Headwinds for Corn and Soybeans

Looking for Rays of Sunshine for Corn and Soybean Markets at Commodity Classic

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Commodity Classic opened Wednesday afternoon in downtown Houston. A downturn in the agricultural economy is being felt by farmers who are looking for some positive news to inject some life into commodity prices right now. (DTN photo by Chris Clayton)

HOUSTON (DTN) -- Farmers and others at the Commodity Classic annual gathering for corn, soybean, wheat and sorghum producers are trying to find some rays of light, especially in the face of declining prices.

Reality is setting in that farmers shouldn't put a lot of stock in getting a new farm bill this year and they are staring at dramatic price declines for corn and soybeans as planting season rapidly approaches.

"The farm bill is important but a lot of farmers are concerned about where our prices are going right now," said Tom Haag, a Minnesota farmer and chairman of the National Corn Growers Association.

Haag noted cash prices at area elevators where he lives in central Minnesota are below $4 a bushel; he operates with a break-even price closer to $4.50 a bushel. "For our farm, $4.50 is kind of a magic number for us so that is kind of a concern," Haag said.

Haag noted the crop insurance guarantee for 2024-25 crop corn doesn't look promising either. Thursday's price close on the December corn futures will finish up the monthly average that will set price protection for spring planting. Right now, it's more than $1.25 below last year.


On Friday, EPA Administrator Michael Regan is scheduled to attend Commodity Classic along with Agriculture Secretary Tom Vilsack. There's a lot of anticipation about just what Regan will talk about given EPA's situation with dicamba and the courts, a waiver needed to sell E15 ethanol for the coming summer months, and then there is the prospect of how the Biden administration will model out the prospects for tax credits to produce Sustainable Aviation Fuel (SAF).

Corn and soybean farmers will be looking for positive news on how a Biden administration inter-agency task force has adjusted the Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies (GREET) model to allow for SAF tax. The GREET model adjustments are going to be key for driving feedstocks for SAF -- a potential 30-billion-gallon market.

The GREET model situation is tied to how Treasury will offer those tax credits to domestic SAF producers, but EPA, USDA and the Department of Energy were among the agencies that weighed in on how the GREET model calculates lifecycle analysis for feedstocks.

"We're hoping for this GREET model because we haven't had a lot of positive things happening right now for the farm economy," Haag said. "Ideally it turns out that way. It can be an explosive new market for our ag concerns and ethanol."

Early in the Corn Congress on Thursday, a resolution supporting the GREET model for SAF failed in a 79-42 vote by NCGA delegates. A farmer noted the resolution is a couple of days too early for corn farmers to commit to supporting the model without knowing the specifics.


For soybeans, prices have been hit by a sharp decline in exports from a year ago, driven heavily by fewer soybeans shipping to China, noted Jim Sutter, CEO of the U.S. Soybean Export Council. Sutter said he was in China just a month ago and the country's economy is weighing heavily on everyone.

"It was the least optimistic there I've ever seen," Sutter said.

Among USSEC staff in China, he said their friends are out of work right now. "They were talking about how they're worried about their economy because it's not really functioning so well right now."

That's a large factor in soybean sales to China for the 2023-24 marketing year, right now down about 8 million metric tons (mmt) compared to a year ago. Sutter said Chinese consumers are focusing heavily on tightening their belts, which translates into eating out less.

"I think that's why demand in China is down," Sutter said.

He pointed to struggles in other countries. Egypt just a few years ago had pushed up its demand for soybeans, but now sales are cut in half. "That's because of their economic situation. Their currency has lost so much value. They just don't have the currency. So, in some of these developing -- or we call them emerging -- markets, like Egypt ..., they're having their own financial issues and it's having an impact on sales right now."

Chris Clayton can be reached at Chris.Clayton@dtn.com.

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Chris Clayton