When I was a kid a long – very long – time ago, the farmers at Sunday church suppers were easy to spot, thanks to accidents from corn-pickers, augers and other machines.
Fortunately, even noise protection is standard operating procedure these days. And it’s time to grab some protection to guard against the racket starting to build in the market.
Some of the clamor is normal as the growing season gets underway. But much of the distraction comes from non-agricultural traders throwing spitballs in the hope that something will stick.
While a phone call between President Trump and Chinese leader Xi about tariffs could affect U.S. exports of soybeans and other crops, a dispute with the world’s richest man really doesn’t have much to do with the price of corn. But when a fund manager needs an explanation, a social media dustup about budget deficits and tax rates will do, even if it distracts you from the real prize – pricing your production at a profit.
Barring new developments on tariffs or trade, the next inflection point for the markets comes June 12 when USDA updates World Agricultural Supply and Demand Estimates. While near-record new crop production could swell supplies, rallies to $5 corn and $15 soybeans are still possible, if less likely.
Crops look OK
June WASDE reports are a bit of a placeholder. They’re in-betweens – the report covers the last three months of the 2024-25 old crop marketing year while also updating the first monthly projections for 2025-26, which were published in May. The new crop numbers are hypothetical on the supply side, using end of March acreage data and “normal” yields based on historical trends and average planting conditions. While fieldwork is behind in the eastern Midwest, delays likely aren’t significant enough to force USDA’s hand before the June 30 Acreage and Grain Stocks reports.
Condition ratings included in the weekly Crop Progress have just begun. Their correlation with soybean yields is already statistically significant – that is, not the result merely of chance – and will gain that status for corn before the end of the month.
This analysis points to corn yields of 184.1 bushels per acre, with soybeans at 53.4 bpa. Without massive last-minute acreage shifts caused by weather or economics, corn production could reach just under 16 billion bushels, 270 million more than in the May WASDE.
Soybean production of 4.4 billion would be the third biggest crop ever, just behind 2018 and 2021.
Prices are cheap
As the WASDE moniker suggests, supply is the first part of the equation for figuring prices. Lumping together imports, production and leftovers from the previous crop as of Aug. 31, USDA put 2024-25 crop carryout at 350 million bushels, which seems close to the mark.
The question mark is exports, which could turn out as much as 125 million more than USDA’s tepid May projection of 1.815 billion. China could be the wild card with sales – duh! If Xi opens the door fully it could add a buck a bushel to average cash prices.
USDA’s May WASDE put 2025 crop corn ending stocks at 1.8 billion bushels. Exports and diversion to feeders may be a little weaker than the government said last month, but that could be offset by more robust consumption by ethanol plants. Production of the biofuel is tracking stronger, but consumers must juggle petroleum costs with summer vacation plans. Will long road trips burn lots of gasoline and increase blending, or be cut short as anxious consumers stay closer to home?
If drivers hit the open roads – and load up on burgers from corn-fed cattle – it could add 50 cents to prices.
Still, corn would be cheap. Here’s why:
- USDA put the average old crop cash price at $4.35 in its May WASDE.
- It’s too late in the marketing year to jack this up much.
- New crop came in at $4.20.
- This also should not change much for now.