Crop Conditions Improved For The U.S. Winter Wheat Crop

DR. AARON SMITH

KNOXVILLE, TENNESSEE

This week the 2025 November / December soybean-to-corn futures price ratio reached a new low for the year. On November 21st, the ratio was 2.30. The average since January 1, 2024, was 2.38, which is lower than the long-term average. A soybean-to-corn price ratio above 2.5 favors additional soybean acres planted and a ratio below 2.4 favors additional corn acres planted. So, as of November 2024, there is a clear market signal that more corn acres planted are desired than soybeans in 2025. The two primary reasons the corn-to-soybean ratio has moved in favor of corn are changes to U.S. and domestic stocks compared to the previous marketing year. Year-over-year, U.S. corn stocks are projected to increase 8.9%, compared to a 23.3% increase for soybean stocks. The projected change in foreign stocks is even more dramatic. Foreign corn stocks are projected to decline 5.7% compared to the last marketing year, while foreign soybean stocks are projected to increase 13.2%. Projections can change, and it is very early in the 2025 planning process, however, there is a clear market signal that corn acres are favored over soybeans in 2025 at this point in time. 

It was a good week for cotton futures. The March contract had daily price increases of +0.11, +0.23, +1.03, +0.15, and +0.34 cents, closing the week at 70.77 cents. Prices in the low 70s are unlikely to stimulate producer sales, however having prices outside of the upper 60s is a positive. Export sales this week were 318,500 bales, a marketing year high. Vietnam and Pakistan were the two largest purchasers, and five countries purchased more than 20,000 bales on the week. Continued strong export sales will help solidify the bottom of the cotton market and provide a potential path forward for higher prices. 

July wheat futures pulled back this week as crop conditions improved for the U.S. winter wheat crop. Last week 43% of the winter wheat crop in the U.S. was estimated to be in drought. This week 40% was estimated to be in drought. One month ago, 62% of the winter wheat crop was in drought with 28% in severe drought and 8% in extreme drought. Severe and extreme drought has decreased to 7% and 1% of winter wheat production. 

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 25 under to 32 over, with an average of 8 over the December futures at elevators and barge points. Ethanol production for the week ending November 15 was 1.110 million barrels per day, down 3,000 from the previous week. Ethanol stocks were 22.563 million barrels, up 0.524 million barrels compared to last week. Corn net sales reported by exporters for November 8-14 were net sales of 58.8 million bushels for the 2024/25 marketing year. Exports for the same period were up 37% compared to last week at 37.7 million bushels. Corn export sales and commitments were 53% 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 46%. Cash prices ranged from $4.01 to $4.68 at elevators and barge points. December 2024 corn futures closed at $4.25, up 1 cent since last Friday. For the week, December 2024 corn futures traded between $4.22 and $4.32. 

Dec/Mar and Dec/Dec future spreads were 10 and 11 cents. March 2025 corn futures closed at $4.35, unchanged since last Friday. December 2025 corn futures closed at $4.36, down 4 cents since last Friday. Downside price protection could be obtained by purchasing a $4.40 December 2025 Put Option costing 38 cents establishing a $4.02 futures floor. 

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 33 under to 32 over the January futures contract, with an average basis at the end of the week of 12 over. Soybean net weekly sales reported by exporters were net sales of 68.4 million bushels for the 2024/25 marketing year. Exports for the same period were up 5% compared to last week at 90.0 million bushels – a marketing year high. Soybean export sales and commitments were 64% 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 67%. In Tennessee the crop progress report estimated soybeans harvested at 92% compared to 89% last week, 91% last year, and a 5-year average of 86%. Cash soybean prices at elevators and barge points ranged from $9.51 to $10.38. January 2025 soybean futures closed at $9.83, down 15 cents since last Friday. For the week, January 2025 soybean futures traded between $9.75 and $10.12. Jan/Dec soybean-to-corn price ratio was 2.31 at the end of the week. 

Jan/Mar and Jan/Nov future spreads were 9 and 25 cents. March 2025 soybean futures closed at $9.92, down 16 cents since last Friday. November 2025 soybean futures closed at $10.08, down 12 cents since last Friday. Downside price protection could be achieved by purchasing a $10.20 November 2025 Put Option which would cost 76 cents and set a $9.44 futures floor. Nov/ Dec 2025 soybean-to-corn price ratio was 2.31 at the end of the week. 

Cotton

North Delta upland cotton spot price quotes for November 21 were 64.43 cents/lb (41-4-34) and 68.43 cents/lb (31-3-35). Adjusted World Price (AWP) decreased 2.29 cents to 55.91 cents. Cotton net weekly sales reported by exporters were net sales of 318,500 bales for the 2024/25 marketing year – a marketing year high - and 16,000 bales for the 2025/26 marketing year. Exports for the same period were up 32% compared to last week at 148,200 bales. Upland cotton export sales were 60% 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 68%. The Crop Progress report estimated cotton harvested at 77% compared to 71% last week, 74% last year, and a 5-year average of 72%. In Tennessee, cotton harvested was estimated at 89% compared to 85% last week, 92% last year, and a 5-year average of 83%. December 2024 cotton futures closed at 71.65 cents, up 4.85 cents since last Friday. For the week, December 2024 cotton futures traded between 66 and 71.45 cents. 

Dec/Mar and Dec/Dec cotton futures spreads were -0.88 cents and 0.06 cents. March 2025 cotton futures closed at 70.77 cents, up 1.86 cents since last Friday. December 2025 cotton futures closed at 71.71 cents, up 1.15 cents since last Friday. Downside price protection could be obtained by purchasing a 72 cent December 2024 Put Option costing 4.51 cents establishing a 67.49 cent futures floor. 

Wheat

Wheat net weekly sales reported by exporters were net sales of 20.2 million bushels for the 2024/25 marketing year. Exports for the same period were down 56% compared to last week at 4.9 million bushels – a marketing year low. Wheat export sales were 67% 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 69%. Wheat cash prices at elevators and barge points ranged from $5.12 to $5.28. December 2024 wheat futures closed at $5.44, up 8 cents since last Friday. The December wheat-to-corn price ratio was 1.28. December 2024 wheat futures traded between $5.36 and $5.58 this week. March 2025 wheat futures closed at $5.64, up10 cents since last Friday. 

Dec/Mar and Dec/Jul future spreads were 20 and 38 cents. The Crop Progress report estimated winter wheat condition at 49% good-to-excellent and 15% poor-to-very poor, winter wheat planted at 94% compared to 91% last week, 94% last year, and a 5 -year average of 96%; and winter wheat emerged at 84% compared to 76% last week, 85% last year, and a 5-year average of 84%. In Tennessee winter wheat condition was estimated at 72% good-to-excellent and 9% poor-to-very poor, winter wheat planted at 86% compared to 80% last week, 84% last year, and a 5-year average of 85%; and winter wheat emerged at 69% compared to 59% last week, 61% last year, and a 5-year average of 66%. July cash contracts at elevators and barge points ranged from $5.44 to $5.68. July 2025 wheat futures closed at $5.82, up 12 cents since last Friday. Downside price protection could be obtained by purchasing a $5.90 July 2025 Put Option costing 55 cents establishing a $5.35 futures floor.   ∆

DR. AARON SMITH: University of Tennessee