August crop reports: Rain makes lower 2024-2025 prices

Rain makes grain, and two mid-August Department of Agriculture reports offered this year’s first in-the-field look at just how much corn, soybeans and wheat — as well as other crops like sugar and cotton — American farmers will grow this wet, grain-making year.

On Aug. 12, USDA estimated that the 2024 U.S. corn crop would total 15.1 billion bushels, a small decline from a year ago, but still the third largest crop ever.

A record per-acre national yield, pegged at 183.1 bushels, is almost 6 bushels more per acre than in 2023.

High production usually means low prices and USDA estimates the 2024-2025 corn crop’s average price will slump to $4.20 per bushel, 45 cents per bushel lower than the about-to-end current crop year and a wallet-thumping $2.34 per bushel under 2022-2023′s average of $6.54.

Bigger production also means bigger ending stocks, but falling prices can trim the rising stockpile if they spur new buying. USDA does not see that happening in the coming year.

Worse, ethanol makers will use the same amount of corn this year as last, 5.45 billion bushels, while exports will climb an almost imperceptible 50 million bushels.

That means ending corn stocks a year from now will be 2.07 billion bushels, or 10% more than today. That’s a tough hill for weakened prices to climb.

The coming soybean crop, according to USDA bean counters, will be a whopper: Total 2024-2025 U.S. soy production will set an all-time record, 4.6 billion bushels, or 10% over a year ago. Estimated national yield per acre will also be a whopper: 53.2 bushels.

But the staggering crop will bring a price-busting carryover of 560 million bushels, or almost 220 million bushels more than this marketing year, and a projected $10.80 per-bushel average price, $1.70 under the current year’s average and a jarring $3.40 per bushel less than two years ago.

A key part of that price drop hinges on continued increases in global oilseed production, notes USDA.

Worldwide, soy and rapeseed production will increase an estimated 4.5 million tons — mostly due to acreage increases in Russia, Ukraine, India and west Africa’s ag-dominated Benin. That anticipated production is already knee-capping U.S. prices.

U.S. wheat producers face the same hill as corn and soybeans despite fewer 2024 planted acres. Better yields, however, kicked production to 2 billion bushels, or about 170 million bushels over a year ago.

That boost — as well as growing global competition — means U.S. wheat stocks will again build as prices continue to slip throughout the coming year.

For 2024-2025, USDA sees all U.S. wheat prices averaging $5.70 per bushel, or about $1.25 less per bushel than a year ago.

Rain also makes sugar, both cane sugar in the Deep South — principally Florida, Texas and Louisiana — and beet sugar in the High North, mostly in Minnesota and North Dakota. Collectively, USDA estimates total 2024-2025 sugar production at 9.5 million short tons.

Cotton, too, will see a steep increase in production, up an estimated 3 million 480-pound bales, or a whopping 25% this year over last.

Since American cotton mills are few and far in between, USDA foresees 12 million bales — out of this year’s 15-million-bale crop, or 80% — will be exported. Stocks, however, will build to keep prices flat.

What this year’s wet weather can’t grow, however, is more income. In February, USDA projected 2024 U.S. net farm income at $116 billion, or 25% below 2023′s take.

These August production and usage estimates strongly point to that number draining even lower when USDA revises its farm income estimate Sept. 5 — proving once again that when it rains, it pours.