused a loss of production of 500,000+ bales, however demand remains the primary issue for price improvements. Any rally towards 80 cents will need to be fueled by improved export demand in 2025. There continues to be a 2-cent spread between the nearby futures contract and the March contract. 

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. Overall, basis for the week ranged from 40 under to 15 over, with an average of 10 under the December futures at elevators and barge points. Ethanol production for the week ending October 11 was 1.042 million barrels per day, up 4,000 from the previous week. Ethanol stocks were 22.275 million barrels, up 0.121 million barrels compared to last week. Corn net sales reported by exporters for October 4-10 were net sales of 87.6 million bushels for the 2024/25 marketing year. Exports for the same period were down 53% compared to last week at 19.8 million bushels. Corn export sales and commitments were 34% 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 36%. The Crop Progress report estimated corn condition at 64% good-to-excellent and 12% poor-to-very poor; corn mature at 94% compared to 87% last week, 93% last year, and a 5-year average of 89%; and corn harvested at 47% compared to 30% last week, 42% last year, and a 5-year average of 39%. In Tennessee, corn condition was estimated at 46% good-to-excellent and 24% poor-to-very poor; corn mature at 99% compared to 98% last week, 98% last year, and a 5-year average of 99%; and corn harvested at 88% compared to 80% last week, 80% last year, and a 5-year average of 81%. Cash prices ranged from $3.61 to $4.22 at elevators and barge points. December 2024 corn futures closed at $4.04, down 11 cents since last Friday. For the week, December 2024 corn futures traded between $3.99 and $4.15. Downside price protection could be obtained by purchasing a $4.05 December 2024 Put Option costing 9 cents establishing a $3.96 futures floor. 

Dec/Mar and Dec/Dec future spreads were 15 and 31 cents. March 2025 corn futures closed at $4.19, down 14 cents since last Friday. December 2025 corn futures closed at $4.35, down 15 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 59 under to 30 over the November futures contract, with an average basis at the end of the week of 9 under. Soybean net weekly sales reported by exporters were net sales of 62.6 million bushels for the 2024/25 marketing year. Exports for the same period were up 9% compared to last week at 68.1 million bushels. Soybean export sales and commitments were 43% 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 53%. The Crop Progress report estimated soybeans dropping leaves at 95% compared to 90% last week, 96% last year, and a 5-year average of 92%; and soybeans harvested at 67% compared to 47% last week, 57% last year, and a 5-year average of 51%. In Tennessee, soybean condition was estimated at 42% good-to-excellent and 22% poor-to-very poor; soybeans dropping leaves at 91% compared to 83% last week, 89% last year, and a 5-year average of 87%; and soybeans harvested at 62% compared to 51% last week, 43% last year, and a 5-year average of 39%. Cash soybean prices at elevators and barge points ranged from $9.32 to $10.21. November 2024 soybean futures closed at $9.70, down 35 cents since last Friday. For the week, November 2024 soybean futures traded between $9.68 and $10.08. Nov/Dec 2024 soybean-to-corn price ratio was 2.40 at the end of the week. 

Nov/Jan and Nov/Nov future spreads were 12 and 50 cents. January 2025 soybean futures closed at $9.82, down 39 cents since last Friday. November 2025 soybean futures closed at $10.20, down 35 cents since last Friday. Downside price protection could be achieved by purchasing a $10.20 November 2025 Put Option which would cost 69 cents and set a $9.51 futures floor. Nov/ Dec 2025 soybean-to-corn price ratio was 2.34 at the end of the week. 

Cotton

North Delta upland cotton spot price quotes for October 18 were 65.75 cents/lb (41-4-34) and 67.76 cents/lb (31-3-35). Adjusted World Price (AWP) decreased 1.17 cents to 59.24 cents. Cotton net weekly sales reported by exporters were net sales of 159,800 bales for the 2024/25 marketing year. Exports for the same period were down 39% compared to last week at 57,800 bales. Upland cotton export sales were 49% 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 60%. The Crop Progress report estimated cotton condition at 34% good-to-excellent and 34% poor-to-very poor; cotton bolls opening at 88% compared to 82% last week, 86% last year, and a 5-year average of 86%; and cotton harvested at 34% compared to 26% last week, 31% last year, and a 5-year average of 30%. In Tennessee, cotton condition was estimated at 41% good-to-excellent and 28% poor-to-very poor; cotton bolls opening at 95% compared to 91% last week, 89% last year, and a 5-year average of 88%; and cotton harvested at 35% compared to 19% last week, 22% last year, and a 5-year average of 22%. December 2024 cotton futures closed at 70.99 cents, down 1.22 cents since last Friday. For the week, December 2024 cotton futures traded between 70.16 and 72.2 cents. Downside price protection could be obtained by purchasing a 71 cent December 2024 Put Option costing 1.38 cents establishing a 69.62 cent futures floor. 

Dec/Mar and Dec/May cotton futures spreads were 2.10 cents and 3.54 cents. March 2025 cotton futures closed at 73.09 cents, down 1.24 cents since last Friday. May 2025 cotton futures closed at 74.53 cents, down 1.18 cents since last Friday. 

Wheat 

Wheat net weekly sales reported by exporters were net sales of 18.5 million bushels for the 2024/25 marketing year. Exports for the same period were up 9% compared to last week at 14.4 million bushels. Wheat export sales were 56% 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 60%. Wheat cash prices at elevators and barge points ranged from $5.14 to $5.25. December 2024 wheat futures closed at $5.72, down 27 cents since last Friday. The December wheat-to-corn price ratio was 1.42. December 2024 wheat futures traded between $5.70 and $6.01 this week. March 2025 wheat futures closed at $5.92, down 29 cents since last Friday. 

Dec/Mar and Dec/Jul future spreads were 20 and 37 cents. The Crop Progress report estimated winter wheat planted at 64% compared to 51% last week, 65% last year, and a 5-year average of 66%; and winter wheat emerged at 35% compared to 25% last week, 36% last year, and a 5-year average of 38%. In Tennessee winter wheat planted was estimated at 31% compared to 20% last week, 23% last year, and a 5-year average of 26%; and winter wheat emerged at 11% compared to 2% last week, 8% last year, and a 5-year average of 11%. July cash contracts at elevators and barge points ranged from $5.24 to $6.05. July 2025 wheat futures closed at $6.09, down 30 cents since last Friday. Downside price protection could be obtained by purchasing a $6.10 July 2025 Put Option costing 53 cents establishing a $5.57 futures floor.    ∆

DR. AARON SMITH: University of Tennessee