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2024 market outlook: corn, soybean and cotton

Looking at the corn to soybean ratio, acres will likely shift toward soybean in 2024.

Whitney Haigwood

January 26, 2024

5 Min Read
Close up of late season ear of field corn on left and close up of soybean pods ready to harvest on right.
Looking at the 2.8 corn to soybean ratio, U.S. planted acres will likely shift to soybean in 2024. Ag economist, Will Maples at Mississippi State University projects 88 million acres of soybeans this year, noting it is still early in the game. Whitney Haigwood

In 2023, the U.S. planted 94.6 million acres of corn and 83.6 million acres of soybean. Looking ahead at the corn to soybean ratio, those acres will likely shift in 2024.

There is much to consider, from supply and demand to historical trends in futures prices. For a breakdown on the details, Will Maples, assistant professor of agricultural economics at Mississippi State University shared a market update with attendees at the Mississippi Row Crops Short Course on Dec. 6 in Starkville, Miss. 

As part of his presentation, Maples also looked at the increased basis risk caused by lower Mississippi River levels and offered a few proactive marketing solutions for the coming years. 

Corn and Soybean Outlook 

The U.S. planted a lot of corn last year, creating a more bearish market with an estimated 2 billion bushels in ending stocks pulled over into 2024 with a 15% stocks-to-use ratio. Soybeans, on the other hand, are seeing tighter stocks with only 240 million bushels carried over from 2023. 

With the November average corn to soybean ratio at 2.8, Maples said this heavily suggests lowered corn acres to be replaced by soybean acres this coming season. 

“We are projecting 88 million acres of soybeans in 2024. We are still early in the game, but expect soybeans to go up, because stocks are low and we need the beans,” he said. 

Related:Economist explains ‘tough’ year ahead for corn, soybean

When it comes to demand, Maples noted corn exports have been sluggish. While Mexico is still buying U.S. corn, some of this sluggishness is related to issues caused by Mexico’s ban on genetically modified corn. 

Moreover, ethanol demand has plateaued and is no longer the main driving factor for corn demand, and the push toward electric vehicles raises concern with continued potential to reduce the need for ethanol. 

“There is a concern with electric vehicles, and that is a long-term issue to keep an eye on that could potentially affect corn demand,” Maples said. 

For the 2024 average farm price for corn, Maples projected $4.85 per bushel. He said, “With corn, I’m not very bullish, and I’m not very bearish. I’m pretty much sluggish.” 

For soybeans, he calculated the average farm price to fall around the $12 range. 

“The key thing right now is South American production. Brazil is now the biggest soybean grower in the world,” he said. “Their crop is planted, and while it was dry at first, they are getting some beneficial rains. The soybean crop is looking a lot better, so keep your eye on that as we go through the rest of the winter.” 

Futures Contracts  

To take a more detailed look at corn and soybean prices, Maples dialed into price ranges of harvest season futures prices for corn and soybean contracts beginning Nov. 1 through expiration. 

Related:USDA delivers surprise boost to corn yields

In 2023, the December corn futures contract averaged $5.40 per bushel, with a price range throughout the contract period of $1.80. Maples noted this price range is less volatile than in recent years, like the price range of $2.50 we saw in 2021. 

The same trend is seen for soybeans. Last year, the average November soybean futures contract averaged $13.30 per bushel, with a price range of $2.78. Again, that range is much less volatile than the $4.88 we saw in 2021.  

Going forward in to 2024, Maples projects a trading range of $2 with corn prices sitting somewhere between $4 to $6 per bushel. For soybean, he expects a trading range of $4.50 with bean prices between $10 to $14.50 per bushel. 

For an historical perspective, Maples collected daily closing futures prices of harvest month contracts going back to 2009 for both corn and soybean.  

He said, “If we are sitting in that middle range of $4 per bushel for corn, we are basically still covering 50% of our historic downside price risk we have seen in the corn market for the last 15 years. 

“If we see corn at $6, that covers 86% of all corn prices we have seen in that time span. So, keep that in mind. If you can sell corn on this higher end of the range, you are doing better than 86% of the chances you’ve had in history to sell at that point,” Maples explained. 

With soybeans, selling on the high side of the range at $14 is better than 95% of the opportunities to sell since 2009, and Maples noted, selling beans at $10 per bushel is better than 51% of the chances to sell in that 15-year period. 

“The soybean prices are interesting to me, because we have two very different market trends. For the majority of the time since 2009, we have been in an $8.50 to $10.50 trading range, or it bumps up and we trade at the $12 to $14 range.  

“Luckily we are in that upper half of that range right now.” Maples said, “But from an historical perspective seeing $12 beans is better than 70% of the daily closing prices we have seen in the last 15 years.” 

Mississippi River levels and basis 

In 2022 and 2023, low Mississippi River levels not only slowed progress but also greatly impacted the basis for producers selling their grain to the river. 

Maples explained that the cash price received at the elevator is made of two components, the futures price and the basis. Most of that price risk is in the futures price, with basis representing only about 10% of the risk. Unless you get into situations like we experienced the past two years with low river levels. 

Farmers who wind up with little to no on-farm storage at harvest are forced to sell grain from the field, and they take a hit if basis drops. So, what can be done to manage basis risk? 

Aside from efficient on-farm storage management to offset some of the risk, farmers can lean toward forward contracting and making sales to lock in the basis price. 

Or another proactive option Maples suggested is basis contracts. 

He said, “If you can lock in a good basis earlier into the year, you may want to start considering it. If you’ve never played with basis contracts, and you are not willing to lock in a price, you can at least lock yourself in at a good basis if the opportunity presents itself.” 

The most important thing, Maples said, is planning for it early in your marketing plan. 

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