Corn Acreage Likely to Rise
What’s Happened…
A price rally in corn prices early this winter and low competing prices for soybeans and wheat have farmers leaning toward planting additional corn acres in 2025. At least, that is the consensus among many market analysts. A recent article in World-Grain.com cited a new report from CoBank’s Knowledge Exchange where corn acres are expected to rise to 94.6 million, the same figure as 2023 and up 4 million from 2024. World supplies of soybeans are currently adequate, especially if recent rains in Argentina help yield a potential rebound. Brazil is expected to produce 169 million metric tons of soybeans, a record according to the most recent WASDE report. Some private estimates are even higher. Spring wheat prices are not high enough to attract acres, and an increase in hay supplies suggests less corn for silage and more corn for grain. Farmers are not thrilled with November 2025 soybean futures trading near $10.50.
Over the last several months, the USDA forecast for corn carryout dropped from over 2 billion bushels to nearly 1.5 billion, a 25% reduction. During that same time, March corn futures gained 25%, rallying from a low near $4.04 to a recent high of just over $5.04. According to the Weekly Commodity Futures Trading Commission report, large traders were net short (sold) futures contracts or near 350,000 contracts in summer to net long (bought) recently near 380,000 contracts. Recently, December corn futures traded to just under $4.80, which was likely a tipping point to plant additional corn acres. Seed dealers are indicating corn orders are rising. Corn exports continue to run at a pace that may exceed USDA expectations, at a time when livestock margins suggest feed demand will hold or increase. While $4.80 is also not a price that thrills corn producers, yield dependability and dollars per acre do.
Why this is Important…
In both 2023 and 2024, corn farmers were happy or even surprised their corn yielded as well as it did, considering the challenging weather conditions through the growing season. Corn producer confidence may be at an all-time high. For soybeans, maybe not so much, especially after last year when drier weather in August trimmed yield potential. If corn acreage does increase in the upcoming season, so likely will the carryout, perhaps back to over 2 billion. Managed money may go from long to short.
Currently, an export pace that is stronger than forecast and tight world supplies are supporting prices. However, Brazilian farmers are quickly catching up on planting the safrinha corn crop, which follows soybean harvest. Brazilian farmers are encouraged to plant even more acres due to higher U.S. corn prices. U.S. export sales could and likely will slow in the months ahead. To date, mostly dry conditions could mean a fast start to the U.S. planting season. The corn market may be poised for a significant price drop as supplies in 2025 will likely be on the rise.
What can you do about it?
Stay ahead of the game. Prepare for volatility. Develop a strategic approach for marketing the 2025 corn crop. Consider a strategy to forward sell to the point of comfort and protect the value of un-sold bushels by purchasing put options. Historically, once corn buyers and traders feel confident that production could lead to a big yield, prices tend to decline rapidly. Consider re-owning forward sold bushels in the event disruptive weather is impactful to final yield. Big crops are not guaranteed.
Find out what works for you…
Work with a professional to find the strategy or strategies that are best suited for your operation. Communication is important. Ask critical questions and garner a full comprehension of consequences and potential rewards before executing. The idea is to make good decisions for the operation and less emotionally charged responses to market moves, which are always dynamic.
About the Author: With the wisdom of 30 years at Total Farm Marketing and a following across the Grain Belt, Bryan Doherty is deeply passionate about his clients, their success, and long-term, fruitful relationships. As a senior market advisor and vice president of brokerage solutions, Doherty lives and breathes farm marketing. He has an in-depth understanding of the tools and markets, listens, and communicates with intent and clarity to ensure clients are comfortable with the decisions.
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Author
Bryan Doherty