Tighter margins are expected in 2024 for corn, soybeans, and wheat as commodity prices are forecast to be lower and input prices are expected to be flat.
Growing demand for sustainable biodiesel fuels will slow soybean price declines relative to the decline in corn prices.
Expect more acres planted to soybeans and fewer acres planted to corn and wheat.
2024 Corn, Soybean and Wheat Situation
Last year’s harvest saw bountiful production of the major U.S. grain crops. Production was driven by more planted acres of corn and wheat combined with forecasts of higher yields in corn, soybeans, and wheat.
On the demand side, exports were up year over year as the South American crop was lower than expected because of drought conditions. Crop prices were all lower by the end of last year relative to 2022. However, they were still above the pre-pandemic lows and above the reference prices in the farm bill safety net. Despite decreases in fertilizer, pesticides, and fuel prices, production expenses were up because of increases in labor, seed, interest, and rents. All these factors resulted in tighter margins and forecasts of lower net farm incomes.
Looking ahead to 2024, margins will be even more concerning for grain producers with lower price expectations and lingering high input costs.
Corn
The United States planted 94.9 million acres of corn in 2023, which was the highest number of acres planted in the past decade. Higher U.S. corn yields were predicted in 2023 at 174.9 bushels per acre. If realized, total U.S. corn production will reach a record-high 15.2 billion bushels. Projected ending stocks for the 2023–2024 marketing year are up 770 million bushels from 2022 to 2.1 billion bushels in 2023. U.S. corn exports are an important component of demand. For the 2023–2024 marketing year, around 2.1 billion bushels of U.S. corn are estimated to be exported to foreign markets, up 439 million bushels from 2022.
Georgia producers planted 500,000 acres of corn, 17.6% more than in 2022. Yields were forecast at a record 183 bushels per acre. If realized, Georgia’s corn production will be the highest it has been in over 15 years. With the large U.S. supply, prices are expected down in 2024. Based on futures prices at the writing of this article and a positive historical local basis, expected corn prices in Georgia will likely average $5.40 per bushel in 2024.
Soybeans
U.S. planted acres in 2023 were down 4.4% to 83.6 million acres. With forecast yields up slightly at 49.9 bushels per acre, the U.S. soybean crop was estimated to be 4.13 billion bushels, down just 3.3% from 2022. On the usage side, soybean crush was up 88 million bushels to 2.3 billion, and exports were down 167 million bushels to 1.8 billion, leaving the total soybean use down 119 million bushels to 4.2 billion for 2023. U.S. ending stocks were tight in 2023, at 245 million bushels, down 8.5% from 2022. Lower ending stocks combined with growing demand for sustainable biodiesel indicate the United States may need more supply of soybeans. U.S. planted acres are likely to go up for soybeans in 2024.
Georgia growers planted fewer soybean acres in 2023 at 160,000 acres. Yields were projected to be level at 41 bushels per acre. In Georgia, growers generally see a positive local basis for soybeans. Based on futures prices and a positive historical local basis, expected season average soybean prices in Georgia likely would be around $12 per bushel.
Wheat
For 2023, the ongoing Russia-Ukraine war and conflicts in the Middle East will continue another year of tight world wheat supply. World wheat production is projected down in the 2023–2024 marketing year to 28.8 billion bushels, which is 411 million bushels short of the projected demand of 29.2 billion bushels. World wheat ending stocks are estimated at 9.5 billion bushels, the lowest since the 2015–2016 marketing year.
U.S. wheat production for 2023–2024 was projected to be 1.8 billion bushels, up for the first time in 3 years because of more planted acres and higher yields. Georgia wheat production, forecast at 4.7 million bushels, continued trending down on fewer planted acres and lower yields. Planted wheat acres in the United States were up about 3.8 million acres from 2022–2023 to 49.6 million acres in 2023–2024. U.S. ending stocks are projected to be just under 659 million bushels, up 77 million from 2022–2023. Georgia farmers are estimated to have planted 195,000 acres; 2.5% fewer than last year. Georgia growers generally see a negative basis for wheat. Based on futures prices and a negative historical local basis, expected season average wheat prices in Georgia likely would be around $6.40 per bushel.
Status and Revision History In Review on Jan 19, 2024 Published on Jan 22, 2024
Main Takeaways. Tighter margins are expected in 2024 for corn, soybeans, and wheat as commodity prices are forecast to be lower and input prices are expected to be flat. Growing demand for sustainable biodiesel fuels will slow soybean price declines relative to the decline in corn prices.
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.
The all wheat yield for 2024/25 is projected up two percent from last year at 49.5 bushels per acre and is based on a long-term linear trend. After six years of successive reductions, beginning stocks are forecast to increase in 2024/25 to 658 million bushels, an increase of 15 percent from the previous year.
The U.S. planted a lot of corn last year, creating a more bearish market with an estimated 2 billion bushels in ending stocks pulled over into 2024 with a 15% stocks-to-use ratio. Soybeans, on the other hand, are seeing tighter stocks with only 240 million bushels carried over from 2023.
Cash receipts for crop and livestock sales are expected to move from $507 billion in 2023 to $486 billion in 2024 for a loss of $21 billion (4%). The forecast decline in crop receipts explains nearly 80% of this difference, signaling a weaker incoming year for row crop prices.
Lower ending stocks combined with growing demand for sustainable biodiesel indicate the United States may need more supply of soybeans. U.S. planted acres are likely to go up for soybeans in 2024.
The average cost of production for corn drops just 6.2% from 2022 to the 2024 forecast, while the market year average price for corn drops 32%. The latest USDA projections for corn include a record yield and the third-highest production, despite a forecast drop in acres.
WASHINGTON, March 28, 2024 – Producers surveyed across the United States intend to plant 90.0 million acres of corn in 2024, down 5% from last year, according to the Prospective Plantings report released today by USDA's National Agricultural Statistics Service (NASS).
Corn used for ethanol production is raised by the same volume and is expected to reach 5.4 billion bushels. The 2023/24 season-average farm corn price is lowered by $0.05 per bushel to $4.70 per bushel.
The 2023/24 U.S. soybean ending stocks estimate is raised to 340 million bushels on lower soybean exports. The soybean export forecast is reduced to 1.7 billion bushels on reduced soybean commitments and strong competition from South America.
The average price for soybeans was $12.90 per bushel in 2023, according to USDA. FAPRI is projecting a roughly $2 price decrease per bushel to $10.94 per bushel in 2024.
Still, soybean fundamentals are more positive than the supply and demand outlook for corn. Soybean export demand improved as the 2023/24 marketing year started, and expanded crush capacity helped domestic demand set new records late in the old-crop marketing year.
The USDA report says total production expenses are forecast to increase by 3.8% in 2024 with labor being one of the biggest increases at 7.5%. Additional increases include marketing, storage and transportation at 12%, and cost of pesticides at 7.2%, according to the market intel from AFBF.
Climate change may affect the production of maize (corn) and wheat as early as 2030 under a high greenhouse gas emissions scenario, according to a new NASA study published in the journal, Nature Food. Maize crop yields are projected to decline 24%, while wheat could potentially see growth of about 17%.
On Nov.16, 2023, President Biden signed into law H.R. 6363, the Further Continuing Appropriations and Other Extensions Act, 2024, which extended the Agriculture Improvement Act of 2018, more commonly known as the 2018 Farm Bill.
The average price for soybeans was $12.90 per bushel in 2023, according to USDA. FAPRI is projecting a roughly $2 price decrease per bushel to $10.94 per bushel in 2024.
The 2023/24 U.S. soybean ending stocks estimate is raised to 340 million bushels on lower soybean exports. The soybean export forecast is reduced to 1.7 billion bushels on reduced soybean commitments and strong competition from South America.
Soybeans. Soybean prices incurred minor losses of around 0.25% as South America's harvest moves closer to the finish line, and with U.S. plantings just getting started. May futures dropped 3.5 cents to $11.5925, with July futures down 2.75 cents to $11.77.
According to the USDA report, world soybean production, which was 360 million tons in the 2021/22 season, was 374 million tons in the 2022/23 season. USDA's forecast for the 2023/24 season is 399 million tons, that is, an increase of 25 million tons.
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