Crop prices affect all farmers — big and small, growing crops or livestock. In early July, the U.S. Department of Agriculture’s WASDE report showed that the anticipated 2024 corn price is down to $4.30 per bushel. Soybeans also went down, now estimated at $11.10 per bushel.
Although corn and soybean predictions are down from the June WASDE report, these prices are still much higher than farmers are trading at at this moment.
There are many factors contributing to this, and a lot of reactions to the recent report.
If you break down the USDA’s Secretary’s Briefing on the WASDE report, you’ll see that there’s been a huge increase in U.S. feed and domestic use, as well as exports from the U.S. since the June report. An increase in usage of 75 million bushes in each of these areas is substantial, but it’s an even bigger deal considering that the ending stocks for 2023 corn are still high 00 an estimated 1.877 billion bushels are still sitting in bins around the U.S.
Taking a look at the USDA’s National Agricultural Statistics Service, 2023 was a record year for corn production, which explains why we are starting the 2024 harvest season with so much old stock.
Given that we have so much old corn left in supply and the U.S. — along with many other parts of the world — is anticipated to have another record year for corn production in 2024, it would be easy to jump to the conclusion that the demand cannot keep up with the supply for corn, but there are many factors contributing to the current predictions.
Here’s what we know:
If the recent increase in U.S. corn demand continues, we will have a high supply and perhaps an even higher demand, obviously driving up prices.
Acres of corn planted in 2024 is 91.5 million acres, which is 3 percent less acreage than 2023, according to the NASS. Even still, the USDA estimates an increase in bushels to the acre.
Here’s what might interfere:
The world is seeing many conflicts in 2024, one being the war between Ukraine and Russia, but also many growing political conflicts between countries (such as the U.S. and China) and political conflicts within countries, such as the looming recession in Argentina, and a very dicey election in the U.S. These conflicts cause uproar in the country, which may lead to lessened ability to produce crops, and these conflicts cause countries to be more picky when it comes to importing and exporting goods.
The election in the U.S. disrupts prices every year, no matter how tense the election may be. Farm Progress published its findings on how corn prices can predict the president in 2016 after Donald Trump had won the election that year. That outlet noted that if corn prices go down between September and election day, that means that we either will keep the current political party in office, or we’ll have a Democratic winner. But if corn prices head up between September and election day, we’ll see a new Republican in office.
Weather conditions have been close to perfect across the U.S. for growing a good corn crop, but we’ve had our fair share of storms so far. The National Oceanic and Atmospheric Administration predicts that the United States will see 17 to 25 major storms this year, with at least eight of them being strong enough to receive a name.
There has also been crop damage due to flooding, wind, and hail so far across the nation in 2024, but it doesn’t seem to have made a dent in yield projections so far.
It’s never easy to predict the future price of any commodity, let alone with so many things happening in the world right now. Although the predictions from the WASDE report have little wiggle room for argument, the market did not react very much to the recent report.
It’s hard to say what will happen with corn prices, but it’s easy to say that crop farmers should get a little skin in the game if you aren’t currently taking advantage of market prices!
If you are interested in being able to take advantage of futures prices, and want to market more of your commodity, whether it’s grain, milk or livestock, there are many companies — such as Top Third Ag Marketing and Ever.Ag — that are great resources and eager to help you.
If you feel more confident in your trading abilities, but still need a little guidance, check out the CME Group education page. There you can take courses to learn about different types of future trading, you can gain a better understanding of where markets are moving and why, and you can even use their trading or strategy simulators so that you can take the risk without having to pull out the check book.
Elizabeth Maslyn is a born-and-raised dairy farmer from Upstate New York. Her passion for agriculture has driven her to share the stories of farmers with all consumers, and promote agriculture in everything she does. She works hard to increase food literacy in her community, and wants to share the stories of her local farmers.