USDA Released Several Major Reports On January 10

DR. AARON SMITH

KNOXVILLE, TENNESSEE

The USDA released several major reports on January 10. Reports included the Grain Stocks, Winter Wheat and Canola Seedings, Crop Production, and World Agricultural Supply and Demand Estimates (WASDE). 

The report that created the most movement in prices was the January WASDE. USDA decreased estimate corn yield by 3.8 bushels per acre resulting in a decrease in production of 276 million bushels. US ending stocks for the 2024/25 marketing year are now projected at 1.54 billion, down 198 million compared to last month. For comparison, the August WASDE estimated U.S. ending stocks at 2.1 billion bushels, a far more bearish number than the current estimate. The revisions in corn supply and demand will help firm the bottom ($4.40) of the nearby futures trading range and provide the possible opportunity at $5.00 this spring/summer. 

Revisions to soybeans were also bullish for prices. Yield and harvested acres were decreased resulting in a 95 million bushel decrease in production and a 90 million bushel decrease in projected ending stocks compared to the previous month. Futures prices reacted positively to the estimates. No changes were made to production estimates in South America, which will continue to be the dominant source for market moving information for the next few months. 

Details of the WASDE report for corn, soybean, wheat and cotton are available at: https://arec.tennessee.edu/extension/ tennessee-market-highlights/monthly-crop-comments/ 

The Grain Stocks report indicated corn held in storage on December 1 was down 1% compared to last year. Soybeans held in storage were estimated up 3% compared to last year and wheat held in storage was estimated up 10% compared to last year. The USDA provides quarterly estimates of grains and oilseeds held in storage on-farm and off-farm. The estimates can be utilized to derive quarterly demand for a commodity. 

The Winter Wheat and Canola Seedings report indicated Tennessee producers planted 350,000 acres of winter wheat, down 30,000 compared to last year. US winter wheat planting was estimated at 34.115 million acres, up 725,000 acres compared to last year. Texas and Montana were projected to increase planted acreage by 300,000 acres each. Kansas and Oklahoma were estimated to have planted 200,000 and 100,000 fewer acres compared to the previous year. 

Corn

Across Tennessee, average corn basis (cash price-nearby futures price) weakened or remained unchanged at West, Northwest, West-Central, North-Central, and Mississippi River elevators and barge points. Overall, basis for the week ranged from 10 under to 20 over, with an average of 7 over the March futures at elevators and barge points. Ethanol production for the week ending January 3 was 1.102 million barrels per day, down 9,000 from the previous week. Ethanol stocks were 24.148 million barrels, up 0.509 million barrels compared to last week. Corn net sales reported by exporters for December 27-January 2 were net sales of 17.5 million bushels for the 2024/25 marketing year – a marketing year low. Exports for the same period were down 14% compared to last week at 34.0 million bushels. Corn export sales and commitments were 62% 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 59%. Cash prices ranged from $4.27 to $4.83 at elevators and barge points. March 2025 corn futures closed at $4.70, up 20 cents since last Friday. For the week, March 2025 corn futures traded between $4.51 and $4.72. May 2025 corn futures closed at $4.79, up 21 cents since last Friday. 

Mar/May and Mar/Dec future spreads were 9 and -20 cents. December 2025 corn futures closed at $4.50, up 10 cents since last Friday. Downside price protection could be obtained by purchasing a $4.60 December 2025 Put Option costing 43 cents establishing a $4.17 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 27 under to 30 over the March 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 10.6 million bushels for the 2024/25 marketing year – a marketing year low and 0.01 million bushels for the 2025/26 marketing year. Exports for the same period were down 7% compared to last week at 58.1 million bushels. Soybean export sales and commitments were 81% 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 80%. Cash soybean prices at elevators and barge points ranged from $9.66 to $10.28. March 2025 soybean futures closed at $10.25, up 34 cents since last Friday. For the week, March 2025 soybean futures traded between $9.85 and $10.33. March soybean-to-corn price ratio was 2.21 at the end of the week. May 2025 soybean futures closed at $10.38, up 35 cents since last Friday. 

Mar/May and Mar/Nov future spreads were 13 and 6 cents. November 2025 soybean futures closed at $10.31, up 23 cents since last Friday. Downside price protection could be achieved by purchasing a $10.40 November 2025 Put Option which would cost 67 cents and set a $9.73 futures floor. Nov/Dec 2025 soybean-to-corn price ratio was 2.29 at the end of the week. 

Cotton

North Delta upland cotton spot price quotes for January 8 were 65.73 cents/lb (41-4-34) and 67.73 cents/lb (31-3-35). Adjusted World Price (AWP) decreased 0.37 cents to 54.66 cents. Cotton net weekly sales reported by exporters were net sales of 137,400 bales for the 2024/25 marketing year. Exports for the same period were up 66% compared to last week at 191,700 bales – a marketing year high. Upland cotton export sales were 73% 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 79%. March 2025 cotton futures closed at 67.01 cents, down 0.65 cents since last Friday. For the week, March 2025 cotton futures traded between 66.9 and 69.15 cents. May 2025 cotton futures closed at 68.26 cents, down 0.55 cents since last Friday. 

Mar/May and Mar/Dec cotton futures spreads were 1.25 cents and 1.85 cents. December 2025 cotton futures closed at 68.86 cents, down 0.20 cents since last Friday. Downside price protection could be obtained by purchasing a 70 cent December 2025 Put Option costing 4.71 cents establishing a 65.29 cent futures floor. 

Wheat

Wheat net weekly sales reported by exporters were net sales of 4.1 million bushels for the 2024/25 marketing year – a marketing year low. Exports for the same period were up 8% compared to last week at 15.2 million bushels. Wheat export sales were 74% 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 82%. Wheat cash prices at elevators and barge points ranged from $4.96 to $5.28. March 2025 wheat futures closed at $5.30, up 1 cent since last Friday. The March wheat-to-corn price ratio was 1.13. March 2025 wheat futures traded between $5.26 and $5.44 this week. May 2025 wheat futures closed at $5.43, up 2 cents since last Friday. 

Mar/May and Mar/Jul future spreads were 13 and 24 cents. July cash contracts at elevators and barge points ranged from $5.12 to $5.44. July 2025 wheat futures closed at $5.54, up 5 cents since last Friday. Downside price protection could be obtained by purchasing a $5.60 July 2025 Put Option costing 45 cents establishing a $5.15 futures floor.   ∆

DR. AARON SMITH: University of Tennessee