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Strategic Farming: Let's talk crops! focused on the crop market situation and outlook

Phyllis Bongard, Extension content development and communications specialist, and Dr. Frayne Olson, Crop economist and marketing specialist, North Dakota State University

With recent softening in the corn, wheat, and soybean markets, what is the outlook for 2024? Dr. Frayne Olson, Crop economist and marketing specialist from North Dakota State University, addressed several factors shaping the current crop market and outlook in the January 10 kickoff session of Strategic Farming: Let’s talk crops.

USDA data out January 12

Crop prices softened and trade volume decreased during the “holiday hangover” leading to concern. Producers started wondering if this might be a long-term trend. What might we expect going forward?

USDA released four major reports on January 12 that are closely followed by market traders and analysts in the US and around the world. They serve as a reference point and help set expectations for the markets going forward:
  • WASDE (World Agricultural Supply and Demand Estimate) – estimates both domestic and foreign production and consumption and is updated monthly.
  • Annual production report – Friday’s report will include the final official numbers for planted and harvested acreage and average yields for all major crops, excluding small grains.
  • Quarterly stocks report – Based on USDA surveys of farmers and industry, the report estimates bushels in storage, which serves as a benchmark to measure feed consumption.
  • Wheat seeding report – estimates how many acres of winter wheat were planted during the fall of 2023.

Corn situation

With numbers finalized Friday, 2023 saw a record large corn crop, primarily due to increased acreage. Even though demand has been relatively strong, ending stock numbers are high compared to the past couple of years. The stocks-to-use ratio – the amount of grain stored divided by use – is also relatively high and this has an impact on both corn price and price volatility. Average prices tend to be lower and more stable when the ratio is high because the inventory acts as a buffer in changing situations. The flip side is also true: when the stocks-to-use ratio is low, prices tend to be higher and more volatile.

Going forward, corn consumption and success of the Brazil and Argentina crops will be key factors affecting the market. There are four major uses of corn that impact ending stocks: 1) feed, 2) ethanol, 3) exports, and 4) everything else (seed, food, and industrial).

Corn for feed

The livestock sector is the largest consumer of whole corn, including beef, pork, poultry, dairy, and some aquaculture. Feed consumption tends to be relatively stable over time since it takes time to adjust herd sizes. While there has been a reduction in beef numbers, there has also been compensation from increased slaughter weights. USDA is looking at relatively stable feed use going forward.

Corn for ethanol

Ethanol production comes in second in corn utilization and this is also relatively stable. The Department of Energy tracks how much ethanol is produced each week and these numbers don’t vary a lot.


The export market is where the volatility is. If there’s a shock to the system, it will likely come from this sector. While the US enjoys many customers that buy grain on a regular basis, the Chinese market has been very volatile. For several years, China has been one of the top three importers of US corn, along with the more consistent buyers Mexico and Japan. However, Chinese demand for US corn dropped significantly after they turned to Brazil for corn instead.

Despite volatility from China, early indications are that the US could enjoy a better export season than last year. Japan is increasing its import volume since prices are more attractive. While overall export volume is trending higher, the US does have competition in the export market. After leading export volume for decades, Brazil is now the leading exporter of corn, due to large crops that are very price competitive.

Importance of Brazil and Argentina

After three years of drought in Argentina, weather patterns have shifted resulting in very good yield potential forecasts. Even though Brazil is the larger exporter, the markets can’t ignore Argentina.

Brazil produces two crops of corn. In the southern region, corn and soybeans are grown much like they are in the Upper Midwest. Those crops have been planted and the bulk of harvest should occur in March and April. After dry conditions early in the growing season, this region is now anticipating a more normal year with exportable stocks. Crops from southern Brazil generally compete with us in the export market during our summer months. Overall, this first crop accounts for just 25% of Brazil’s total corn crop.

The second corn crop –called sefrinha – is grown further north. It’s planted in sequence with soybeans, not at the same time as the first crop. Soybean harvest is just beginning in this region with less than 1% completed. As soon as harvest is done, corn will be planted. Typically, this second crop is planted during January and February and harvested from June through September. It accounts for 75% of Brazil’s corn production.

Because corn and soybeans are grown in sequence, crop and soil moisture conditions that impact the soybean crop can carryover into the sefrinha corn crop. Before the holiday season, this region experienced drought that affected soybean yields. Since then, they have received significant moisture and crop damage has stabilized. As the sefrinha crop is planted and progresses, the corn market will become more actively engaged.

Tying it together

Several factors have played into the anxiety about the recent markets. First, trading volume was very light over the holidays. There were few buyers and sellers, so any news that might impact pricing played an outsized role.

Second, yield expectations for northern Brazil increased with the rain they received over the holidays. With uncertainty about the crop decreasing, corn prices here tended lower. Finally, crude oil prices in the commodity futures started to soften over the holiday break. As a result, some investors pulled money out of the commodity futures market and reinvested in other areas. Since commodities include both crude oil and grains, crop futures took a hit.

While there has been nervousness in the marketplace, Olson suggests that might be changing. The USDA reports scheduled out on Friday usually hit a reset button on people’s perspectives. Given lower price levels, Olson expects to see some increase in exports and export volume. He will be watching export sales closely over the next few weeks and particularly sales to China. If export sales to them increase, that may be enough to say we’ve hit the low.

Soybean situation

Compared to corn, ending stocks for soybeans have been relatively tight the past few years. Lower than expected soybean acreage and production offset a decrease in exports to keep ending stocks relatively low. Even though prices have softened over the past weeks, we’re still at the higher level of the price spectrum long term. As we noted earlier, when stocks-to-use ratio is low, prices tend to be higher and more volatile.

Going forward, markets will be watching consumption and the soybean crop in Brazil. US soybean consumption falls into two major categories: Crushing and exports.

The crushing industry is the number one user of soybeans. Plant expansion, particularly in the northern plains, has been largely driven by the demand for renewable biodiesel. Over the past ten years, crushing capacity has increased at a steady rate. Like an ethanol plant, the demand for soybeans are relatively stable day-to-day, week-to-week, month-to-month. It’s easier to forecast volumes required going forward for the crushing industry than for the export market.

For the past several years, there’s been a steady downward trend in exports and export volume. China is, by far, our number one customer, followed by Mexico, Japan, and Germany. Compared to what we normally see at this time of year, export volume to China is well behind. The main reason for this is that Brazil produced a massive soybean crop and captured the export market into China for a longer period of time. Our peak export period normally occurs from harvest through the end of January. Normally, Brazil has a difficult time exporting during that time and the world, and particularly China, would look to US supplies. However, since Brazil’s crop was so large, they were able to export longer into our export window.

Brazil outlook

Brazil plants one crop of soybeans, starting in the north and working south. As we noted earlier, the crop experienced drought, but with recent rains, yields are starting to stabilize. The exception may be part of the northern region where yields have been reduced. Yields and yield potentials coming out of both Brazil and Argentina are being closely watched by the markets. If there continue to be problems, buyers may shift to the US supplies to cover their positions.

Ending stocks for all wheat is currently comfortable. Domestic milling demand is also relatively stable. However, the export market has been very volatile. This is primarily due to the large crops Russia has produced and the ability to be very competitive, especially with winter wheat. Agricultural products are not included in the sanctions against Russia, so grain export has not been hindered.

Spring wheat inventories are adequate and exports are a bit better than expected. Most of that is due to increased sales to Mexico, but the Philippines continue to be a very stable, big buyer. The market is struggling a bit, but if the steady export pace continues, that may help.

Join us at Ag Expo!    

Join us live at the Ag Expo on Wednesday, January 17, then plan to attend January 24 when we resume the webinar series with Dr. Candy Hirsch and Tom Hoverstad to talk big data and corn genomics. 

University of Minnesota’s Strategic Farming: Let’s talk crops! webinar series, offered Wednesdays through March, features discussions with specialists to provide up-to-date, research-based information to help farmers and ag professionals optimize crop management strategies for 2023. For more information and to register, visit

Thanks to the Soybean Research and Promotion Council and the Corn Research and Promotion Council for their generous support of this program.

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