Recent corn price increases have come despite general pessimism about the overall state of the corn market. This article reviews data points supporting the recent rally, including grain stocks and export sales information, and considers what they mean for corn prices dynamics in the current marketing year.

Midwest crop producers have experienced a significant downturn in corn, soybean, and wheat prices since the beginning of the year and farm incomes are expected to be much lower in 2024 than they have been the last three to four years. Moreover, current expectations are that prices will continue to remain at or below the cost of production for at least a couple more years. Consequently, a key question being asked is as follows: “who is the most vulnerable financially during this downturn”?

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.

For all nine US regions, land in farms has declined in the 21st Century. Much has been written and said about the Midwest’s loss of cropland. However, cropland’s share of Midwest farmland and thus its relative importance in the Midwest increased. Specialization occurred in the use of farmland while pastureland declined the most in all nine regions. This decline was likely facilitated by the growth in confinement livestock operations.

Current projections suggest three consecutive years of negative farmer returns to corn and soybeans on cash rented farmland in Illinois from 2023 to 2025. Alternative lease arrangements, such as variable cash or share leases, provide more risk sharing to the farmer. However, today’s article shows that the current environment of relatively low prices and high costs implies negative returns even for a typical variable cash lease and returns just under break-even for a standard 50/50 share lease.

The USDA’s September Hogs and Pigs report holds few surprises. As expected, the September 1 inventory of all hogs and pigs, at 76.5 million head, is up 1.69% from last quarter and 0.46% from last year, while the breeding herd is up 0.6% from last quarter but down 2.2% from a year ago, and market hogs are 1.78% higher than last quarter and 0.69% higher than last year.