FOCUS ON AG

Written by Kent Thiesse

Farm Management Analyst
April 15, 2024

CURRENT GRAIN PRICES OFFER FEW OPPORTUNITIES

Since the completion of the 2023 harvest season, there have been very few good opportunities to market corn
and soybeans at favorable levels. This has resulted in a large amount of last year’s corn crop still in storage on
farms across the Midwest. This has left farmers with some very difficult grain marketing decisions for both the
grain that is still in storage, as well as for the 2024 crop that will be planted in the next few weeks. The
continued low corn and soybean prices resulted in greatly reduced profit levels for Midwest crop producers in
2023 and has lowered profitability prospects for 2024.

Nearby CBOT May corn futures closed at $4.28 per bushel following the release of the World Supply and
Demand (WASDE) report on April 11, which was the lowest on the date of the April WASDE report since
2020. This was $2.23 per bushel lower than the nearby futures price of $6.51 per bushel following the April
WASDE report in 2023, and compares to $7.84 per bushel in 2022 and $5.77 per bushel in 2021. Nearby CBOT
May soybean futures closed at $11.59 per bushel following the release of the WASDE report on April 11, which
was also at the lowest level since 2020. The 2024 CBOT soybean futures price compares to other recent April
CBOT prices of $14.97 per bushel in 2023, $16.65 per bushel in 2022, and $14.03 per bushel in 2021.

From 2021 until early 2023, nearby futures prices on the Chicago Board of Trade (CBOT) for both corn and
soybeans have been at the highest sustained levels since a similar period a decade earlier from 2011 to 2013.
This allowed for some excellent profit margins for Midwest corn and soybean producers in 2021 and 2022,
especially for farmers that had average or above average crop yields in those two years. The nearby CBOT corn
futures price exceeded $5.00 per bushel from early 2021 until late June of 2023, and remained above $6.00 per
bushel from early 2022 until late April of 2023. Prior to 2021, the nearby corn futures price had not been above
$5.00 per bushel since late Summer of 2013. In fact, from 2015 through 2020, nearby corn futures were below
$4.00 per bushel for a high percentage of the time.

The last extended period of higher levels of CBOT corn futures prices occurred from late 2010 through 2013.
Nearby corn futures rose above $5.00 per bushel in September of 2010, exceeding $6.00 per bushel by early
2011, and going over $7.00 per bushel by June of 2011. Corn futures stayed strong in 2012, only briefly dipping
below $6.00 per bushel, before reaching the all-time high of $8.38 per bushel during the intense U.S. drought
conditions in August of 2012. Nearby corn futures stayed above $7.00 per bushel for the balance of 2012 and
remained above $6.00 per bushel for most of the first half of 2013, before dropping significantly in the second
half of 2013, ending the year near $4.25 per bushel, which is similar to current levels. By the Summer of 2014,
nearby corn futures had dropped to near $3.50 per bushel and only briefly topped $4.00 per bushel during the
next several years.

Similar to corn, the nearby CBOT soybean futures price exceeded $13.00 per bushel from early in 2021 until
late in 2023, except for a few months in the Fall of 2021 and a short period in the Fall of 2023. Nearby soybean
futures prices exceeded $14.00 per bushel most of the time in 2022, trading above $16.00 per bushel for a few
months in the Spring and early Summer that year. Prior to late 2020, the nearby soybean futures price had not
exceeded $12.00 per bushel since late Summer of 2014. During the last grain price “boom period” from 2011
through 2013, nearby soybean futures exceeded $13.00 per bushel for much of that period. During the drought
year of 2012, nearby soybean futures traded above $16.00 per bushel in July and reached the all-time high
soybean price of $17.68 per bushel in September that year. Nearby soybean futures prices remained near or
above $13.00 per bushel for most of 2013 and the first half of 2014, before dropping to near $10.00 per bushel
during the second half of 2014. Soybean futures traded near or below $9.00 per bushel much of the time during
2018 and 2019, due to the effects of the U.S. trade war with China.
The current downturn in the CBOT prices for both corn and soybeans has been driven by a combination of
increasing U.S. and World grain stocks, fairly stable domestic and export demand for both commodities, and
prospects for favorable U.S. corn and soybean production in 2024. Recent grain prices have also been affected
by corn and soybean production estimates in South America, which can have a big impact on World grain
supply and have a significant effect on U.S. grain export levels. There has also been some uncertainty in the
grain markets in recent months due to the continuing Russian war in Ukraine and the growing tension in the
Middle East.

The “basis” level for local corn and soybean cash price bids in some areas has remained at fairly tight levels in
late 2023 and in early 2024. The “basis” is the difference between the local cash price being offered in a given
month and the closet CBOT futures price. Many processing plants and local elevators in the Corn Belt offered
cash prices with a positive basis at certain times during 2022 and 2023. The current basis level for cash corn in
Southern Minnesota has been highly variable in recent weeks, with some ethanol plants and feed mills offering
cash prices that are near or above the nearby CBOT futures price for a short time, while other locations have
cash prices that are $.10 to $.30 per bushel below the nearby CBOT price. The soybean basis level in the region
at soybean processing plants has been $.05 to $.15 per bushel below the CBOT nearby futures price, while basis
levels at local grain elevators has generally been $.30-$.50 under CBOT futures prices.

The corn basis level for the Fall of 2024 has widened out to approximately $.30 to $.50 per bushel under the
CBOT December futures price at local ethanol plants and grain elevators in Southern Minnesota. The soybean
basis for the Fall of 2023 has been near $.40 per bushel under at soybean processing plants and $.50 to $.75 per
bushel below the CBOT November futures price at grain elevators. This is more typical of Spring basis levels
that existed prior to recent years for corn and soybeans. The basis levels at local grain elevators and processing
plants are important to farm operators for determining pre-harvest grain market strategies in a given year.

Once farm operators reach planting season, they pay close attention to “new crop” December corn futures and
cash prices for harvest season and beyond at local grain elevators and processing plants. December corn futures
closed at $4.66 per bushel on April 11, which compares to $5.59 per bushel in mid-April a year ago, $7.35 per
bushel in 2022, and $5.77 per bushel in 2021. Cash bids for Fall delivery of the 2024 corn crop at local grain
elevators and ethanol plants in Southern Minnesota on April 11 ranged from $4.15 to $4.35 per bushel at many
locations, compared to $5.00 to $5.30 per bushel a year ago. In 2023, new crop cash corn bids at most Upper
Midwest locations dropped below $5.00 per bushel by early August and have not exceeded that level since then.

Prices for 2024 “new crop” CBOT November soybeans closed at $11.64 per bushel on April 11, which
compares to $13.13 a year ago, just over $15.00 per bushel in mid-April of 2022 and $12.63 per bushel in 2021,
Cash bids for 2024 “new crop” soybeans at grain elevators in Southern Minnesota on April 11 ranged from
$10.60 to $11.00 per bushel, with forward prices near $11.25 per bushel at soybean processing plants. These
prices are about $1.50 per bushel lower than Fall harvest soybean bids a year ago. New crop cash soybean bids
were above $12.50 per bushel at local grain elevators for most the last half of 2023 and were near $13.00 per
bushel much of the time at soybean processing plants, before dropping to cash prices below $11.50 per bushel
by early 2024.

Grain marketing decisions for the 2024 crop year will likely be very difficult for most producers, with current
cash prices below breakeven levels. For many Midwest crop producers, the breakeven levels to cover direct and
overhead expenses on cash rented land in 2024 will likely be near $5.00 per bushel for corn and over $11.00 per
bushel for soybeans. In many years, the Spring and early Summer months offer some of the best opportunities
to forward price “new crop” corn and soybeans. On the other hand, farmer operators do not want to miss the
opportunity for a grain price “run-up” later this year, such as has occurred in some recent years when U.S. crop
yields were lower than expected. If there is not a drought or other crop issues in the U.S. in 2024, corn and
soybean prices are likely to follow a more typical seasonal price pattern as we progress toward harvest this year.
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Note --- For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions
Phone --- (507) 381-7960; E-mail --- kentthiesse@gmail.com