Monthly Grain Market Outlook

Nate Bruce, Farm Business Management Specialist,

Corn prices traded in the $4.50 – $5.00 range throughout the month of August. December corn bottomed out at $4.75 early in the month, only to experience a rally later in the month due to drought conditions impacting waterways vital to grain shipping. The ProFarmer Crop tour estimated the corn yield per acre slightly lower than USDA’s projection at 172 bushels per acre versus USDA’s estimate of 175.1 bushels per acre. However, the ProFarmer Crop tour has also been lower than USDA’s August yield 15 times out of the last 20 years. The results of the tour are nothing to get too bullish about. Soybean prices continued to rally over the month of August. The ProFarmer Crop tour estimated the total corn production will be 14.960 billion bushels, which is slightly lower than the USDA estimate of 15.111 billion bushels. Soybean demand continues to grow but questions exist about supply, both from lower-than-expected acreage this year and domestic carryout to next year. The margin for error is tight with soybeans and the prospect of lackluster soybean yields are sending market prices soaring. Chinese export demand has picked up recently too, however this could have a negative impact long term if US yields encourage large Brazilian plantings to meet international demand. The ProFarmer Crop tour also estimated soybean yields slightly lower than USDA’s projection at 49.7 bushels per acre versus the USDA August estimate of 50.9 bushels per acre. The ProFarmer Crop tour estimated total soybean production at 4.110 billion bushels versus USDA’s estimate of 4.205 billion bushels. Throughout the ProFarmer Crop tours history, the estimated yield of the tour has only differed from September yields by an average of 0.8 bushels. That is quite impressive, and very rarely is the tour far off. Wheat prices retreated over the month of August with July 24 Wheat (ZWN24) dropping below $7.00 per bushel. Historically, wheat prices have contracted during the month of August and even with market volatility this remained the case.

The August USDA World Agriculture Supply and Demand Estimates Report (WASDE) estimated corn ending stocks decreasing by 2.65% from the July 2023/24 outlook estimate from 2,262 million bushels to 2,202 bushels due to reduced production. The August USDA WASDE report estimated decreased production, down by 209 million bushels, due to warm weather in the Midwest at the end of July. The August USDA WASDE report also reduced feed and residual demand, exports, and food and industrial demand. Beginning stocks for corn increased by 3.92% from 1,402 million bushels to 1,457 million bushels. The corn season-average farm price per bushel increased slightly by $0.10 per bushel from $4.80 per bushel to $4.90 per bushel. The August USDA WASDE estimated soybean ending stocks decreasing by 18.33% from the July 2023/24 estimate from 300 million bushels to 245 million bushels. The USDA WASDE report estimated increased beginning stocks from the July 2023/24 outlook estimate increasing from 255 million bushels to 260 million bushels. Production, supply, exports, and use all decreased from the July report. The August report reduced soybean yields from 52 bushels per acre to 50.9 bushels per acre. The soybean season-average farm price per bushel increased from $12.40 per bushel to $12.70, due primarily to decreased estimated production. The August USDA World WASDE estimated wheat ending stocks increasing by 3.88% from the July 2023/24 outlook estimate from 592 million bushels to 615 million bushels. The August WASDE reduced production, supply, food demand, domestic demand, exports, and total use from the July estimate. The August report reduced the estimated yield per acre from the July estimate by 0.3 bushels from 46.1 bushels per acre to 45.8 bushels per acre. The wheat season-average farm price per bushel remained unchanged at $7.50 per bushel. The next USDA WASDE report will be released on Tuesday September 12th.

Since terminating the Black Sea grain corridor agreement, Russia targeted attacks on Ukrainian grain export facilities and alternative export routes such as through neighboring Romania. Questions exist on how this year’s production will make it out of the country and impact global grain supplies. Despite the war, Ukraine still accounted for sixth of the global corn trade in 2022-23. Any reduction of Ukrainian grain exports could have a drastic impact on global food supplies. The Ukrainian conflict continues to impact grain exports. Brazil is readying to overtake the US as the world’s top corn exporter by making large scale investments in trade infrastructure. Brazil, which produces three corn crops per year, has been aided by trade agreements with China. In the past, infrastructure has limited the countries’ ability to export grain. The country has made major investments in northern export ports, opting to fill global grain demand when disruptions occur in the marketplace. By making investments in export infrastructure, Brazilian grain will be cheaper to reach the global marketplace. Domestic farm incomes have already started to suffer due to increased competition from the South American country. Plantings of America’s most widely grown crop, corn, could also decrease in the years to come as a result. China’s northeastern region, which produces almost 30% of China’s domestic grain production, has experienced severe rain and flooding this past month, potentially hindering production.

Corn Futures

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Soybean Futures

9-1-2023 Soybeans September 20239-1-2023 Soybean Futures November 20239-1-2023 Soybean Futures January 2024

Wheat Futures

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