Fundamentally Speaking

The corn market is starting to focus a little attention on the upcoming growing season ahead of the USDA's annual Ag Outlook Forum where they will give their first estimates for the 2024/25 U.S. corn, soybean and wheat planted acreage and demand-supply figures.

Some early acreage projections from S&P Global and Farm Futures seem to confirm general talk that U.S. farmers will switch a fairly substantial portion of their corn planted area over soybeans though the exact numbers are still up in the air.

Though the current 2024 November soybean/December corn price ratio and some university return per acre scenarios for various crops do point to enlarged soybean seedings at the expense of corn, we have heard about very good post-harvest fertilizer application conditions that could favor corn along with just general sentiment Midwest farmers just love to plant corn.

When talking about corn, one cannot overstate the importance of the "I" states which are Iowa, Illinois and Indiana.

Over the past 20 years the combined corn output of those three states has averaged 40.4% of total U.S. production ranging from a low of 35.0% in the 2012 drought year to as high as 44.7%.

Reasons for this include the fact that these three states have the highest yields in the country as the projected 20-year trend yields for 2024 are the highest for these three states of any of the other top 15 growing states and they also have the highest harvested to planted acreage ratios of any of the top 18 growing states.

A final note is that the trend yield increase over the past 20 years for the "I" states are among the highest, though other states have seen a faster increase in trend yield growth since 2004.

This chart shows the final 2023 and projected 20-year trend for corn in bushels per acre (bpa) on the left-hand axis while the slope of the 2004-2023 trend yield is reported on the right-hand axis.

The figures in rectangles are the 20-year average harvested/planted acreage ratio.

Last year IL had the highest corn yield of any of the top 18 growing states at 206 bpa and its projected trend yield this year of 207.7 bpa is also the highest.

IL also has the highest average harvested to planted ratio over the past 20 seasons at 98.7%.

Since 2004, the Illinois corn yield has increased by an average of 2.69 bpa per year.

IN had the second highest corn yield of the top states last year at 203 bpa and also has the second highest harvested/planted ratio at 97.2%, while IA was the third rated state in terms of 2023 yield at 201 bpa and the third highest harvested/planted ratio at 96.8%.

Other features in this chart show the Plains states of CO, KS and TX seeing their corn yields decline over the past 20 years by 1.34, 0.33 and 0.45 bpa per year while also having some of the lowest harvested/planted ratios.

Note two northern states, MI and WI, where a lot of their corn goes to silage resulting in lower harvested to planted ratios for grain corn and two of the more southern states, KY and TN, having the highest upward trend in corn yield growth at 2.80 and 2.77 bpa per year.

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