Corn for the Coming Year

Dr. Ken Rietz

April 4, 2024

The cost of food has been a source of concern for many in the U.S., from our daily purchases to the inevitable political finger-pointing. Corn is the largest food crop grown in the U.S., and is one of the three essential food crops, along with soybeans and wheat. In this issue, we look at the prospects for corn prices primarily this year, and then give a look at next year. But it should also be noted that the large majority of what is said about corn applies fairly well to soybeans and wheat. We begin with the front month corn futures at the CBOT for the past several years.

Figure 1: The front month CBOT futures for corn, in USD per bushel

Historically, the price of corn rose significantly during 2022 and 2023, mainly due to inclement weather, the war in Ukraine, and COVID-19. But more recently, prices have adjusted to those disruptions, and have begun to settle down to values that were common in the late 2010s. The same can be said for wheat and soybeans, according to FAPRI-UM.

The price of corn futures depends on a number of factors. One that is available at the beginning of the planting season is the acreage that is expected to be planted, since most states (except Texas) have actually planted about 2% of the total expected crop. The USDA has estimated that 90.036 million acres will be planted with corn. The Hightower Report also gives four other commercial estimates ranging from 91.0 to 93.5 million acres. These estimates could well be too low, since the planting is starting early. The weather also is not as foreboding as the past two years, although most of Iowa is still experiencing some level of drought, according to the USDA.

Another factor is the overseas markets. South America has had its own problems lately, mainly with weather: too much rain in Brazil, and not enough rain in Argentina. There seems to be a likely shortage of soybeans in their latest harvest, and this has probably influenced more U.S. farmers to shift to planting more soybeans and less corn this year, expecting that the soybean price will be higher.

The lowered planting estimates have pushed corn futures up somewhat, and that is probably going to continue through this planting season, assuming that the weather remains close to typical. Estimates for beyond this year become less certain. The Hightower Report has March 1, 2024 corn stocks at an estimated 8.3 billion bushels, a higher level than the past 4 years. So, an average corn crop this season would likely cause corn futures to drop after the end of this season due to high storage.