April 4, 2025 | 08:46 GMT +7

  • Click to copy
Friday- 21:12, 01/12/2023

US soybean ledger oddly tight versus corn, acreage shift may correct

(VAN) It is rare that U.S. corn supplies build in a marketing year while soybean supplies slip, but that is exactly what is happening in 2023-24, keeping soybean prices relatively elevated versus corn.

U.S. corn and soybeans experience the same summer weather each year, which is why supplies of both tend to move in the same direction. Conditions were imperfect this summer and yields have disappointed versus prior expectations, but a decade high in corn acres helped pull off the record crop.

The U.S. Department of Agriculture pegs total U.S. corn supplies in 2023-24 to rise 10% on the year, while soybean inventory is seen shrinking 3%. The most recent similar instance is 2007-08, when U.S. farmers were incentivized to plant more corn based on new renewable fuel mandates related to corn-based ethanol.

The 2007-08 rise in corn and fall in soybean supplies was policy-driven, and the only other recent, directionally similar year was 2003-04, when the U.S. soybean crop fell victim to rare, widespread pest issues as well as dry weather.

But there were no such extenuating circumstances in 2023-24, suggesting market prices late last year and early this year were too heavily signaling for corn acres over soybeans. Corn plantings in 2023 reached nearly 95 million acres, about 5% more than the recent average.

A change is likely coming in 2024, though, as the biggest shifts in U.S. acres, specifically lower corn and higher beans, are observed following years with a significant jump in corn stocks. Some of these years include 2008, 2014 and 2017.

USDA’s long-term projections issued earlier this month suggest just that, pegging 2024 U.S. corn acres at 91 million and soybeans at 87 million versus 83.6 million in 2023. However, those are similar to the early acreage placeholders of the last couple years, so their weight is questionable.

ACRES AND PRICES

High crop yields pad stockpiles, but acreage differences in recent years seem to have been the driving force when it comes to the actual supply impacts. That has tightened the soybean situation as the market has been more optimistic about the oilseed than the U.S. farmer.

In the last six years, the pre-planting March trade estimates for U.S. soybeans overshot the actuals by a combined 22.2 million acres, which is worth about 1.1 billion bushels of production if using a conservative 50 bushel-per-acre yield. Ten million of those acres were in 2019 alone.

That compares with predicted 2023-24 U.S. soybean ending stocks of 245 million bushels.

Corn has also lost acres in the last six years relative to original market expectations but only by a net sum of 5.2 million acres, worth about 840 million bushels with a conservative yield of 176 bpa. U.S. corn ending stocks in 2023-24 are seen at 2.16 billion bushels.

Interestingly, USDA in the couple of years leading up to 2007-08 had also overestimated U.S. soybean acres in March and undershot corn.

But soybean acres could have their year in 2024 as Chicago soy futures, both nearby and deferred, are trading at the highest levels for the date versus corn in several years. Corn prices throughout 2023 have taken their biggest tumble in ten years.

The Crop Watch producer in North Dakota, an acreage swing state, says soybeans currently have a small profit advantage over corn for his 2024 plans. Soybeans also require fewer inputs, which the producer feels are too expensive versus the current price of corn.

The high U.S. corn, low bean supply scenario for 2023-24 could drift a bit more toward center as the marketing year’s end approaches in August. But any changes will likely have to wait until at least early next year as USDA does not typically make large U.S. revisions in its December report.

HD

(Reuters)

Banks see a dire climate future - and ways to profit

Banks see a dire climate future - and ways to profit

(VAN) The nation’s top banks are quietly advising their clients on how to build a financial life raft - or perhaps life yacht - from the wreckage of runaway climate change.

Conflict and rising food prices drive Congolese into one of the world's worst food crises

Conflict and rising food prices drive Congolese into one of the world's worst food crises

(VAN) From FAO Office in the Democratic Republic of the Congo.

Brazil faces inflation risks as surging corn prices eclipse rice plunge

Brazil faces inflation risks as surging corn prices eclipse rice plunge

(VAN) Corn prices in the Campinas region have surged past 90 reais ($15.80) per 60-kg bag, the highest nominal level in nearly three years, marking a more than 23% jump year-to-date, according to the widely followed Cepea index from the University of Sao Paulo.

Breaking cycle of forest land grabs

Breaking cycle of forest land grabs

(VAN) Thailand’s efforts to address landlessness among its population has been a priority for multiple administrations.

Engaging the next generation in the connection between forests and foods

Engaging the next generation in the connection between forests and foods

(VAN) FAO, together with the Government of Italy, and a forest expert and a master ice cream maker from Italy, educate young students on the significance of forest foods at FAO Park.

The glyphosate debate

The glyphosate debate

(VAN) The EU has recently approved the use of glyphosate for another decade. Bárbara Pinho examines the controversial pesticide’s presence in British farming and considers the possibility of a ban in the UK.

The spread of H5N1 highly pathogenic avian influenza calls for stepped up action, FAO says

The spread of H5N1 highly pathogenic avian influenza calls for stepped up action, FAO says

(VAN) Averting losses of hundreds of millions of poultry crucial to mitigate impacts on food security, nutrition and affordability of poultry products.

Read more