Interest Rate Cut Will Have Impact On Farm Balance Sheets And Impacts On Short Terms Loans
DR. CHARLEY MARTINEZ
KNOXVILLE, TENNESSEE
At the end of last week, prices across the board were up, and closed higher following the WASDE report on Friday. This week, the opposite has occurred on this Friday. Prices were steady to strong throughout the week, then prices slipped the second half of Friday to weekly lows.
Additionally, the USDA released numerous reports this week. Below are the highlights for each report.
Feed Outlook: corn area harvested is raised 1.356 million acres and associated yields are lowered 2.1 bushels per acre for corn, which combined together, result in production gains for both grains of 72.7 million bushels for corn.
-For Tennessee, Corn area harvested for grain changes between 2024/25 and 2025/26 were 210,000 acres, which is a 32% increase.
Cotton and Wool Outlook: USDA’s September Crop Production report forecasts 2025/26 U.S. cotton production at 13.2 million bales, nearly identical to the August estimate but 1.2 million bales (8%) below the 2024/25 crop. Offsetting changes in State yields, coupled with several area adjustments, contributed to the September U.S. crop forecast being similar to last month’s forecast. The 2025/26 cotton crop is forecast at the second lowest level since 2015/16.
The estimate for U.S. cotton demand (mill use plus exports) for 2025/26 remains projected at 13.7 million bales, with U.S. exports contributing the bulk of the total. U.S. cotton exports are projected at 12.0 million bales in 2025/26, slightly above the previous year as global trade competition from Brazil is expected to limit U.S. export growth. Despite world trade prospects that are 2% (1 million bales) higher in 2025/26, the U.S. share of global trade is projected to remain near that of 2024/25. For 2025/26, the U.S. share is forecast at 27.5%, marginally below last season and below the 5-year average of approximately 31%. U.S. cotton mill use is projected at 1.7 million bales in 2025/26, unchanged from August and last season.
Oil Crops Outlook: The USDA, National Agricultural Statistics Service’s (NASS) Crop Production report this month indicated the marketing year (MY) 2025/26 soybean production is at 4.3 billion bushels, 8.0 million bushels higher than the previous month’s forecast. The production forecast is raised on higher acreage. The soybean yield forecast for MY 2025/26 stands at 53.5 bushels per acre, 0.1 bushels per acre lower than the previous estimate. The U.S. soybean export forecast is reduced this month to 1.69 billion bushels. The 2025/26 soybean season-average farm price forecast is lowered by 10 cents to $10 per bushel.
Wheat Outlook: The United States was historically the world’s leading wheat exporter but has lost this position in recent years. U.S. exports are raised this month 1.0 million metric tons (MMT) to 24.5 MMT with a fast pace of sales and shipments, particularly for Hard Red Winter (HRW). Furthermore, U.S. prices are competitive with other global origins. However, even with U.S. exports forecast at a 5-year high, the United States is still forecast as the 5th-largest global wheat supplier. Global import demand is forecast to rebound in 2025/26 but would still be below the record set in 2023/24. Global wheat production is forecast at a record high this year with major competitors expected to harvest bumper crops. Russia and the European Union (EU) are forecast to once again lead global exports with larger crops. Canada and Australia are also expecting bumper crops and will compete with U.S. exports in key markets as well.
This week, the fed announced an interest rate cut, which will have impact on farm balance sheets and impacts on short terms loans, such as operating loans for farms.
Corn
Across Tennessee, average corn basis (cash price-nearby futures price) weakened at West, Northwest, West-Central, North-Central, and Mississippi River elevators and barge points. Overall, basis for the week ranged from 35 cents under to 5 cents under, with an average of 18 cents under with the December futures at elevators and barge points. Ethanol production for the week ending September 12 was 1.05 million barrels per day, down 50,000 compared to the previous week. Ethanol stocks were 22.60 million barrels, down 235,000 barrels compared to last week. Corn net sales reported by exporters for September 5-11 were 48.5 million bushels for the 2025/26 marketing year. Exports for the period was 61.3 million bushels. Cash prices ranged from $3.88 to $4.28 at elevators and barge points. December 2025 corn futures closed at $4.24, which is down 6 cents since last Friday. For the week, December 2025 corn futures traded between $4.22 and $4.31.
Nationally, the Crop Progress report estimated corn condition at 67% good-to-excellent (down 1% from last week) and 9% poor-to-very poor (unchanged from last week); corn dented at 85% compared to 74% last week, 83% last year and a 5-year average of 86%; corn mature at 41% compared to 25% last week, 43% last year and a 5-year average of 41%; and corn harvested at 7% compared to 4% last week, 8% last year and a 5-year average of 7%. In Tennessee, corn condition was estimated at 53% good-to-excellent (down 2% from last week) and 16% poor-to-very poor (up 4% from last week); corn dented at 97% compared to 95% last week, 96% last year, and a 5-year average of 96%; corn mature at 86% compared to 66% last week, 84% last year and a 5-year average of 70%; and corn harvested at 48% compared to 28% last week, 44% last year and a 5-year average of 23%. This week, Oct/Nov cash contracts ranged from $3.68 to $4.60 at elevators and barge points. March 2026 corn futures closed at $4.41, down 6 cents since last Friday.
Soybeans
Across Tennessee average soybean basis slightly weakened compared to last week at West, Northwest, North-Central, West-Central, and Mississippi River elevators and barge points. Average basis ranged from 81 under to 22 under the September futures contract, with an average basis at the end of the week of 42 under. Soybean net weekly sales reported by exporters had net sales of 33.9 million bushels for 2025/2026 marketing year and 84,500 bushels for the 2026/2027 marketing year. Exports for the period ending September 11 was 30.8 million bushels. Cash soybean prices at elevators and barge points ranged from $9.73 to $10.28. November 2025 soybean futures closed at $10.25, down 21 cents since last Friday. For the week, November 2025 soybean futures traded between $10.22 and $10.54.
Nationally, the Crop Progress report estimated soybean condition at 63% good-to-excellent (up 1% from last week) and 11% poor-to-very poor (up 1% from last week); soybeans dropping leaves at 41% compared to 21% last week, 41% last year, and a 5-year average of 40%; and soybeans harvested at 5% compared to 0% last week, 6% last year, and a 5-year average of 3%. In Tennessee, soybean condition was estimated at 37% good-to-excellent (up 1% from last week) compared to 27% poor-to-very poor (down 1% from last week); soybeans dropping leaves at 54% compared to 41% last week, 56% last year, and a 5-year average of 37%; and soybeans harvested at 17% compared to 9% last week, 20% last year, and a 5-year average of 7%. Oct/Nov cash prices at elevators and barge points were $9.73 to $10.25 for the week. January 2026 soybean futures closed at $10.44, down 21 cents since last Friday. Nov/Dec 2025 soybean-to-corn price ratio was 2.42 at the end of the week.
Cotton
North Delta upland cotton spot price quotes for September 19th were up to 64.90 cents/lb (41-4-34) and 69.65 cents/lb (31-3- 35). Cotton net weekly sales totaled 186,100 bales for the 2025/26 marketing year, which was up 44% from the previous week and 13% from the prior 4-week average. Additionally, there were total net sales of 19,000 bales for 2026/2027 were for Vietnam. Exports of 120,500 bales were down 8% from the previous week and from the prior 4-week average.
Nationally, the Crop Progress report estimated cotton condition at 52% good-to-excellent (down 2% from last week) and 14% poor-to-very poor (down 3% from last week); cotton bolls opening at 50% compared to 40% last week, 53% last year and a 5-year average of 49%; and harvested at 9% compared to 8% last week, 10% last year, and a 5-year average of 8%. In Tennessee, cotton condition was estimated at 34% good-to-excellent (up 2% from last week) and 34% poor-to-very poor (up 1% from last week); cotton bolls opening at 66% compared to 42% last week, 66% last year and a 5- year average of 37%; and harvested at 1% compared to 0% last week, 1% last year, and a 5-year average of 1%. December 2025 cotton futures closed at 66.29 cents, down 54 cents since last Friday. For the week, December 2025 cotton futures traded between 66.27 to 67.84 cents. Dec/Mar and Dec/May cotton futures spreads were 1.99 cents and 3.37 cents. March 2026 cotton futures closed at 68.28 cents, down .47 cents since last Friday. May 2026 cotton futures closed at 69.66 cents, down .46 cents since last Friday.
Wheat
Wheat net weekly sales reported by exporters were net sales of 13.8 million bushels for the 2025/26 marketing year (up 24% from the previous week, but down 12% from the prior 4-week average), and 367,437 bushels for the 2026/2027 marketing year. Exports for the same period were up from the previous week at 28.5 million bushels (up 19% from the prior 4-week average). Nationally, the Crop Progress report estimated spring wheat harvested at 94% compared to 85% last week, 91% last year, and a 5-year average of 92%; and winter wheat planted at 11% compared to 5% last week, 13% last year, and a 5-year average of 13%. Wheat cash prices at elevators and barge points ranged from $4.69 to $4.79.
December 2025 wheat futures closed at $5.22, down 1 cent since last Friday. December 2025 wheat futures traded between $5.20 and $5.35 this week. July 2026 wheat futures closed at $5.62, up 1 cent since than last Friday. ∆
DR. CHARLEY MARTINEZ
UNIVERSITY OF TENNESSEE