U.S. corn ending stocks for the 2024/25 old-crop marketing year were projected at 1.340 billion bushels, down from a forecast for 1.365 billion bushels a month ago and below the average analyst estimate for 1.353 billion bushels. The agency’s corn export view was raised to a record 2.750 billion bushels, from 2.650 billion bushels a month ago, according to USDA data.

The USDA’s old-crop U.S. soybean stocks forecast held unchanged at 350 million bushels, below the average trade estimate of 358 million bushels.

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The tour projected Iowa’s corn yield at 192.79 bushels per acre (bpa), well above the 2023 tour average of 182.80 bpa for the largest U.S. corn state and above the tour’s three-year average of 185.79 bpa.

But in Minnesota, the fourth-largest corn producer, the tour projected yield at 164.90 bpa, far below last year’s estimate of 181.34 bpa and the three-year average of 183.06.

The four-day tour, which began on Monday, projected above-average corn yields for six of the seven Corn Belt states surveyed.

The outlook for bumper harvests comes as grain and oilseed futures prices have slipped to nearly four-year lows amid ample global supplies.

In Iowa and much of the Midwest, crops benefited from near-ideal weather.

“Generally we’ve seen good growing conditions, and it shows,” said Brian Grete, Pro Farmer editor and leader of the tour’s eastern leg. “An early frost would be the one thing that could derail it.”

Minnesota was an exception. “The corn crop is going to struggle to make the finish line. They have seen too much excess rainfall this season, which has washed away the fertilizer,” said Scott German, a North Dakota farmer who was on the tour.

Yet Minnesota’s soybeans fared better.

The tour, which does not project soybean yields, estimated the number of soybean pods in a 3-ft by 3-ft (91-cm by 91-cm) square in Minnesota at an average of 1,036.59 pods, above last year’s average of 985.00 pods and close to the three-year average of 1,037.70 pods.

For Iowa, the No. 2 soy producer after Illinois, the tour estimated the average number of soybean pods in a 3-ft by 3-ft (91-cm by 91-cm) square at 1,312.31, above last year’s tour average of 1,190.41 pods and the three-year average of 1,194.21 pods.

This month, the U.S. Department of Agriculture forecast a record U.S. soybean crop and the third largest corn crop.

In addition to Iowa and Minnesota, the four-day tour this week scouted fields in South Dakota, Nebraska, Illinois, Indiana and Ohio.

The editors of Pro Farmer, a newsletter, will release their own estimate of U.S. corn and soybean production on Friday.

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Though scouts on the four-day crop tour said there was solid soybean crop potential in the two states, some questioned whether corn yields in South Dakota would hit the hefty levels the government has predicted – and whether there could be more grain in Ohio than expected.

The U.S. Department of Agriculture this month forecast a record U.S. soybean crop and the third-largest corn crop – a bounty that comes as grain and oilseed prices have slumped to nearly four-year lows amid robust global supplies and growing concerns about demand from top soybean buyer China.

South Dakota’s average corn yields were projected at 156.51 bushels per acre (bpa), the Pro Farmer Midwest Crop Tour said, below the 2023 crop tour average of 157.42 bpa but higher than the three-year crop tour average of 142.44 bpa.

Some scouts found persistent rains at the beginning of the growing season had limited the number of ears on the plants, pressuring yields in some fields.

“It was disappointing,” crop scout Sherman Newlin said.

In Ohio, the tour’s state average corn yield was projected at 183.29 bpa, just below the 2023 crop tour average of 183.94 bpa and above the prior three-year average of 181.06 bpa.

The USDA has projected a seven per cent increase in South Dakota’s corn yield this year and a five per cent drop in Ohio’s, compared to 2023.

The four-day crop tour, which does not project soybean yields, estimated the amount of soybean pods in a 3-by-3-foot square in South Dakota at an average of 1,025.89 pods, up from last year’s average of 1,013.00 pods and above the three-year average of 960.42 pods.

It estimated the amount of soybean pods per 3-by-3-foot square in Ohio at an average of 1,229.93 pods, down from last year’s average of 1,252.93 pods but above the three-year average of 1,193.31 pods.

The tour will release forecasts for Indiana and Nebraska on Tuesday.

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He noted the Corn Belt didn’t quite get the heat in July and so far in August that had been forecast and with rain to come he said, “everything is just ideal.”

“Anyone catching some rain from this point on to the end of the month, that’s going to be beneficial to corn and soybeans,” Capinegro added.

In turn, that played into the recent downward trend for soybeans and corn futures at the Chicago Board of Trade. The broker said the increases both commodities had on Aug. 14 were most likely a ‘dead cat bounce’ and the declines would soon resume.

Capinegro said the August supply and demand report from the U.S. Department of Agriculture pegged soybean ending stocks for 2024/25 at 560 million bushels, up from July’s estimate of 435 million.

“We’re in the camp that’s going to go to 600 million just because they’re overstating exports,” he stated, which would be well above the 2023/24 carryover of 345 million bushels.

However, Capinegro theorized the USDA could be factoring in an assumption that soybean prices are going to fall further and in turn that would generate greater exports.

He also suggested that soybean futures could feel more pressure should Brazil’s next crop get off to a good start. He said it’s likely there will be more soybean acres planted in Brazil for 2024/25, but not to any great extent.

The broker noted the Pro Farmer crop tour is set to begin Aug. 19, with the trade keeping an eye on the results.

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Barley trading into the key livestock feeding area around Lethbridge, Alta. has increased by about C$10 per tonne over the past two weeks to hit levels around C$280 per tonne, according to Jim Beusekom of Market Place Commodities in Lethbridge.

He said the gains were “lockstep” with the U.S. corn market, although cautioned that little had changed on the fundamental side.

“Just logistically on the Prairies, moving grain over the next 60 days will become challenging,” said Beusekom, pointing out that muddy conditions and spring road bans limiting grain movement and causing freight costs to rise were contributing to the nearby strength in the market with expectations that farmers will soon be turning their attention to seeding also providing support.

Looking ahead, Statistics Canada recently forecast a 2.5 per cent decline in barley area in 2024, at 7.1 million acres. However, Beusekom didn’t expect the smaller acreage base would provide much support to prices given the expectations for a large carryout from the 2023/24 marketing year. “We’ll be starting with ample supplies, which usually means a fairly stable market depending on what the growing season does.”

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He is not alone.

Farmers across the United States are kicking themselves for putting off corn sales after fields dried up in May and June, fueling expectations for higher prices and smaller harvests. Instead, prices tanked as rains saved the crop. The size and speed of the price collapse stung farmers and left their storage bins stuffed with record amounts of corn.

The steepest market downturn in a decade in 2023 has extended into 2024, hurting the U.S. rural economy. Two years of high prices and tight crop supplies spurred by unfavorable global weather and disruption from the Ukraine war have been quickly reversed.

Record-large harvests in the United States and Brazil, increased competition for U.S. grain exports, and limited domestic demand led to hefty amounts of corn locked away in storage, pushing U.S. corn prices to their lowest level since November 2020 on Wednesday.

Corn is the world’s most traded commodity crop and often sets the tone for other crops. Soybeans, too, plummeted to their lowest prices in more than three years in February.

Ten farmers, economists and market analysts said U.S. growers miscalculated when they held on to corn rather than booking sales. The “store and ignore” strategy of waiting for higher prices has not paid off, leaving some farmers cutting back purchases of pricey equipment and planting less corn. The interviews also demonstrate the tricky decisions farmers face when determining when to sell in the face of potential crop losses.

Corn futures prices Cv1 that approached $6.30 a bushel in June have since tumbled to $4.10, after U.S. farmers ultimately produced record crop yields.

“I wish I sold a lot more,” Henebry said.

U.S. growers held a whopping 7.83 billion bushels of corn in storage bins on their farms as of Dec. 1, the most ever for that date and up 16 per cent from a nine-year low in December 2022, U.S. government data show. Globally, leftover inventories are projected to reach a five-year high by September after accounting for all the corn used to feed livestock, make biofuels and other purposes.

Henebry said he still has about 40 per cent of his 2023 harvest in storage, including 30,000 bushels on his farm in central Illinois. He is paying 3 to 4 cents per bushel a month to keep another 30,000 bushels at a local grain elevator. In a normal year, he would not have any still stored there, he said.

Before prices plunged last summer, Henebry said he sold some corn for $5.50 to $5.70 per bushel and then for as much as $6.21 per bushel delivered to the grain elevator. He held off on further sales because he was counting on poor weather to reduce production and boost prices.

Prices tumbled, though, and Henebry said he sold corn in December for $4.60 per bushel. He wishes he would have unloaded even more at that price.

Prices will come under renewed pressure as farmers do sell the grain they have in storage, analysts said.

“Any sort of little rally, there’s going to be a lot of corn sold,” said Henebry.

‘I’ll just give up’

Fred Huddlestun, a farmer in Yale, Illinois, said he still had his entire 2023 corn harvest in storage last month: about 39,000 bushels at an elevator and 25,000 bushels at home. Prices never reached targets he set to make sales last year, even as he lowered them.

Huddlestun could have earned roughly $360,000 if he had struck deals to sell 64,000 bushels just after Easter; $382,000 around Father’s Day in June; and $307,000 on Halloween, based on Chicago Board of Trade corn futures that represented last autumn’s crop. At current prices, his grain is worth about $263,000. Futures and cash prices often differ by a few cents.

“I kept thinking the market would go up,” Huddlestun said. “I’ll just give up eventually and start selling if nothing happens.”

Huddlestun said he should have sold around $5.50 a bushel. Though all operations are different, breakeven prices for corn growers in central Illinois were about $5.27 a bushel in 2023, including costs for land and other expenses, according to University of Illinois estimates.

Farmers have the space to squirrel away crops after increasing their storage capacity by 24 per cent over the last two decades to 13.6 billion bushels. Storing grain gives farmers more control over when and how they sell, to avoid prices that are typically low at harvest time and to best take advantage of spikes in futures. At grain elevators and other commercial handlers, off-farm storage capacity has increased by 40 per cent to 11.9 billion bushels over the past 20 years, according to U.S. government data.

High interest rates make storage more costly because farmers’ crops are tied up in bins rather than sold to reduce debt, economists said.

In southern Illinois, the second biggest corn-producing state, farmers could actually lose up to $160 an acre growing corn this year, based on corn prices and the cost of production, University of Illinois economists said in a January report. Two years ago, profits reached about $340 an acre.

Such expected losses are rippling through rural America. Net farm income in 2024 is projected to suffer the largest year-to-year dollar decrease in history, the American Farm Bureau Federation, an industry group, said in a report this month.

Deere & Co, the world’s largest farm equipment maker, expects sales of large agricultural equipment to decline 20 per cent this year, due to lower commodity prices and high interest rates.

‘Plenty of corn’

In Wamego, Kansas, Glenn Brunkow, a fifth-generation crop and livestock farmer, plans to delay upgrades to machinery and may try to repair equipment himself, rather than paying a dealership.

“We’re tightening expenses as much as we can,” he said. “We’re trying to limp through putting off some expansion with the livestock, just trying to limp by.”

Early forecasts show U.S. farmers are likely to cut back on corn planting and favor soybeans in 2024. They may struggle to turn a profit with either crop.

Brunkow said he plans to forgo corn planting entirely and grow some sorghum, which requires less fertilizer and has less expensive seeds than corn. Sorghum can be used to make ethanol, feed livestock or be exported to China to make baiju liquor.

Years ago, Brunkow gave up on growing sorghum because it produces lower yields and is difficult to dry at harvest time.

Now, “the economics just are better,” he said. “You’re going to lose less money.”

Analysts do not expect a major bump in demand to draw down corn stockpiles. U.S. exports of agricultural and related products fell 10 per cent by value in 2023 to a three-year low, as plentiful supplies from Brazil and elsewhere challenged U.S. export sales.

Demand from the U.S. meat industry, which feeds corn to livestock, is limited as pig farmers face lackluster pork demand while cattle ranchers slashed their herds due to drought in the Great Plains.

Biofuel demand, which typically accounts for about one-third of U.S. corn production, also worries Rod Weinzierl, executive director of the Illinois Corn Growers Association, as Americans buy more electric vehicles.

“This year every fork in the road has been bearish,” said Matt Wiegand, commodity broker for risk management firm FuturesOne in Nebraska.

—Additional reporting for Reuters by Julie Ingwersen in Chicago.

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“Yields are the big driver of this whole thing,” stated MarketsFarm analyst Bruce Burnett.

The initial projections from the USDA were based on economic models, past data, weather patterns, and essentially the department’s best estimate. The USDA is scheduled to issue its farmer survey-based projections for 2024/25 at the end of March.

For soybeans, the USDA forecast the national yield to reach 52 bushels per acre in 2024/25, up from the current year’s 50.6. Planted acres were set to rise to 87.5 million compared to 83.6 million in 2023/24, with harvested acres rising to 86.6 million from 82.4 million. That would boost production to 4.505 billion bushels from 4.165 billion.

Total domestic use for U.S. soybeans was projected to bump up to 2.525 billion bushels in 2024/25 from this year’s 2.424 billion. Exports as well are to improve to 1.875 billion bushels from 1.720 billion. That’s to see ending stocks jump to 435 million bushels from 315 million in 2023/24.

As for U.S. corn, the USDA forecast yields to rise to 181 bu./ac. in 2024/25 from 177.3. Planted acres were dropped to 91.0 million from this year’s 94.6 million. Harvest acres fell to 83.1 million from 86.5 million. With that reduced area, production was forecast to slip to 15.040 billion bushels from 2023/24’s 15.342 billion.

At 12.555 billion bushels, total domestic use was nudged up from this year’s 12.455 billion. Exports were little changed with 2.150 billion bushels in 2024/25 from 2.100 billion. This is projected to push up ending stocks to 2.532 billion bushels from 2.172 billion.

U.S. wheat was set to see reduced planted acres in 2024/25 at 47.0 million versus 49.6 million. However, harvested acres are expected to increase to 38.4 million from 37.3 million. Yields were set at 49.5 bu./ac. compared to this year’s 48.6.

There’s to be a slight decrease in wheat’s total domestic use at 1.134 million bushels, from the 1.144 billion in 2023/24. Exports for the coming year were pegged at 775 million bushels versus 725 million. The carryout is to grow to 769 million bushels from 658 million.

“That’s pretty big yields in terms of corn and beans,” commented Burnett, noting the overall effect of the Outlook Forum’s report was bearish.

— Glen Hallick reports for MarketsFarm from Winnipeg. 

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World grain supplies are becoming more comfortable after tightening due to the war in Ukraine, a major corn and wheat producer, and unfavorable crop weather.

A record U.S. corn harvest last year and lackluster U.S. export sales have contributed to growing stockpiles, and pushed corn futures prices to three-year lows in a blow to farmers.

“Stocks are building in the U.S. and the world instead of shrinking,” said Don Roose, president of brokerage U.S. Commodities in Iowa.

U.S. corn stocks of 12.169 billion bushels on Dec. 1 were up 12.5 per cent from a year earlier, when stocks set a nine-year low for that date, USDA data show. They exceeded analysts’ estimates for 12.05 billion bushels.

Globally, the amount of corn left at the end of the marketing year is projected to hit a six-year high in 2023/24, after setting a two-year low the previous year and six-year low in 2020/2021, according to the USDA.

“There’s plenty of corn out there,” said Len Steiner, principal of food consultancy Steiner Consulting Group.

For wheat, U.S. stocks increased to 1.410 billion bushels as of Dec. 1, the largest since 2020 and above analysts’ expectations for 1.387 billion bushels. A year earlier, stocks were about 7 per cent smaller and hit the lowest level for Dec. 1 since 2007, according to the USDA.

The USDA raised its estimate for global wheat ending stocks from December, though they remain at an eight-year low. The government also projected all U.S. winter wheat seedings for the 2024 harvest will fall 6 per cent to 34.425 million acres.

Bigger-than-expected crop inventories added pressure on grain prices, which extended recent declines. Corn futures hit their lowest level since December 2020 at the Chicago Board of Trade and soybean futures Sv1set their lowest since November 2021 after the USDA raised yield numbers for the now harvested U.S. crop.

The USDA said U.S. soybean stocks on Dec. 1 were 3 billion bushels, down from 3.021 billion a year earlier and the lowest since 2020. Analysts had expected 2.975 billion bushels.

The USDA separately cut its soybean production estimate for Brazil by 2.5 per cent to 157 million metric tons, below last year’s record crop of 160 million tons. Hot, dry weather hurt farms in parts of Brazil, the world’s top soybean exporter, and some analysts said USDA’s forecast is still too high.

–Additional reporting for Reuters by Karl Plume.

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Jim Beusekom, president of Market Place Commodities in Lethbridge, Alta., said barley is trading in a range between C$310 to C$315 per tonne. Meanwhile, U.S. corn imports are trading at C$310 to C$320. However, Beusekom noted that corn is more often trading at the lower end of the range and it’s easier for feedlots to buy corn than barley.

“The reason (corn is trading lower) is the Canadian dollar has moved to just shy of 76 U.S. cents. That means bringing in U.S. commodities is cheaper now than it was several weeks ago,” he said.

Beusekom added that supplies are very good for feed grains, as most feedlots have already contracted grain for up to May.

“This happened the past summer when drought was at its worst. You couldn’t buy grain from Canadian farmers. They weren’t sure what they were going to have,” he said. “Feedlots loaded up on U.S. corn to ensure they had feed for their cattle that were going to come in during the fall and winter. And the result of it is a lot of the market share has gone to U.S. corn.”

Corn and barley will continue to be priced near equally going into 2024, according to Beusekom, but he noted the latter will need to be priced lower in order to increase demand by this spring.

Looking back at 2023, with the exception of summer when drought affected parts of the Prairies, Beusekom said feed grain prices were in an overall downturn.

“It was more in line with a lot of major commodities around the world,” he added. “We close out the year maybe more in a sideways trading pattern; no longer in a decisive downtrend. But that doesn’t mean you start going back up right away.

“Those that sold their grain early are doing a lot better than those who are holding on to it right now.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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Harakal pointed to the ongoing imports of corn from the United States, as it’s cheaper than domestic feed barley or wheat.

“The biggest thing is they have corn contracts all the way up to spring,” she commented.

Another factor she cited was the mild fall/early winter the Canadian Prairies have been experiencing, noting the feedlots don’t have to provide as much in rations for the cattle, thus reducing demand.

Harakal quoted C$305 to C$310 per tonne for December delivery for feed barley going into Lethbridge. Those prices nudged up to C$310 to C$315/tonne for January-February delivery into feedlot alley.

Prices for feed barley for the week ended Dec. 13 were steady to lower, according to Prairie Ag Hotwire. Alberta saw the largest decline, down 33 cents per bushel at C$5.32 to C$7.08/bu. delivered. In Manitoba, prices eased back seven cents at C$5.75 to C$5.84/bu., while they held firm in Saskatchewan at C$5.50 to C$5.75/bu.

It’s a similar story for feed wheat, with a decline of 27 cents in Alberta at C$6.80 to C$9.39/bu. delivered, and down 12 cents in Manitoba at C$7.82/bu. Meanwhile prices were unchanged in Saskatchewan at C$6.80 to C$8.88/bu.

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