Monthly Crop Comments

Supply and Demand Estimates and Profitability Outlook

The following is a summary of the USDA’s monthly World Agricultural Supply and Demand Estimates (WASDE) report. Domestic balance sheets for corn, soybeans, cotton, and wheat are displayed along with price reaction in futures markets for each commodity on the day of the report release. Additionally, supply and demand estimates for key importing and exporting countries are provided for the current month along with change in estimates from the previous report. The Profitability Outlook section contains estimated returns per acre for each commodity based on 2018 Tennessee state average/trend yields and current price offerings (note: cotton prices include a seed and hauling rebate). Variable expenses are based on the University of Tennessee Extension 2023 Row Crop Budgets. Prices are updated monthly; expenses are updated as warranted during the year and may be different than the expenses contained in the 2023 Row Crop Budgets. This section provides an estimation of the current relative profitability amongst major row crops in Tennessee.

The report is prepared monthly by Dr. Aaron Smith.


March 8, 2023 – USDA World Supply and Demand Estimates

Corn

Market Reaction and Price Outlook

May 2024 corn futures closed up 1 ¾ cents at $4.39 ¾ with a trading range for the day of $4.31 ½ to $4.40. December 2024 corn futures closed up 3 cents at $4.72 with a trading range for the day of $4.64 ¾ to $4.72. Reductions in foreign production reduced world ending stocks by 96 million bushels. Overall, the report does nothing to change current price direction. Nearby futures are likely to remain in a trading range of $4.10 and $4.50 until more information about U.S. acreage and spring weather conditions are known.

USDA Summary

This month’s 2023/24 U.S. corn outlook is unchanged relative to last month.  The season-average corn price received by producers is lowered to $4.75 per bushel based on observed prices to date.

Global coarse grain production for 2023/24 is forecast lower.  This month’s foreign coarse grain outlook is for reduced production, larger trade, and smaller ending stocks relative to last month.  Foreign corn production is forecast lower with declines for South Africa, Ukraine, Mexico, Venezuela, and Russia that are partly offset by increases for Argentina and Syria.  South Africa is down reflecting lower yield prospects.  Mexico is cut based on expectations of lower winter corn area. Ukraine and Russia are reduced based on reported harvest results to date.  Argentina is raised based on higher expected area. 

Major global trade changes include higher corn exports for Ukraine and Argentina but reductions for South Africa and India.  Corn imports are lowered for the EU, Saudi Arabia, Israel, and South Korea but raised for Mexico, Venezuela, and Indonesia.  Foreign corn ending stocks are lower, mostly reflecting a decline for Ukraine that is partly offset by an increase for Brazil.  Global corn ending stocks, at 12.582 billion bushels, are down 94 million.

2019/202020/212021/222022/23 Est.2023/24 Projected February2023/24 Projected March2023/24 Change from Previous MonthChange 2023/24-2022/23
 Planted and Harvested Acres & Yield
Planted (Million)89.790.792.988.294.694.60.06.4
Harvested (Million)81.382.38578.786.586.50.07.8
U.S. Avg. Yield (Bu/Acre)167.5171.4176.7173.4177.3177.30.03.9
 Supply (Million Bushels)
Beg. Stocks2,2211,9191,2351,3771,3601,3600-17
Production13,62014,11115,01813,65115,34215,34201,691
Imports4224243925250-14
Total Supply15,88316,05516,27715,06616,72716,72701,661
 Use & Ending Stocks (Million Bushels)
Feed and Residual5,9005,6075,6715,4875,6755,6750188
Ethanol4,8575,0285,3205,1765,3755,3750199
Food, Seed & Industrial1,4291,4391,4371,3821,4051,405023
Exports1,7772,7472,4721,6612,1002,1000439
Total Use13,96314,82114,90013,70614,55514,5550849
U.S. Ending Stocks1,9191,2351,3771,3602,1722,1720812
Foreign Stocks10,14210,29410,85310,51410,50710,411-96-103
 Price and Stocks to Use Ratio
U.S. Avg. Season Price ($/Bu)$3.56$4.53$6.00$6.54$4.80$4.75-$0.05-$1.79
U.S. Stocks/Use13.74%8.33%9.24%9.92%14.92%14.92%0.00%5.00%
Source: USDA-WASDE March 8, 2024

World Corn Supply and Use (Million Bushels) 2023/24 Current Month

Country / RegionBeginning StocksProductionImportsDomestic FeedDomestic TotalExportsEnding Stocks
World11,87448,4327,45929,98347,7237,96312,583
United States1,36015,341255,67512,4552,1002,172
Total Foreign10,51433,0917,43524,30835,2685,86310,411
        Argentina442,20513865551,65341
        Brazil4524,882472,5393,0902,047243
        Russia36654239844120942
        South Africa93610027250811481
        Ukraine1101,1611157197965111
        Egypt59283335524622056
        E.U.2852,3668662,2443,067165285
        Japan510610472610052
        Mexico1779458111,1021,835296
        Southeast Asia1191,2117151,5711,89824123
        South Korea754457366459076
        Canada645941264136307183
        China8,11111,3719058,85812,04718,341
ROW8386,8062,5595,0069,311612783
Source: USDA-WASDE March 8, 2024

World Corn Supply and Use (Million Bushels): Current-Previous Month 2023/24

Country / RegionBeginning StocksProductionImportsDomestic FeedDomestic TotalExportsEnding Stocks
World54-92-13-55857-96
United States
Total Foreign54-92-13-65857-96
        Argentina3939
        Brazil4739398
        Russia-16-16-16
        South Africa-51-16-28-20-4
        Ukraine-3959-98
        Egypt
        E.U.-39-39-39
        Japan
        Mexico-39391212-6-6
        Southeast Asia888
        South Korea-8-8-8
        Canada
        China
ROW715-131590-165

Cotton

Market Reaction and Price Outlook

May 2024 cotton futures closed down 4 cents at 95.28 with a trading range for the day of 95.28 to 101.5 cents. December 2024 cotton futures closed down 1.35 cents at 82.99 cents with a trading range for the day of 82.65 to 84.7 cents. As expected, U.S. production was revised down, resulting in a decrease in projected ending stocks of 300,000 bales. Global domestic use increased 480,000 bales and exports increased 390,000 bales. India was the principal country increasing global exports. Nearby futures prices continue to show volatility with three-digit price swings. Improved demand will be necessary to maintain prices near certain levels.

USDA Summary

This month’s 2023/24 U.S. cotton forecasts show lower production and ending stocks relative to last month. Production is reduced 334,000 bales to 12.1 million, based on the March 8 Cotton Ginnings report. The final estimates for this season’s U.S. area, yield, and production will be published in the May 2024 Crop Production report. Ending stocks are 300,000 bales lower this month at 2.5 million. At 18 percent, stocks as a share of use are projected their lowest since 2020/21. The projected marketing year average price received by upland producers of 77.0 cents per pound is unchanged from last month.

The global cotton supply and demand estimates for 2023/24 show higher production, consumption, and trade, but lower ending stocks. World production is 130,000 bales higher as lower U.S. and Argentine crops are more than offset by a 500,000-bale increase in India. Global consumption is almost 500,000 bales higher as gains for China and India more than offset lower estimates for Turkey and a number of smaller countries. World trade is about 400,000 bales higher as China’s 2023/24 imports are raised 900,000 bales, more than offsetting lower estimates for Turkey and several smaller countries. Exports are projected higher for India, Australia, and Turkey. Ending stocks are marginally lower, down 353,000 bales to 83.3 million.

2018/192019/202020/212021/222022/23 Est.2023/24 Projected February2023/24 Projected March2022/23 Change from Previous MonthChange 2023/24-2022/23
 Planted and Harvested Acres & Yield
Planted (Million)14.113.7412.0911.2113.7510.2310.230-3.52
Harvested (Million)9.9911.58.2210.267.297.067.060-0.23
U.S. Average Yield (lb/acre)882831853820953845822-23-131
 Supply (Million 480 Pound Bales)
Beg. Stocks4.24.857.253.154.054.254.2500.2
Production18.3719.9114.6117.5214.4712.4312.1-0.33-2.37
Imports0000.0100.010.0100.01
Total Supply22.5724.7721.8620.6818.5216.6916.36-0.33-2.16
 Use and Stocks (Million 480 Pound Bales)
Domestic2.982.152.42.552.051.751.750-0.3
Exports14.8415.5116.3514.4812.7712.312.30-0.47
Total Use17.8117.6618.7517.0314.8214.0514.050-0.77
U.S. Ending Stocks4.857.253.154.054.252.82.5-0.3-1.75
Foreign Stocks75.189.883.1572.3778.7280.980.84-0.062.12
Chinese Stocks35.6736.937.7938.0637.439.8540.250.42.85
 Price and Stocks to Use Ratio
U.S. Avg. Season Price ($/lb)$0.703$0.596$0.663$0.914$0.848$0.77$0.77$0.00-$0.08
U.S. Stocks/Use27%41%16.8%24%29%20%18%-2.14%-10.88%
Chinese Stocks/Use90%112%92.2%113%100%108%107%-0.37%7.60%
Source: USDA-WASDE March 8, 2024

World Cotton Supply and Use (Million 480 lb Bales) 2023/24 Current Month

Country / RegionBeginning StocksProductionImportsDomestic UseExportsLossEnding Stocks
World82.97112.9643.23112.9443.26-0.483.34
United States4.2512.10.011.7512.3-0.22.5
Total Foreign78.72100.8643.23111.1930.96-0.280.84
       Central Asia3.445.240.0841.3203.45
       Afr. Fr. Zone1.194.9300.14.5801.44
       Australia4.774.800.015.75-0.24.01
       Brazil5.7614.560.013.311.205.83
       India11.8225.51242012.32
       Mexico0.430.930.71.50.2500.3
       China37.427.512.937.50.05040.25
       E.U.0.391.050.550.571.1300.29
       Turkey2.633.23.871.2501.38
       Pakistan1.536.73.49.80.0801.75
       Indonesia0.36021.90.0200.45
       Thailand0.1400.50.5000.14
       Bangladesh1.730.167.57.8001.59
       Vietnam1.0506.86.8001.05
ROW6.086.293.986.413.330.006.59
Source: USDA-WASDE March 8, 2024

World Cotton Supply and Use (Million 480 lb Bales): 2023/24 Current-Previous Month

Country / RegionBeginning StocksProductionImportsDomestic UseExportsLossEnding Stocks
World00.140.350.480.39-0.04-0.36
United States-0.33-0.04-0.3
Total Foreign0.470.360.480.39-0.06
       Central Asia0.060.01-0.060.11
       Afr. Fr. Zone-0.050.05
       Australia0.1-0.1
       Brazil-0.01-0.01
       India0.50.30.4-0.2
       Mexico
       China0.90.50.4
       E.U.-0.01-0.02
       Turkey-0.2-0.20.1-0.1
       Pakistan-0.2-0.2
       Indonesia
       Thailand-0.03-0.03
       Bangladesh
       Vietnam
ROW-0.09-0.1-0.08-0.1-0.01
Source: USDA-WASDE March 8, 2024

Soybeans

Market Reaction and Price Outlook

May 2024 soybean futures were up 17 ¾ cents for the day closing at $11.84 with a trading range for the day of $11.53 ¾ to $11.85. November 2024 soybean futures closed up 20 cents at $11.73 ¾ with a trading range for the day of $11.46 ¼ to $11.75. Brazil’s production was decreased 37 million. No changes were made to the U.S. balance sheet. The report could help set a bottom in nearby futures prices. Nearby futures are likely to trade between $11.30 and $12.20 until more is known about the 2024 U.S. crop.

USDA Summary

The outlook for U.S. soybean supply and use for 2023/24 is unchanged this month.  While soybean crush is unchanged, the soybean meal extraction rate is increased slightly, and higher soybean meal exports are mostly offset by lower domestic use.  The U.S. season-average soybean price and the soybean meal price forecasts are unchanged for 2023/24.  The soybean oil price is reduced 2 cents to 49 cents per pound.

Global 2023/24 oilseed production is reduced, on lower soybean and sunflowerseed production partly offset by higher rapeseed. Global soybean production is reduced 51 million bushels on lower production for Brazil and South Africa. Global 2023/24 soybean supply and demand forecasts include lower beginning stocks, lower production, lower crush, higher exports, and lower ending stocks compared to last month.  Beginning stocks are lowered 51 million bushels mainly on historical crush and import revisions for China.  Soybean crush for China is raised for 2020/21 to 2022/23 based on a review of in-country estimates and supplies. Soybean imports for China for 2022/23 are also raised to reflect shipping data by major exporters. Global soybean production for 2023/24 is reduced on lower production for Brazil and South Africa. Soybean production for Brazil is lowered 37 million bushels to 5.695 billion on harvest results in Parana and poor weather conditions in São Paulo offset by favorable conditions in the north and Rio Grande do Sul. South African soybean production is lowered 15 million to 77 million on lower yield prospects. Global crush is reduced for Brazil and South Africa on lower supplies, and lower for Ukraine on higher soybean exports. Global soybean exports are raised 110 million bushels on higher shipments to date from Brazil and Ukraine. Soybean imports are raised on higher imports for China, which are now 18 million bushels higher than the prior marketing year’s revised estimate. Global soybean ending stocks are lowered 66 million bushels to 4.2 billion on lower stocks for Brazil that are partly offset by higher Chinese stocks.

2019/202020/212021/222022/23 Est.2023/24 Projected February2023/24 Projected March2023/24 Change from Previous MonthChange 2023/24-2022/23
 Planted and Harvested Acres & Yield
Planted (Million)76.183.487.287.583.683.60.0-3.9
Harvested (Million)74.982.686.386.282.482.40.0-3.8
U.S. Avg. Yield (Bu/Acre)47.451.051.749.650.650.60.01.0
 Supply (Million Bushels)
Beg. Stocks9095252572742642640-10
Production3,5524,2164,4644,2704,1654,1650-105
Imports15201625303005
Total Supply4,4764,7614,7374,5694,4594,4590-110
 Use & Ending Stocks (Million Bushels)
Crushing2,1652,1412,2042,2122,3002,300088
Exports1,6792,2662,1521,9921,7201,7200-272
Seed and Residual10897107101124124023
Total Use3,9524,5044,4634,3054,1444,1440-161
U.S. Ending Stocks525257274264315315051
Foreign Stocks3,0343,4303,1773,4893,9483,884-64395
 Price and Stocks to Use Ratio
U.S. Average Season Price ($/Bu)$8.57$10.80$13.30$14.20$12.65$12.65$0.00-$1.55
U.S. Stocks/Use13.28%5.71%6.14%6.13%7.60%7.60%0.00%1%
Source: USDA-WASDE March 8, 2024

World Soybean Supply and Use (Million Bushels) 2023/2024 Current Month

Country / RegionBeginning StocksProductionImportsDomestic CrushDomestic TotalExportsEnding Stocks
World3,75314,5826,27512,05914,0326,3794,199
United States2644,165302,3002,4241,720315
Total Foreign3,48910,4176,2459,75911,6084,6593,884
        Argentina6321,8372241,3041,571169954
        Brazil1,3725,695171,9472,0853,7851,214
        Paraguay6378112913423120
        China1,1887663,8583,6014,42841,381
        E.U.461125075476061149
        S.E. Asia2517352169359035
        Mexico8523523824008
ROW2111,6061,0511,8232,185459223
Source: USDA-WASDE March 8, 2024

World Soybean Supply and Use (Million Bushels): 2023/2024 Current-Previous Month

Country / RegionBeginning StocksProductionImportsDomestic CrushDomestic TotalExportsEnding Stocks
World-52-50108-40-42112-65
United States
Total Foreign-52-50108-40-42112-65
        Argentina
        Brazil-37-28-28110-119
        Paraguay
        China-5311057
        E.U.11
        S.E. Asia-2-1-1
        Mexico
ROW-13-1-11-132-3
Source: USDA-WASDE March 8, 2024

Wheat

Market Reaction and Price Outlook

May 2024 wheat futures closed up 9 ¼ cents at $5.37 ¾ with a trading range for the day of $5.26 to $5.42 ¾.  July 2024 wheat futures closed 10 ¼ cents for the day at $5.50 ¼ with a trading range for the day of $5.37 ¾ to $5.54. Wheat exports decreased 15 million bushels, increasing projected ending stocks to 673 million bushels. 14% of U.S. winter wheat is in drought compared to 55% last year. Prices will continue to be adversely affected by improved weather conditions and global competition for exports.

USDA Summary

The outlook for 2023/24 U.S. wheat this month is for unchanged supplies and domestic use, lower exports, and higher ending stocks.  Exports are reduced 15 million bushels to 710 million with reductions for Soft Red Winter and Hard Red Winter.  Ending stocks are raised by an equivalent amount to 673 million bushels and are 18 percent higher than last year.  The season-average farm price is reduced $0.05 per bushel to $7.15.

The global wheat outlook for 2023/24 is for larger supplies, consumption, and trade with reduced stocks.  Supplies are projected to increase 29 million bushels to 38.867 billion, primarily on higher government production estimates for Australia, Russia, and Argentina partially offset by reductions for the EU and Serbia.  Global consumption is raised 55 million bushels to 29.358 billion, mainly on higher feed and residual use for the EU, Kazakhstan, and Indonesia.  World trade is raised 51 million bushels to 7.793 billion on higher exports by Ukraine, Australia, and Turkey.  Projected 2023/24 global ending stocks are lowered 22 million bushels to 9.509 billion, the lowest since 2015/16.

 2019/202020/212021/222022/23 Est.2023/24 Projected February2023/24 Projected March2023/24 Change from Previous MonthChange 2023/24-2022/23
 Planted and Harvested Acres & Yield
Planted (Million)45.544.546.745.849.649.603.8
Harvested (Million)37.436.837.135.537.337.301.8
U.S. Avg. Yield (Bu/Acre)51.749.744.346.548.648.602.1
 Supply (Million Bushels)
Beg. Stocks1,0801,0288456745705700-104
Production1,9321,8281,6461,6501,8121,8120162
Imports10410096122145145023
Total Supply3,1162,9562,5882,4462,5272,527081
 Use & Ending Stocks (Million Bushels)
Food9629619719739609600-13
Seed6264586864640-4
Feed95938877120120043
Exports969994796759725710-15-49
Total Use2,0872,1111,9131,8761,8691,854-15-22
U.S. Ending Stocks1,02884567457065867315103
Foreign Stocks9,8799,6769,3489,3928,8758,838-37-554
 Price and Stocks to Use Ratio
U.S. Avg. Season Price ($/Bu)$4.58$5.05$7.63$8.83$7.20$7.15-$0.05-$1.68
U.S. Stocks/Use49.26%40.03%35.23%31.89%35.21%36.30%1.09%4.41%
Source: USDA-WASDE March 8, 2024

World Wheat Supply and Use (Million Bushels) 2023-24 Current Month

Country / RegionBeginning StocksProductionImportsDomestic FeedDomestic TotalExportsEnding Stocks
World9,96128,9067,7615,95529,3577,7949,510
United States5701,8121451201,144710672
Total Foreign9,39227,0947,6165,83528,2137,0858,838
        Argentina15058427246386104
        Australia1619557129257735131
        Canada1291,17422129320882124
        European Union6074,9114781,7274,0971,341557
        Russia5383,362117351,5801,874457
        Ukraine129860399283588121
        Bangladesh30402139248036
        Brazil67298206294488141
        China5,1015,0194041,3605,640334,851
        Japan4241195242261141
        N. Africa4226151,080641,72926362
        Nigeria13417601691312
        Sel. Mideast4327637941291,47132486
        Southeast Asia130098828592641152
        India3494,06292484,07911331
        Kazakhstan120445924823036760
        United Kingdom92514882685702996
ROW8803,4472,8465455,695634877
Source: USDA-WASDE March 8, 2024

World Wheat Supply and Use (Million Bushels): 2023/2024 Current-Previous Month

Country / RegionBeginning StocksProductionImportsDomestic FeedDomestic TotalExportsEnding Stocks
World-43549595453-22
United States-1515
Total Foreign-43549595468-37
        Argentina15116
        Australia1818
        Canada-60-5
        European Union-13373737-13
        Russia1818
        Ukraine-11-1137-26
        Bangladesh
        Brazil
        China-37-37
        Japan
        N. Africa
        Nigeria
        Sel. Mideast7-18-7-4
        Southeast Asia-762243917
        India
        Kazakhstan1811117
        United Kingdom1147
ROW1-3-26-2-1813-19
Source: USDA-WASDE March 8, 2024

Profitability Update

2023 Estimated Returns – Non-Irrigated

The profitability outlook has been updated after the release of the March 8, 2024, USDA WASDE and Crop Production reports. For the table below, non-irrigated yields are estimated average yields for Tennessee for the 2023 crop. Prices used for grain and cotton are based on current Tennessee cash prices provided by USDA AMS. Revenue estimates do not consider any government payments (crop insurance, ARC or PLC, etc.). Costs shown below are based on the 2023 UT Extension Row Crop budgets with adjustments made where warranted. Land cost was estimated as a cash rent at the USDA NASS state average of $113 per acre. Substantial variation in land costs exist in Tennessee. Additional details on expenses can be found in the 2023 UT Crop Budgets.

Based on projected yields, prices, and expenses returns over specified costs for corn, cotton, soybeans, and wheat/soybeans are showing a -$128, $215, $10, and -$11 per acre net returns. Producers with higher yields or lower cost structures may attain improved net returns over specified costs. Producers that priced production at higher market prices earlier in 2023 may have higher net returns as prices have declined since the summer. The table below should be used as a guide as yields, prices, and expenses will vary among producers and locations. Expenses will also vary among producers and production systems.

Please contact your local County Extension office or Extension Specialist – Farm Management for assistance in developing a budget or financial plan for your farm.

CottonSoybeansCornWheat/Soybeans
Yield – Crop Production Report (Tennessee)1,2375117380 /50
Current Price (as of 3/8/2024)$0.94$11.63$4.19$5.32/$11.63
Revenue$1,163$593$725$1,007
Variable Expenses$640$340$595$660
Returns Over Variable$523$253$130$347
Land Costs (Cash Rent – NASS State Average)$113$113$113$113
Returns Over Variable and Land Costs$410$140$17$234
Fixed Costs (Capital Recovery and Management Labor)$195$130$145$245
Returns Over Specified Costs$215$10($128)($11)
Breakeven Price at Estimated Yield and Specified Cost$0.77$11.43$4.93$6.36/$10.18

2023 Estimated Returns – Irrigated

The profitability outlook has been updated after the release of the March 8, 2024, USDA WASDE and Crop Production reports. For the table below, irrigated yields were estimated as: 240 bushels per acre for corn, 65 bushels per acre for full-season soybeans, 1,450 pounds per acre cotton, and 95 bushels of wheat and 60 bushels of soybeans for Double Crop Wheat/Soybeans. Prices used for grain and cotton sales are based on current Tennessee cash prices provided by USDA AMS. Revenue estimates do not consider any government payments (crop insurance, ARC or PLC, etc.). Costs shown below are based on the 2023 UT Extension Row Crop budgets with adjustments made where warranted. Irrigation fixed costs and energy costs will vary greatly among producers and irrigation systems. Land cost was estimated as cash rent of $197/acre (USDA NASS state average for Tennessee). Substantial variation in land costs exist in Tennessee. Additional details on expenses can be found in the 2023 UT Crop Budgets.

Based on projected yields, prices, and expenses corn, cotton, soybeans, and wheat/soybeans are showing returns of -$221, $106, -$91, and -$179 per acre net returns. Producers that priced production at higher market prices earlier in 2023 may have higher net returns as prices have declined since the start of the year. Additionally, producers with higher yields or lower cost structures may attain improved net returns over specified costs. The table below should be used as a guide as yields, prices, and expenses will vary among producers and locations. Expenses will vary among producers and production systems.

Please contact your local County Extension office or Extension Specialist – Farm Management for assistance in developing a budget or financial plan for your farm.

CottonSoybeansCornWheat/Soybeans
Estimated Yield (lb or bu)1,4506524095/60
Current Price (as of 3/8/2024)$0.94$11.63$4.19$5.32/$11.63
Revenue$1,363$756$1,006$1,203
Variable Expenses (includes energy cost)$760$410$780$840
Fixed Irrigation Costs per Acre$100$100$100$100
Returns Over Variable & Fixed IR Costs$503$246$126$263
Land Costs (Cash Rent – NASS State Average)$197$197$197$197
Returns Over Variable, IR Fixed Cost and Land Costs$306$49($71)$66
Fixed Costs (Capital Recovery and Management Labor)$200$140$150$245
Returns Over Specified Costs$106($91)($221)($179)
Breakeven Price at Estimated Yield and Specified Cost$0.87$13.03$5.11$7.68/$12.56