The Short Thanksgiving Trade Week Saw Wheat Futures Decline Double Digits

DR. AARON SMITH

KNOXVILLE, TENNESSEE

Corn futures continue to trade mostly sideways with the March contract, trading consistently between $4.20 to $4.50. Export sales continue to provide support for prices despite record US average yield estimates. Tennessee producers have seen basis bids improve substantially compared to a month ago. This highlights the need to manage futures price risk and basis price risk separately over time to maximize cash prices received by farmers. 

January soybean futures continue to hug the bottom end of the trading range of $9.80 to $10.20. Production projections out of South America have a wide range with USDA’s current estimates for Argentina and Brazil estimated at 1.9 billion bushels and 6.2 billion bushels. If realized soybean futures prices are likely to remain below $10.50. From now until February, US soybean export sales will dictate projected carryover into the 2025 crop production year. 

Cotton futures have increased over 6 cents over the past two weeks. Export sales have been the primary catalyst with back-to- back weekly marketing year highs in export sales. Weekly sales over 300,000 bales will assist in pulling futures prices into the mid-70 cent range. 

The short Thanksgiving trade week saw wheat futures decline double digits primarily due to improved drought conditions across the winter wheat producing areas in the US. Winter wheat in drought was estimated at 28% compared to 40% last week and 38% last year. Particularly, North Texas, Oklahoma, and Kansas experienced improved moisture conditions for the week ending November 26. 

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 9 over the December futures at elevators and barge points. Ethanol production for the week ending November 22 was 1.119 million barrels per day, up 9,000 from the previous week. Ethanol stocks were 22.869 million barrels, up 0.306 million barrels compared to last week. Corn net sales reported by exporters for November 15-21 were net sales of 41.8 million bushels for the 2024/25 marketing year and 2.6 million bushels for the 2025/26 marketing year. Exports for the same period were up 6% compared to last week at 39.8 million bushels. Corn export sales and commitments were 55% 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 49%. Cash prices ranged from $3.95 to $4.61 at elevators and barge points. December 2024 corn futures closed at $4.23, down 2 cents since last Friday. For the week, December 2024 corn futures traded between $4.14 and $4.26. 

Dec/Mar and Dec/Dec future spreads were 10 and 8 cents. March 2025 corn futures closed at $4.33, down 2 cents since last Friday. December 2025 corn futures closed at $4.31, down 5 cents since last Friday. Downside price protection could be obtained by purchasing a $4.40 December 2025 Put Option costing 40 cents establishing a $4.00 futures floor. 

Soybeans

Across Tennessee the average soybean basis weakened or remained unchanged at Northwest, West, North-Central, West- Central, and Mississippi River elevators and barge points. Basis ranged from 26 under to 39 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 91.5 million bushels for the 2024/25 marketing year and 0.7 million bushels for the 2025/26 marketing year. Exports for the same period were down 15% compared to last week at 76.5 million bushels. Soybean export sales and commitments were 68% 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 70%. In Tennessee the crop progress report estimated soybeans harvested at 95% compared to 92% last week, 96% last year, and a 5-year average of 92%. Cash soybean prices at elevators and barge points ranged from $9.57 to $10.28. January 2025 soybean futures closed at $9.86, up 6 cents since last Friday. For the week, January 2025 soybean futures traded between $9.76 and $9.98. Jan/Dec soybean-to-corn price ratio was 2.34 at the end of the week. 

Jan/Mar and Jan/Nov future spreads were 7 and 21 cents. March 2025 soybean futures closed at $9.96, up 4 cents since last Friday. November 2025 soybean futures closed at $10.10, up 2 cents since last Friday. Downside price protection could be achieved by purchasing a $10.20 November 2025 Put Option which would cost 73 cents and set a $9.47 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 November 29 were 67.93 cents/lb (41-4-34) and 69.93 cents/lb (31-3-35). Adjusted World Price (AWP) increased 1.62 cents to 57.53 cents. Cotton net weekly sales reported by exporters were net sales of 324,100 bales for the 2024/25 marketing year – a marketing year high. Exports for the same period were down 12% compared to last week at 130,300 bales. Upland cotton export sales were 63% 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 70%. The Crop Progress report estimated cotton harvested at 84% compared to 77% last week, 81% last year, and a 5-year average of 80%. In Tennessee, cotton harvested was estimated at 95% compared to 89% last week, 96% last year, and a 5-year average of 91%. December 2024 cotton futures closed at 73.35 cents, up 1.7 cents since last Friday. For the week, December 2024 cotton futures traded be- tween 71.99 and 73.7 cents. 

Dec/Mar and Dec/Dec cotton futures spreads were -1.2 cents and -0.77 cents. March 2025 cotton futures closed at 72.15 cents, up 1.38 cents since last Friday. December 2025 cotton futures closed at 72.58 cents, up 0.87 cents since last Friday. Downside price protection could be obtained by purchasing a 73 cent December 2024 Put Option costing 4.62 cents establishing a 68.38 cent futures floor. 

Wheat

Wheat net weekly sales reported by exporters were net sales of 13.5 million bushels for the 2024/25 marketing year. Exports for the same period were up 224% compared to last week at 15.9 million bushels. Wheat export sales were 68% 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 71%. Wheat cash prices at elevators and barge points ranged from $4.87 to $5.11. December 2024 wheat futures closed at $5.32, down 12 cents since last Friday. The December wheat-to-corn price ratio was 1.26. December 2024 wheat futures traded between $5.29 and $5.47 this week. March 2025 wheat futures closed at $5.48, down 16 cents since last Friday. 

Dec/Mar and Dec/Jul future spreads were 16 and 31 cents. The Crop Progress report estimated winter wheat condition at 55% good-to-excellent and 12% poor-to-very poor, winter wheat planted at 97% compared to 94% last week, 97% last year, and a 5 -year average of 98%; and winter wheat emerged at 89% compared to 84% last week, 90% last year, and a 5-year average of 89%. In Tennessee winter wheat condition was estimated at 74% good-to-excellent and 8% poor-to-very poor, winter wheat planted at 93% compared to 86% last week, 92% last year, and a 5-year average of 92%; and winter wheat emerged at 80% compared to 69% last week, 76% last year, and a 5-year average of 77%. July cash contracts at elevators and barge points ranged from $5.26 to $5.54. July 2025 wheat futures closed at $5.63, down 19 cents since last Friday. Downside price protection could be obtained by purchasing a $5.70 July 2025 Put Option costing 53 cents establishing a $5.17 futures floor.   ∆

DR. AARON SMITH: University of Kentucky