USDA forecasts higher soybean, lower corn acres

ARLINGTON, Va. — An initial forecast for the 2024-2025 marketing year leaned toward higher soybean acres and lower corn and wheat acres, based on projected price supports for those commodities.

The forecast kicked off the 100th Agricultural Outlook Forum, the two-day event that featured more than 100 experts, executives and academia discussing the largest issues impacting agriculture and potential solutions.

The U.S. Department of Agriculture outlook projects 87.5 million soybean acres, up from 83.6 million in 2023; 94 million corn acres, a 3.6 million acre dip from last year; and 47 million all wheat acres, down 2.6 million from a year ago.

“Prices support soybeans a little bit more than corn, so maybe we move some area back into soybeans,” Seth Meyer, USDA chief economist, said to open the forum.

The 2024 grain and oilseeds outlook used Illinois production costs as an example of developments throughout the Corn Belt.

According to Agricultural Marketing Service’s Illinois production cost report, costs for producers are lower relative to this time a year ago and are generally at or below the average seen during late January and early February over the last three years.

Illinois prices for fertilizer such as anhydrous ammonia prices are down nearly 40% relative to 2023, while diesel is about 20% lower. However, interest costs have increased modestly with the three-month Treasury Bill yielding over 5% for a good portion of 2023 and into 2024.

December corn futures, which during the month of February to date are about 20% lower than a year ago, have declined less than nitrogen fertilizer while soybean futures are down about 15%.

“Cash prices are also showing declines of equivalent magnitude. Since the start of February, prices for fall delivery of corn in Illinois have averaged about $4.30 per bushel, down about 25% relative to all of February a year ago, while soybean prices have averaged about $11.20 per bushel, a decline of just under 20%,” Meyer said.

Soybean area is expected to increase as demand for soybeans in the U.S. is expected to be driven by stronger demand for domestic crush — largely driven by growth in biofuel use — while exports likely face competition from supplies in South America during the 2024-2025 U.S. marketing year.

“Export competition is only likely to grow. We need to be both export competitive and have a domestic market where we can sell our goods into, and as many different ways we can sell it, whether that’s traditional grain sales or whether that’s a bio-economy product. We need to have markets domestically as well in order to do that,” Meyer added.

Here are some highlights of the USDA’s outlook balance sheets.

Corn

• The corn crop is projected at 15.040 billion bushels, down about 2% from the prior year’s record.

• The 2024 yield projection of 181 bushels per acre is based on a weather-adjusted trend assuming normal planting progress and summer growing season weather.

• With beginning stocks up sharply from the prior year, total corn supplies are forecast at a record 17.237 billion bushels.

• Total U.S. corn use for 2024-2025 is forecast higher relative to last year on growth in domestic use and exports.

• Food, seed, and industrial use is slightly higher at 6.805 billion bushels.

• Corn used for ethanol is forecast at 5.400 billion bushels, based on expectations of modestly higher motor gasoline consumption and continued strength in ethanol exports.

• Feed and residual use is forecast up about 1% to 5.75 billion, reflecting corn supplies that are higher than a year ago and lower expected prices during the year.

• Exports are project to increase by 50 million bushels to 2.15 billion on expectations of modest global trade growth.

• Ending stocks are projected at 2.532 billion bushels, up 360 million from a year ago and resulting in stocks relative to use at 17.2%, which, if realized, would be the highest since 2005-2006.

• The season-average corn price received by producers is forecast down 40 cents to $4.40 per bushel.

Soybeans

• Soybean supplies are projected at 4.8 billion bushels, 8% above 2023-2024 with increased beginning stocks and production.

• Soybean production is projected at 4.5 billion bushels, 8% above a year earlier, and assumes a weather-adjusted trend yield of 52 bushels per acre.

• As domestic soybean crush capacity continues to expand, crush is projected to rise to a record 2.4 billion bushels in 2024-2025.

• Domestic and global soybean meal demand is expected to increase as greater availability of soybean meal, both in the U.S. and South America, leads to lower prices. Reduced soybean meal prices will likely make soybean meal a more competitive feed ingredient and may prompt stronger demand in the global livestock and poultry sectors after several years of high prices.

• U.S. soybean meal exports are forecast at a record 16.5 million short tons while domestic meal demand grows 3%, compared to 2.7% in the prior marketing year.

• The soybean meal price is forecast down $60 per short ton from last marketing year to $320 per short ton for 2024-2025.

• Soybean oil domestic demand will continue to increase driven mainly by higher biomass-based diesel production. Various incentives feed into the higher soybean oil for biofuel forecast, such as the Environmental Protection Agency’s growing biofuel mandates for 2023-2025, current state-level programs, and the switch from a blender’s tax credit to a U.S. clean fuel production tax credit in 2025, which may incentivize more domestic biofuel production.

• Soybean oil for biofuel is expected to grow 8% to 14 billion pounds. Conversely, both residual use (food, feed, and other industrial) and soybean oil exports remain relatively flat while biofuel absorbs the growth in supplies.

• The soybean oil price is forecast to decline 6 cents per pound from the prior year to 45 cents in 2024-2025 from higher availability of soybean oil as well as competing imports of feedstock used in biomass-based diesel, like canola oil and used cooking oil.

• U.S. soybean exports for 2024-2025 are projected at 1.875 billion bushels, up 155 million from the 2023-2024 forecast. Large global supplies are likely to lead to lower soybean prices, spurring international demand, but the U.S. share of exports is expected to remain below 30% of global exports (compared to near 40% during 2013-2014 to 2017-2018) due to higher South American supplies.

• Soybean ending stocks are projected at 435 million bushels, up 120 million from the 2023-2024 forecast.

• With large global soybean supplies, higher U.S. ending stocks, and the highest stocks-to-use ratio since 2019-2020 at nearly 10%, the soybean season-average farm price is projected at $11.20 per bushel, down $1.45 from 2023-2024.

Wheat

• U.S. wheat production is projected 5% above 2023-2024 at 1.9 billion bushels and would be the largest harvest in five years.

• The NASS winter wheat and canola seedings report estimated winter wheat seeded area at 34.4 million acres, down 6% from 2023.

• Total wheat planted area for 2024-2025 is projected at 47 million acres, down 2.6 million acres from last year. Harvested area is forecast at 38.4 million tons and is based on the 10-year average harvest-to-plant ratio.

• While planted area is forecast lower than the previous year, harvested area increases year-to-year, as abandonment is expected to return to normal levels following two years of drought conditions in the Southern Plains.

• The all wheat yield for 2024-2025 is projected up 2% from last year at 49.5 bushels per acre and is based on a long-term linear trend.

• After six years of successive reductions, beginning stocks are forecast to increase in 2024-2025 to 658 million bushels, a 15% increase from the previous year.

• A larger crop and higher beginning stocks are expected to raise supplies by 6% to 2.678 billion bushels.

• Projected total use of 1.909 billion bushels is up 2% from a year earlier but below the five-year average.

• Domestic use is projected modestly lower on smaller feed and residual use as corn supplies remain abundant and competitively priced.

• Food use is projected marginally higher at 962 million bushels, but below levels seen in 2021-2022 – 2022-2023.

• Higher wheat exports are expected on a rebound from last year’s 52-year low to 775 million bushels but remain below the long-term average as U.S. wheat export prices remain uncompetitive in several markets.

• With supplies projected to increase more than total use, 2023-2024 ending stocks were increased to 769 million bushels. This is 17% above last year and slightly above the five-year average.

• The increased stocks and slightly higher stocks-to-use ratio of 40.3% contribute to a projected 2024-2025 season-average farm price of $6 per bushel, down $1.20 from 2023-2024 and would be the lowest season-average price since 2020-2021.