Over The Last Five Marketing Years, Total US Cotton Use Has Fallen Each Year

DR. AARON SMITH

KNOXVILLE, TENNESSEE

After trading up for four consecutive days, December corn futures closed down 6 1⁄4 cents on Friday. Prices were pushed higher this week due to strong export sales. Over the past two weeks, export sales have been 230 million bushels, 10% of USDA’s projected 2024/25 marketing year total. December futures prices closed the week at $4.15, near the middle of the current trading range of $4.00 to $4.35. Prices are likely to continue to move mostly sideways with mild seasonal increases as harvest comes to a close. 

November soybeans briefly traded above $10 before closing the week at $9.97. South American production continues to weigh heavily on the supply side. Argentina and Brazil are projected to produce 1.874 and 6.21 billion bushels of soybeans this year which would account for 51% of the world total. How the growing season progresses in South America will be a key factor in determining prices for US farmers. Futures prices are likely to trade between $9.70 and $10.40 until more is known about the South American growing season. 

Over the last five marketing years, total US cotton use has fallen each year, 18.75 million bales in 2020/21, 17.03 million bales in 2021/22, 14.5 million bales in 2022/23, 13.6 million bales in 2023/2024, and 13.3 million bales projected for 2024/25. The lack of global demand for US cotton will continue to keep prices low in spite of a shrinking US cotton crop. 

July wheat futures have held above $6.00 since early September. 58% of the US winter wheat crop is currently in some stage of drought and global wheat stocks are projected down for the fourth consecutive year. Prices are likely to continue to trade between $5.80 and $6.60. 

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 40 under to 25 over, with an average of 1 under the December futures at elevators and barge points. Ethanol production for the week ending October 18 was 1.081 million barrels per day, up 39,000 from the previous week. Ethanol stocks were 22.223 million barrels, up 0.052 million barrels compared to last week. Corn net sales reported by exporters for October 11-17 were net sales of 141.8 million bushels for the 2024/25 marketing year and 22.9 million bushels for the 2025/26 marketing year. Exports for the same period were up 99% compared to last week at 39.3 million bushels. Corn export sales and commitments were 40% 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 38%. The Crop Progress report estimated corn mature at 98% compared to 94% last week, 97% last year, and a 5-year average of 95%; and corn harvested at 65% compared to 47% last week, 55% last year, and a 5-year average of 52%. In Tennessee, corn harvested was estimated at 94% compared to 88% last week, 87% last year, and a 5-year average of 88%. Cash prices ranged from $3.69 to $4.47 at elevators and barge points. December 2024 corn futures closed at $4.15, up 11 cents since last Friday. For the week, December 2024 corn futures traded between $4.03 and $4.24. Downside price protection could be obtained by purchasing a $4.20 December 2024 Put Option costing 10 cents establishing a $4.10 futures floor. 

Dec/Mar and Dec/Dec future spreads were 14 and 25 cents. March 2025 corn futures closed at $4.29, up 10 cents since last Friday. December 2025 corn futures closed at $4.40, up 5 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 48 under to 42 over the November futures contract, with an average basis at the end of the week of 10 over. Soybean net weekly sales reported by exporters were net sales of 79.1 million bushels for the 2024/25 marketing year. Exports for the same period were up 32% compared to last week at 89.9 million bushels. Soybean export sales and commitments were 48% 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 56%. The Crop Progress report estimated soybeans harvested at 81% compared to 67% last week, 72% last year, and a 5-year average of 67%. In Tennessee, soybean dropping leaves were estimated at 96% compared to 91% last week, 94% last year, and a 5-year average of 95%; and soybeans harvested at 69% compared to 62% last week, 56% last year, and a 5-year average of 51%. Cash soybean prices at elevators and barge points ranged from $9.33 to $10.40. November 2024 soybean futures closed at $9.87, up 17 cents since last Friday. For the week, November 2024 soybean futures traded between $9.69 and $10.18. Nov/Dec 2024 soybean-to-corn price ratio was 2.38 at the end of the week. 

Nov/Jan and Nov/Nov future spreads were 10 and 45 cents. January 2025 soybean futures closed at $9.97, up 15 cents since last Friday. November 2025 soybean futures closed at $10.32, up 12 cents since last Friday. Downside price protection could be achieved by purchasing a $10.40 November 2025 Put Option which would cost 77 cents and set a $9.63 futures floor. Nov/Dec 2025 soybean-to-corn price ratio was 2.35 at the end of the week. 

Cotton

North Delta upland cotton spot price quotes for October 24 were 66.53 cents/lb (41-4-34) and 68.53 cents/lb (31-3-35). Adjust- ed World Price (AWP) increased 0.04 cents to 59.28 cents. Cotton net weekly sales reported by exporters were net sales of 169,700 bales for the 2024/25 marketing year. Exports for the same period were up 70% compared to last week at 98,400 bales. Upland cotton export sales were 51% 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 62%. The Crop Progress report estimated cotton condition at 37% good-to-excellent and 33% poor-to-very poor; cotton bolls opening at 94% compared to 88% last week, 89% last year, and a 5-year average of 91%; and cotton harvested at 44% compared to 34% last week, 39% last year, and a 5-year average of 38%. In Tennessee, cotton condition was estimated at 40% good-to-excellent and 30% poor-to-very poor; cotton bolls opening at 97% compared to 95% last week, 95% last year, and a 5-year average of 94%; and cotton harvested at 53% compared to 35% last week, 38% last year, and a 5-year average of 38%. December 2024 cotton futures closed at 70.66 cents, down 0.33 cents since last Friday. For the week, December 2024 cotton futures traded between 70.61 and 72.75 cents. Downside price protection could be obtained by purchasing a 71 cent December 2024 Put Option costing 0.96 cents establishing a 70.04 cent futures floor. 

Dec/Mar and Dec/May cotton futures spreads were 2.19 cents and 3.73 cents. March 2025 cotton futures closed at 72.85 cents, down 0.24 cents since last Friday. May 2025 cotton futures closed at 74.39 cents, down 0.14 cents since last Friday. 

Wheat

Wheat net weekly sales reported by exporters were net sales of 19.6 million bushels for the 2024/25 marketing year. Exports for the same period were down 30% compared to last week at 10.2 million bushels. Wheat export sales were 59% 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 62%. Wheat cash prices at elevators and barge points ranged from $5.07 to $5.27. December 2024 wheat futures closed at $5.69, down 3 cents since last Friday. The December wheat-to-corn price ratio was 1.37. December 2024 wheat futures traded between $5.65 and $5.85 this week. March 2025 wheat futures closed at $5.89, down 3 cents since last Friday. 

Dec/Mar and Dec/Jul future spreads were 20 and 36 cents. The Crop Progress report estimated winter wheat planted at 73% compared to 64% last week, 75% last year, and a 5-year average of 76%; and winter wheat emerged at 46% compared to 35% last week, 49% last year, and a 5-year average of 50%. In Tennessee winter wheat planted was estimated at 42% compared to 31% last week, 32% last year, and a 5-year average of 39%; and winter wheat emerged at 20% compared to 11% last week, 12% last year, and a 5-year average of 18%. July cash contracts at elevators and barge points ranged from $5.72 to $5.94. July 2025 wheat futures closed at $6.05, down 4 cents since last Friday. Downside price protection could be obtained by purchasing a $6.10 July 2025 Put Option costing 55 cents establishing a $5.55 futures floor.   ∆

DR. AARON SMITH: University of Tennessee