After soaring to sky-high levels following Russia’s invasion of Ukraine, U.S. corn, soybean, and wheat prices are coming back to earth as supplies expand worldwide, said the Agriculture Department. The average price for corn this marketing year will be 27 percent lower, wheat 18 percent lower, and soybeans 10 percent lower than last season, said USDA analysts in a new look at global supply and demand.
The USDA lowered its price forecasts as part of a handful of reports that said the U.S. corn and soybean harvests were bigger than previously estimated and so were the domestic stockpiles of corn, wheat and soybeans. Futures prices for the three crops fell under the weight of the reports on Friday. One trader likened the reports to a bombshell.
Corn, soybeans, and wheat are the foundation of the U.S. food supply since they are consumed directly, used as ingredients in prepared foods, or fed to livestock to produce meat, eggs, and dairy. They also are an important part of the farm economy; they are planted on seven of every 10 acres sown to the two dozen principal U.S. crops. Corn and soybean oil are used in making motor fuel, too.
Wheat sold for $8.83 a bushel, its highest U.S. season-average price ever, during the 2022/23 marketing year and was forecast to average $7.20 a bushel this year. After averaging $6.54 a bushel last season, U.S. corn would sell for $4.80 this marketing year and soybeans would average $12.75 this year, compared to $14.20 in 2022/23, said the USDA.
Corn production was a record 15.34 billion bushels, up marginally — 108 million bushels — from the previous forecast and 1.3 percent larger than the 2016 crop of 15.15 billion bushels. The soybean crop of 4.17 billion bushels was 36 million bushels larger than previously forecast, said the USDA.
With abundant early-season rainfall, Argentina doubled its soybean production, to 50 million metric tons. “Conversely, soybean production for Brazil is forecast at 157.0 million tons, down 4.0 million from last month and 3.0 million from last year’s record crop of 160.0 million,” said the USDA. Some private forecasters say that, due to drought, Brazil’s crop will be smaller still.
“Despite disruptions, importer purchasing remains strong,” said USDA’s Foreign Agricultural Service in a discussion of the impacts of drought on Panama Canal traffic and attacks by militant on ships using the Suez Canal. At the end of 2023, sales and shipments of U.S. corn for 2023/24 delivery were 39 percent higher than the same point in 2022/23 “and stable around the 5-year average,” said the agency.
Farmers sowed 34.4 million acres of winter wheat for harvest this spring and summer, down by 6 percent from the 2023 crop, said the USDA, based on an annual survey of growers. Plantings in Kansas, the No. 1 state for winter wheat, were down by 7 percent, to 7.5 million acres.