Latest in Marketing & Outlook
Revisiting Big Corn and Soybean Crops Get Bigger
The September 2024 USDA yield forecasts of 183.6 bushels for corn and 53.2 bushels for soybeans are both well above trend and new national records. Some argue that these forecasts will become even larger, but there is no evidence to support the notion that “big crops get bigger and small crops get smaller.” There is, however, a well-documented tendency for USDA crop production forecasts to be smoothed across the forecasting cycle regardless of crop size.
Post-Harvest Grain Marketing in a Low-Price Environment
Over the summer of 2024, corn and soybean futures markets saw both major price declines and increases in calendar spreads. The article evaluates current futures spreads, comparing them to storage costs, and provides insights on when storing crops may be profitable. It emphasizes the importance of considering both physical storage costs and opportunity costs when making storage decisions.
Insights for Supply, Ending Stocks, and Prices from FSA Acreage Data
The USDA’s August Crop Production report updated corn and soybean acreage estimates using FSA data, lowering corn to 90.7 million acres and raising soybeans to 87.1 million acres. The report’s new estimates suggest higher soybean supply and ending stocks for 2024/25. Using the same FSA data, the article provides alternative estimates for final planted acreage, indicating slightly higher production levels and lower prices than current USDA forecasts.
The Range of New-Crop Price Expectations Is Narrowing Early
Current options-implied price distributions for 2024 new-crop corn and soybeans reveal that the range of expected price outcomes has narrowed more quickly in 2024 than in recent years. This market trend suggests a more bearish outlook compared to previous years, with implications for farmers’ marketing decisions as the likelihood of a significant growing-season rally in new-crop futures is shrinking.
Sizing Up Potential Downside Risk for New-Crop Corn and Soybean Prices
The latest USDA forecast calls for modest growth in domestic corn and soybean demand. One downside risk for price levels is that long-run optimism regarding US biofuels does not materialize in the short run. This could lead to excess processing capacity and oversupply of biofuels feedstocks such as corn and soybeans. A similar scenario occurred during the last biofuels boom between 2005 and 2010
Can ‘Lost’ Crop Acres Be Found?
The highly anticipated Prospective Plantings report, released Thursday, March 28 by USDA’s National Agricultural Statistics Service, showed lower than anticipated crop acres. Acreage of all crops is estimated to be…
Post-Harvest Grain Marketing: Comparing Observed Prices and Marketing Outcomes
Post-harvest grain marketing is a big deal for Illinois grain farms. As part of a series of articles on the post-harvest marketing challenge, this article provides evidence that realized returns to post-harvest corn and soybean sales vary substantially across marketing years but are correlated with seasonal cash price appreciation. This implies farms may not be fully realizing the benefits of forward contract both before and after harvest.
FAME Biodiesel, Renewable Diesel, and Biomass-Based Diesel Feedstock Trends over 2011-2023
There has been a huge increase in feedstock usage because of the renewable diesel boom. Total feedstock usage for renewable diesel grew over nine billion pounds in 2023 alone. Yellow grease feedstock increased the most, from under 100 million pounds in 2015 to over 6 billion pounds in 2023. In terms of total biomass-based diesel feedstock, soybean oil is the largest by volume, which is not surprising given the dominant position of soybean oil in the production of FAME biodiesel.
Biodiesel Prices and Profits…Again
New profit estimates indicate that FAME biodiesel production profits have been on a severe roller coaster during the renewable diesel boom years of 2021-2024, averaging an astounding loss of -$0.59 per gallon during the early part of the boom, recovering to a historically high average level of +$0.41 per gallon in the middle, and back to losses that averaged -$0.19 per gallon since mid-2023. If the losses in 2024 to date continue, more biodiesel plant shutdowns may be in the offing.
International Benchmarks for Soybean Production
Our examination of soybean yield, gross revenue, and cost for farms in the agri benchmark network from Argentina, Brazil, Russia, the Ukraine, and the United States found that yield, gross revenue, and cost were substantially higher for the U.S. farms. In general, the 2018 to 2022 period was a profitable period for soybean production with each of the typical farms, except for the typical farm in Canada, exhibiting a positive economic profit.
Is Sustainable Aviation Fuel the Future of Ethanol?
U.S. ethanol consumption has been stagnant for almost a decade. Limitations on the blending of ethanol with gasoline and EPA discretionary waivers have prevented any large-scale demand growth for corn-starch…
CO2 Production by the U.S. Ethanol Industry and the Potential Value of Sequestration
We estimate total CO2 production of U.S. ethanol plants over 2015 through 2023 and find that it varies from a low of 42.4 million tons to a high of 48.9 million tons. Given the large CO2 production of ethanol plants, it is not surprising that the maximum possible benefit from tax credits for sequestration in the IRA is also large. We estimate the maximum potential revenue to be $3.75 billion per year, which would more than likely double the after-tax income of the U.S. ethanol industry.
Another Strong Year for Ethanol Production Profits in 2023
The U.S. ethanol industry entered 2023 on an uncertain note, with weekly profits teetering around the breakeven level. Like all other facets of the commodity business, the ethanol industry was…
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Illinois Regional Basis Data – Soybeans
Illinois Regional Basis Data – Corn
Selected Market Data – Corn
Selected Market Data – Soybeans
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Agricultural Supply and Demand Database
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The Marketing and Outlook Research Reports (MORR) were published between 2008 and 2014. The reports are archived for interested researchers and public use.
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