Crops > Outlook & Prices > Outlook & Prices
February 2025
Gains outside the traditional numbers
The February USDA update showed no changes for the US corn and soybean supply and use tables, with the exception of prices. But there were a few numbers moving within the report that will feedback to impact those tables. For the prices, USDA moved their 2024-25 season-average price estimates up 10 cents for corn and down 10 cents for soybeans. In both cases, these movements are just following what has been happening with prices over the past few months, with corn prices still bouncing back from pre-harvest lows and soybean prices struggling to find traction to increase. However, the global supply and use situation for both crops continues to shift, with the US crops gaining in export sales and global supplies shrinking a bit, due to challenging weather conditions across the globe.
Currently, the market is focused on the weather conditions in South America and their impact on South American production. For the 2023-24 growing season, South American crops faced similar problems to US crops, drought conditions to start the year, but the weather improved enough that crop production was stronger than the previous year. For 2024-25, drought conditions have shifted once again, currently impacted Argentina a bit more than Brazil. Tables 1 and 2 show the latest global estimates from USDA and the major adjustments were in South American crops. For corn, the general picture is for slightly smaller global production due to small adjustments for both Argentina and Brazil. The latest update shaved 1 million tons or roughly 39 million bushels off of Argentina’s and Brazil’s corn supply. However, even with this cut, South American corn production is projected to still be higher this year. Combined, Argentina and Brazil are forecast to produce just over 6.9 billion bushels of corn this year, 157 million more than last year.
The global soybean situation is an ongoing series of records. Global production continues to increase with most of that growth outside the US. However, the weather issues in Argentina forced USDA to downgrade soybean production potential there by 110 million bushels. Paraguay is also experiencing drought and that forced USDA to move the soybean supply projection there to shrink 18 million bushels. But global soybean production is still set to increase by nearly one billion bushels, with the vast majority of that growth coming from Brazil.
The reductions in global supply projections do show avenues for US export growth and that has been occurring over the past few months. US corn export sales have increased nearly thirty percent year-over-year, while US soybean export sales have risen by roughly 12%. The increased sales have come from a variety of countries. But there is one market where US crop sales continue to fall, China. For corn, China has fallen from our 4th largest market at this time last year to our 26th largest market. However, that drop in sales has been more than made up by increased purchases by many countries. In fact, US corn is currently on pace to have its 3rd largest export year, only trailing the 2020 and 2021 marketing years. Arguably, it’s the strength of those export sales and the ability to replace Chinese purchases somewhat easily that has lifted corn prices. For soybeans, China is still the dominant market. And while overall sales are higher this year, sales to China continue to decline and soybean prices remain under pressure due to that. The threat of tariffs, both original and retaliatory, looms large over both markets for the next few months. However, with only a few of those tariffs actually implemented at this time, US crop export sales continue to grow.
The global crop production shifts were not the only news in USDA’s update. The change in the outlook for US beef production is also providing a little optimism for the crops. In January, USDA had projected a roughly 1.2-billion-pound reduction in US beef production for 2025. That would have sent total beef production below 26 billion pounds. Now, USDA projected a more modest 420-million-pound reduction in beef for 2025. This 780-million-pound shift in beef provides some hope to increase crop feed demand, as it indicates that many of the heifers USDA thought would be joining the breeding herd in the latter half of 2025 will instead continue to be headed to feedlots and processing plants. There will be a large beef production and feed usage adjustment in the near future, when that heifer retention occurs. But that looks to be a 2026 issue rather than this year. Feed usage is also being supported by projected increases in pork and broiler production.
For 2024-25 season-average prices, USDA is now at $4.35 per bushel for corn and $10.10 per bushel for soybeans. Currently, futures point to the 2024-25 season-average prices being in the $4.50 range for corn and the $10 range for soybeans. So, the markets are generally in line with USDA, but are slightly more optimistic for corn and slightly more pessimistic for soybeans. Those slight differences are likely based on the export trajectories of the two crops. Looking out to the 2025-26 marketing year, futures are showing relatively small improvements for both crops, with prices estimates around $4.70 per bushel for corn and $10.10 per bushel for soybeans. Given ISU’s production cost estimates for 2025, corn has a bit of profit potential, whereas soybeans are still below production costs. Thus, crop acreage is expected to shift away from soybeans and into corn. USDA’s early estimates showed corn gaining 1.4 million acres and soybeans losing 2.1 million acres. They will update those estimates later this month at the Ag Outlook Forum. Stay tuned.
The latest Market Outlook video is also provided for further insight on outlook for this month.
Chad E. Hart, extension economist, 515-294-9911, chart@iastate.edu
