May 2024 Corn Update

Corn looks setup for another interesting summer. On Friday, 5/10/24, the USDA released updated projections for their 2023/24 and a first look at the 2024/45 corn balance sheets in their monthly WASDE

A few key points:

  • USDA is forecasting acres down 4.6M year over year. 
  • USDA is again forecasting a record yield of 181 bushels per acre
  • USDA is forecasting a 100M bushel increase in demand year over year, driven mostly by increases in feed and residual and exports (50M bushels each)
  • Overall, the USDA is forecasting a stocks to use ratio that is roughly flat year over year – 2.02B bushels in 23/24 vs 2.1B bushels in 24/25

My Perspective:

  • We are likely to see acres increase from the 90M mark that the USDA is forecasting. Yes, it has been wet this spring, which likely will reduce some acres, but I am still bullish overall acres due to bean/corn ratios and firmness in basis values. 
  • The 181 bu/acre yield is a stretch. I agree that it is trend yield and is what the USDA will use per their methodology, but we would likely need to see nearly perfect weather to make that happen. I am starting my balance sheet with an average yield of 178. 
  • I also forecast an increase in demand year over year, but less than 100M bushels. This is partially due to me forecasting a smaller crop (slightly higher acres, but also lower yield). With a smaller crop comes a smaller feed and residual number. 
  • I am also slightly bullish exports. I set mine at 2.2B for the 24/25 marketing year. Basis values around the country stayed relatively firm this year due to the fact that farmers had plenty of space and locked the corn away after harvest. That is likely to change this year (year two of potential big crops), which means there is less space on farm for corn to sit. This should cause basis pressure as we move through to the new crop, which I am thinking may do some of the export work. We will see – got to start somewhere. 

Overall, at this point, I am expecting harvest prices for Dec corn to end in the ~4.20/bu area. This is obviously subject to change as we move through the summer, but based on my numbers today, that’s what I’m looking at. 

Want to see my full outlook? Download a PDF of my May 2024 Corn Market Master.

 

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