USDA’s Annual Ag Outlook Forum delivered the first unofficial look at the 2024/25 marketing year for grains and oilseeds. The next update will come in the May World Ag Supply and Demand Estimates.
Between now and then, USDA’s Prospective Plantings Report on March 28 will update 2024 U.S. acres. We will gain a much better understanding of South American production, which will allow fine-tuning of demand estimates. U.S. weather trends and the start of planting in the Midwest will also help determine if trend-line yield projections are realistic.
But until that May report, here are the dominant themes impacting the corn and soybean markets.
Corn plantings are projected at 91 million with soybean plantings at 87.5 million acres. That’s 178.5 million acres combined, compared to last year’s 178.2 million. Corn acres are down 3.6 million with soybean acres up 3.9 million from 2023. Corn got a head start last fall, and 92 million is likely a foundation for 2024 acres, especially if this planting season starts early.
The national average corn yield is projected at 181 bu. per acre. That’s an adjusted trend-line yield and is down from the 181.5 bu. projected at the 2023 Ag Outlook Forum. The projection includes the assumption of normal weather conditions for spring planting and summer crop development. Yield reached a record 177.3 bu. per acre in 2023 with some difficult conditions in the western 50% of the Corn Belt. “Normal weather” might be all it takes to launch yields well past trend line.
The national average soybean yield is projected at 52 bu. per acre.
The projected total supplies from 2024/25 are 17.24 billion bushels of corn and 4.84 billion bushels of soybeans. The market’s job is to find a way to use as many of those bushels as possible. Unfortunately, that will be a weight on prices.
Corn ending stocks for 2024/25 are projected at 2.53 billion bushels, with soybeans at 435 million bushels. Corn stocks-to-use would be 17.2% and soybeans 9.9%. Neither stocks-to-use ratio is price friendly. USDA projected the 2024 national average corn price of $4.40 with soybeans at $11.20.
Longer-Term Forecast
2024/25 carryovers will become 2025/26 beginning stocks and old-crop bushels carried into a new-crop marketing year are a supply-side cushion. Corn beginning stocks might represent as much as 15% of the expected 2025 corn crop, while soybean beginning stocks could be as much as 10% of the expected soybean crop. It seems beginning stocks are snowballing, making the market less sensitive to crop threats.
A short-crop in the U.S. is the most likely “quick fix” for the situation, but if Brazil’s crop problems do turn into more demand for U.S. corn and soybeans by early summer, risks to 2024 crops will be back on traders’ must-watch list.
