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What if 2024 corn and soy crops miss yield targets?

Ag Marketing IQ: Delayed planting decreases opportunity for grain crops to yield at trendline, but the market also needs strong demand to move the needle on price.

Jim McCormick, Hedging strategist

May 22, 2024

5 Min Read
Auger unloading corn at harvest
Getty Images/iStockPhoto/fotokostic

As we approach Memorial Day weekend, let's not forget the true meaning of this holiday. Originally known as Decoration Day, this federal holiday was established following the Civil War to honor Union soldiers who had died. It has since expanded to commemorate all American service members who have passed away in military conflicts.

At 3 p.m. local time, a national moment of remembrance takes place.

The weather over this weekend, which also unofficially signifies the beginning of summer, will be watched as this wetter-than-anticipated spring has hampered the ability to get spring crops planted at a timely rate in some states.

As of Sunday, 70% of the U.S. corn crop had been planted, advancing 21% for the week. This is just 1% below the 5-year average. However, taking out 2019 as an outlier, the five-year average moves up to 81%, which aligns with the 10-year average.

  • The Northern Plains made substantial advancements, and it is a race to get planted before the final crop insurance date for corn on May 25.

  • Iowa is the furthest behind pace (-8%). Based on the intentions report, Iowa has 2.8m acres remaining.

  • Illinois has the most significant volume remaining to plant at 3.6 million, followed by Indiana at 2.1 million.

Corn emergence was in line with the average of 40% for this time of year.


 Soybean planting progress remains ahead of pace, at 52% nationally, coming in 3% ahead of trade expectations and the average. With 26% of the crop emerged, soybeans are five points ahead of that average. Nebraska and Iowa are each furthest behind.

If we continue to experience delays, talk of prevented planting claims will build into late May and potentially into June. The later the crop gets planted, the lower the odds of hitting the trend line yield of corn (181 b/a) and soybeans (52 b/a).

Running the trendline numbers

The new crop corn balance sheet is much tighter than the soybean balance sheet. Therefore, any loss yield of the U.S. corn national yield will provide bullish fodder to the market.

If the national corn yield came in five bushels below the trend line yield of 181 bushels per acre, it would take 410 million bushels off the supply side of the balance sheet. Without any demand reductions, this would drop the U.S. corn carryout to approximately 1.7 billion bushels.

If the delayed soybean plantings were to take two bushels off the national bean yield, it would lower the national production by 171 million bushels. Without any demand adjustments, this lost production would drop the carryout of the U.S. soybeans to 274 million bushels (which would be considered not burdensome but not tight supply-wise either).


China on the soybean bench

We encourage producers/traders not to get too bulled up on the supply side of the balance sheet (as the lack of demand could more than offset supply losses).

Soybean exports remain more than pathetic as this week's shipments were reported below trade estimates and at a new marketing year low of 6.7 mbu. YTD inspections are at 1.461 billion bushels, down 18% from a year ago versus USDA's forecast of down 15%.

The Pacific Northwest has not shipped a bean to China since late March. But the rumor is that China purchased two cargos for delivery out on the PNW this week.

For the most part, export business continues to come out of Brazil, with a growing trend for exports out of Argentina. Just-released Chinese customs data showed they imported 8.6 MMT of soybeans in April, of which 2.45 MMT was from the U.S. Their year-to-date imports from the U.S. (Jan-April) are at 9.6 MMT, which 40% off last year's pace.

As for new crop sales, China has been absent, which makes USDA's projection of a 125-million export increase for the upcoming marketing year seem entirely unrealistic.

Strong U.S. corn demand

Demand for U.S. corn continues to meet expectations as year-to-date inspections total 1.386 billion bushels, up 29% from last year's (which aligns with the current USDA export forecast). This week's export inspections came in at 48 million bushels (of which 11 million bushels were destined for China, which was good to see).

At this juncture, we view the recent spring rally as a typical supply-scare rally that producers should use to shore up their balance sheets and make old and new crop sales (as these rallies tend not to last).

A lasting bull market usually is a demand-driven one. This could develop later if the supply shock is severe enough to cause rounds of panic buying.

If you have questions or would like specific recommendations for your operations, don't hesitate to contact me directly at 815-665-0461 or anyone on the AgMarket.Net team at 844-4AGMRKT.

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About the Author(s)

Jim McCormick

Hedging strategist, AgMarket.Net

Before joining AgMarket.Net, Jim was a senior broker with a nationally recognized firm and has 24 years of experience as a registered commodity representative, servicing both commercial and individual trading and hedging customers. He specializes in hedging and trading strategies using combinations of forward contracting, futures and options for corn and soybean farmers and livestock producers. He has a Series 3 futures brokerage license and earned a bachelor’s degree in Agribusiness Management from Purdue University.

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