Posted on March, 18, 2025 at 09:54 am
The U.S. Department of Agriculture’s January World Agricultural Supply and Demand Estimates report helped fuel a corn and soybean price rally by cutting the estimated production of the respective crop sizes more than anticipated. South American crop production worries contributed to the concerns about the tightening of world’s supply of corn and soybeans.
Was the New Year’s optimism misguided?
U.S. corn and soybean exports kept up a strong pace in the first half of the marketing year. In February 2025, non-commercial traders increased their net long position on May corn futures past the impressive 400,000 contract level. These factors helped buoy July 2025 corn futures prices by more than 20 percent from the October 2024 harvest lows.
Many producers used this significant rally to make catch-up corn and soybean sales for the 2024 crop in storage. Others were starting to hedge some of 2025 new crop as that traded near their break-even cost per bushel projections. The 2025 crop insurance guarantee also captured some of the higher corn pricing and ended up with a Revenue Protection price of $4.70 per bushel on corn, which is up slightly from last year. Soybeans ended up at $10.54 for a revenue guarantee, down just over $1 per bushel from last year, but up significantly from the 2024 bottom. The March 31 USDA planting intentions report will indicate if these price trends and revenue guarantees have producers gearing up to plant more corn.
How did the prices fall so fast?
We are less than two months into the new year and corn and soybean futures have taken a round trip nearly all the way back to where we started. Let’s look at some current worries that have monkey hammered these prices of corn and soybeans downward.
I have heard it argued that tariffs could help negotiate higher prices for our exported crops, yet others have said the retaliation by our trading partners will curb our exports. While the final outcome is yet to be seen, it is relatively certain that tariffs are adding to the volatility right now.
Also, South American weather concerns that were on the table earlier in the year are now easing as agreeable weather for harvesting soybeans and planting the safrinha corn crop is taking some of the premium out of the market.
Even our most reliable user of corn in the last several years, ethanol, now may be running out of steam. Ethanol stocks are very high compared to the last several years, worrying the producers of ethanol and the farmers that sell their corn to the industry. A large ethanol plant in southern Minnesota has even been idled due to current market conditions. The ethanol industry’s vitality and production grain farmer’s success are intertwined. Finally, the February USDA Agricultural Outlook Forum discussed large production numbers for corn and soybeans for the 2025 crop year that may be weighing on the market.
What is ahead?
If you still have unsold grain in storage or didn’t sell as much on the last rally as you would have liked, you still have the seasonal corn price trends in your favor to make catch-up sales. May and June are excellent months to sell grain and forward contract — including new crop.
But now is the right time to start planning to sell into the next market rally.
Many producers miss the best prices of the season simply because they haven’t conceived a solid plan to sell with bushel and price targets. A planting rally, abnormally hot and dry conditions, or even new trade commitments can lead to a market rally to help sell at a profitable level. Use your crop insurance to give you confidence to make the sales with the assurance that you will capture some of the lost bushels back as revenue.
If you purchased add-on products with your Compeer crop insurance, such as the Enhanced Coverage Option, it can give you confidence with the additional guarantee while you wait for the next price rally.
Compeer Financial is a member-owned Farm Credit cooperative serving and supporting agriculture and rural communities. The $30.4 billion organization provides loans, leases, risk management and other financial services throughout 144 counties in Illinois, Minnesota and Wisconsin.
Source: The Land