Demand up, but prices still fall

By Chad Hart, extension crop market economist, 515-294-9911 | chart@iastate.edu

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After a short reprieve in April and May, topping out around Mother’s Day, the markets continued their descent towards prices we have not seen since the early days of COVID. The price drops have accelerated with the news of above-average crop ratings and some additional acreage planted. Flooding and hailstorms in the western Corn Belt have thus far done little to stall the price fall. And the upcoming forecast shows cooler temperatures and good growing conditions at a critical crop development time. USDA’s latest update did show a boost in corn usage, but left soybean usage at previous levels. Prices will likely continue to falter until usage significantly increases or crop ratings fall off.

For corn, the end of June reports revealed more corn plantings and more corn in on-farm storage than traders expected. Compared to the March Planting Intentions report, the June Acreage report showed 1.5 million more acres for corn in 2024. Given USDA’s trendline yield, that potentially added roughly 240 million bushels to 2024 corn production, putting the 2024 crop north of 15 billion bushels. The June Grain Stocks report showed more 2023 corn in storage than expected, but also showed more usage over the March-May period. The July WASDE report outlined that increased usage, adding 75 million bushels to feed and residual use and 75 million bushels to exports for the 2023 crop year. The usage increases brought 2023-24 corn ending stocks down below 2 billion bushels. That news perked the corn market up briefly, but it didn’t last. USDA held its 2023-24 season-average price at $4.65 per bushel.

Table 1. US corn supply usage

The July WASDE report also contained some demand adjustments for the new crop. The old crop usage gains were extended into the new marketing year. Feed and residual use was boosted by 75 million bushels. Exports were increased by 25 million. The additional 100 million bushels of usage lifted total projected usage to a record 14.905 billion bushels. But with another 15 billion bushel crop potentially on the way, 2024-25 ending stocks could still exceed 2 billion bushels. Given the high projected stock level, USDA lowered their 2024-25 season-average price estimate by 10 cents to $4.30 per bushel. That’s 35 cents lower than the previous year and the lowest projected price since 2019.

While corn gained ground from March to June, soybeans gave a little back. The June Acreage report found roughly 400,000 fewer soybean acres than the March report. At USDA’s trendline yield, that lowered projected soybean production by 15 million bushels. The adjustment to the 2023 soybean crop was a 5 million bushel cut in imports, resulting in the same size cut in 2023-24 ending stocks. Despite the small cut in ending stocks, USDA lowered its 2023-24 season-average price by 5 cents to $12.50 per bushel.

Table 2. US soybean supply and usage

Beyond the acreage move, there were no other adjustments for the 2024-25 soybean crop. Soybean crush held at 2.425 billion bushels and exports stayed at 1.825 billion bushels. Projected soybean usage is increasing year-over-year, but the gains in production are overwhelming that growth. So, 2024-25 soybean ending stocks are projected at 435 million bushels, up 90 million from this year and roughly 170 million from 2 years ago. With the increasing stocks, USDA lowered the 2024-25 season-average price estimate by 10 cents to $11.10 per bushel.

As I discussed last year at this time, the two sets of numbers I focus on are USDA yield and export estimates. Advance export sales for both corn and soybeans have been weaker than average, and even somewhat below last year’s pattern. Traders will be looking for substantial increases in export sales as harvest approaches. But the main focus of traders for the next few weeks will be on crop conditions and yield potential. While USDA did not adjust their yield estimates this month, we will see some adjustments over the coming months. Right now, you could argue that the losses in the western Corn Belt have been offset by gains in the eastern Corn Belt, but will that thought continue to hold. Figures 1 and 2 show the percentages of the national crops rated “Good to Excellent” in USDA’s weekly Crop Progress reports. The darker blue region in each graph shows the range in that percentage since 1986. The light blue line is the weekly rating for the 2023 crop and the black line is the five-year average rating. The red line displays the ratings for the 2024 crop. Week 28 is the week of July 8-14. As Figure 1 shows, the 2024 corn crop has been rated above both last year’s crop and the five-year average. For the national crop, the rating has maintained the gap above the average. For the Iowa crop, the 2024 rating is slipping towards the five-year average. Typically, corn ratings above the five-year average point to corn yields this fall being at or above trendline.

Figures 1 and 2 crop ratings

In the past, I have used these ratings to create a rough estimate of the final national yield, based on a regression using this percentage and a simple time trend. The model indicates 184 bushels per acre and USDA’s trendline is 181 bushels per acre. Based on historical performance, the model makes its best projection given the “Good to Excellent” rating in week 29, roughly lining up with the week after most of the nation’s corn has pollinated. Right now, it would take a substantial drop in the “Good to Excellent” ratings to drive the model estimate below trend.

Figure 2 displays the same data for soybeans. Above (below) average ratings tend to lead to above (below) average yields. While the rating signals the potential for above-trend soybean yields, the relationship is not as well defined as it is for corn. The predictive power of the soybean ratings is not as strong and it slowly builds throughout the growing season. Weather conditions later in the growing season seem to have a stronger impact on soybean yields, relative to corn.

Traders have concentrated on the remaining stocks from last fall, the above-average crop ratings, and the disappointing advance export sales. Over the past month, Dec. 2024 corn futures have dropped from $4.70 per bushel to $4.04. Nov. 2024 soybeans have fallen from $11.50 per bushel to $10.40. Any hope for a price recovery is tied to either smaller crops or increased demand, likely via exports. Thus far, neither of those is projected to be strong enough to move the markets higher. And while I still feel there will be the potential for profitable sales later in the 2024/25 marketing year, the short-term outlook shows losses for now.

Ag Decision Maker

An agricultural economics and business website.

Crop Insurance Coverage: Frequently Asked Questions in Times of Floods

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by ISU Extension and Outreach Farm Management Field Specialists

Many producers have questions regarding what options they have under their multiple peril crop insurance (MPCI) policies. The following are questions that are commonly asked by producers with MPCI that are facing replant, delay, and prevented planting decisions.

Question: How many of Iowa’s corn and soybean acres are covered by crop insurance?

Flooded, unplanted field

Iowa farmers planted 23.0 million acres of corn and soybeans in 2024. Over 90% of those acres have been insured using Revenue Protection (RP) multi-peril crop insurance. These insurance policies can guarantee various levels of a percentage of the farm’s average yield times the higher of the projected price (average futures price in the month of February) or the harvest price (average futures price during the month of October), using the November 2024 futures contract for soybeans and the December 2024 futures contract for corn. Most farm operators carry a guarantee of their APH from 70% to 80% level of coverage. The projected prices (futures average prices in February 2024) were $4.66/bu. for corn and $11.55/bu. for soybeans, respectively.

Question: What should an insured farmer do once a crop loss is recognized?

  1. Notify the insurance agent within 72 hours of the discovery of damage, but not later than 15 days after the end of the insurance period. A notice of loss can be made by phone, in writing, or in person.
  2. Continue to care for the crop using “good farming practices” and protect it from further damage, if possible.
  3. Get permission from the insurance company, also referred to as your Approved Insurance Provider (AIP), before destroying or putting any crop to an alternative use.

Question: If I am prevented from planting by the final planting date, what are my choices under the terms of my policy provided I meet all other policy provisions and I do not qualify for double cropping?

You may:

  • Plant the insured crop during the late planting period, if applicable, and insurance coverage will be provided. The late planting period is generally 25 days after the final planting date but varies by crop and area. For most crops, the production guarantee is reduced 1% per day for each day planting is delayed after the final planting date.
    • May 31 – Final planting date for Corn
      • Late planting period – June 1-25
    • June 15 – Final planting date for Soybeans
      • Late planning period – June 16-July 10
  • Plant the insured crop after the late planting period (or after the final planting date if a late planting period is not applicable), and insurance coverage will be provided. The insurance guarantee will be the same as the insurance guarantee provided for prevented planting coverage.
  • Producers may elect to plant an approved cover crop after the late planting period. Program changes made in 2021 allow producers to hay, graze, or cut the cover crop for silage, haylage, or baleage before or after November 1 (not exceeding the 12 months period after which it can be considered forage) and receive the full indemnity payment for their first crop. The RMA Frequently Asked Questions webpage has more details on cover crops usage with prevented planting coverage.
  • Plant another crop (second crop) after the late planting period, or after the final planting date if no late planting period is applicable, and receive a prevented planting payment equal to 35% of the prevented planting guarantee.
  • Leave the acreage idle (black dirt) and receive a full prevented planting payment.

Question: What if the field remains underwater for an extended period of time?

If your field is under water for an extended period of time let your agent know. The agent can help file a notice of damage and have the insurance company take a closer look.

Question: Isn’t there a 20-20 rule for crop insurance coverage?

Yes, to qualify for an indemnity payment under the replanted, delayed or prevented planting provisions, a minimum area of 20 acres or 20% of the insured unit, whichever is smaller, must be affected.
A unit could be a field or a farm – if you elected an optional whole farm or basic unit. An enterprise unit could also have been elected, which reflects all the corn acres or all the soybean acres grouped together in a particular county.

Question: I chose enterprise units to save on premium. Can I now change to basic or optional units because flooding has damaged my planted crop acreage on a few fields?

Because unit structure impacts the premium cost, and in the case of enterprise units, also the premium subsidy, the policyholder’s decision to elect enterprise units is made no later than the sales closing date to reflect the binding contractual agreement between the two parties on or before March 15, 2024.

Question: Who will appraise the crops and assess the loss?

The crop insurance company will assign a crop insurance adjuster to appraise the crop and assess the loss. The insured farmer must maintain the crop until the appraisal is complete. If the company cannot make an accurate appraisal, or the farmer disagrees with the appraisal, the company can have the farmer leave representative sample areas.

These representative sample areas of the crop are to be maintained – including normal spraying if economically justified – until the company conducts a final inspection. Failure to maintain the representative sample areas could result in a determination that the cause of loss is not covered. Therefore no claims payment to the producer.

Once appraised the crop can be released by the company to be:

  • Destroyed – through tillage, shredding or chemical means; or
  • Used as silage or feed.

Question: Once released, may I harvest my corn as silage for feed?

Check with your crop insurance company. In a county where corn can be insured as grain only, the corn will be released, or harvested as silage and/or sold as feed. Any grain will be counted as production for your claim. In a county where corn can be insured as silage, the harvested silage will be counted as production.

Question: What is the difference among insurance units?

Many farmers have chosen to insure their crops using enterprise units in order to pay less expensive insurance premiums. Under enterprise units, losses are calculated by crop by county. Therefore, all the corn planted by a farmer is a given county would be added together to determine a loss. If a farmer has chosen optional units, then losses are calculated by crop by field unit. Premiums are typically higher if choosing optional units, but a good yield on one field does not cancel out the loss on another field.

Important Point: Do not destroy a crop, comingle grain from previous years or different owners or harvest for silage before contacting your insurance agent. Bins must be measured before comingling grain. When in doubt call your agent.

Question: What if I need to talk to someone about more than my crop insurance concerns?

Flooding and other unexpected impacts due to weather outside our control create stressful situations for everyone involved. Recognize and take action to mitigate personal, family, and business stress. If the capacity to address weather related impacts becomes overwhelming and unmanageable, seek professional help from a mental health agency, church pastor, private counselor, or crisis hotline. Iowans can contact ISU Extension and Outreach Iowa Concern, www.extension.iastate.edu/iowaconcern/; 1-800-447-1985, for help and referrals for dealing with stress.

Additional ISU Extension Resources

More information can be found in Ag Decision Maker Files A1-57, Delayed and Prevented Planting Provisions or A1-48 Current Crop Insurance Policies. An electronic Decision Tool spreadsheet is also available to help analyze alternative actions. Producers should communicate with their crop insurance agent before making decisions about replanting or abandoning acres.

Flood damaged crops, crop insurance payments, and lease contracts

A Resource List for Crop Producers Impacted by Recent Flooding

Following Flooding: Managing Additional Stress

Iowa Beef Center: Flood related resources


For more information about managing flood damaged cropland as the waters recede and the situation is assessed is available from Iowa State University Extension and Outreach.

Ag Decision Maker

An agricultural economics and business website.

Flood damaged crops, crop insurance payments, and lease contracts

Some Iowa corn and soybean producers are facing substantial, if not complete crop losses, due to flooding and other natural disasters in 2024. Fortunately, in recent years, well over 90% of Iowa’s corn and soybean acres are protected by multiple peril crop insurance. USDA RMA data from 2023 reported 95% of corn and soybean acres in the state were protected by Multiple Peril Crop Insurance (MPCI), and 15% of these acres also had additional companion program coverage, such as Supplemental Coverage Option (SCO), Enhanced Coverage Option (ECO), or Margin Protection (MP).

Most Iowa producers purchase crop insurance policies with a 75% or 80% level of coverage. This means that if crops are a total loss, the producer must withstand the first 20-25% of the loss. In 2023, 96% of the crop acres insured in Iowa were covered under MPCI Revenue Protection policies that offer an increasing guarantee if prices increase between February and October. So far, this has not shown to be a factor for 2024 crops, with current November/December Futures trading below the spring projected price guarantees of $4.66 per bushel for corn and $11.55 per bushel for soybeans.

Read more in the July Ag Decision Maker newsletter article and see guidance on addressing the agronomic impacts for flooded soils to restore field conditions or to plant a suitable cover crop is available for Iowa landowners and tenants.

Additional information about managing flood damaged cropland as the waters recede and the situation is assessed is available from Iowa State University Extension and Outreach.

Ag Decision Maker

An agricultural economics and business website.

Ag Decision Maker June Updates

Newsletter and website updates

June Newsletter (pdf)

Information File & Decision Tool Updates

Crops — Costs & Returns

Crops — Machinery

Whole Farm – Costs & Returns

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