Acreage and stocks estimates push corn prices lower

Source: Farm Progress. The original article is posted here.

Acreage and stocks estimates push corn prices lower

By: Josh Maples, Mississippi State University

The annual Acreage report released last week by USDA-NASS included larger-than-expected corn acres which put downward pressure on corn prices. The report listed corn acres at 91.5 million acres which is 1.4 million acres higher than the March Prospective Plantings report projected. After corn prices surpassed $6 for the 2022/23 marketing year, prices are below $5 for the current marketing year, and are projected to be closer to $4 for the 2024/2025 marketing year.

While higher than previously projected, corn acres will be slightly lower than 2023 totals. However, advantageous growing conditions are supporting higher yield expectations when compared to 2023. The latest WASDE report included a yield estimate of 181 bushels per acre which would be higher than the 177.3 from a year ago. Stronger yields could lead to corn production for 2024 not being far off from the 2023 total.

Also released last week was the USDA Quarterly Grain Stocks Report which includes estimates of corn stocks held on the farm. Total corn stocks on June 1st were estimated at 5 billion bushels which is up 22 percent from 2023 and is the highest June 1 total since 2020. Most of these stocks are still being held on farms as farmers await better pricing opportunities. On farm corn stocks were just over 3 billion bushels, which is roughly 800 million more than last year and is the largest June 1 total since 1988.

Overall, the news is positive for livestock producers. The simple takeaway is that corn production and stocks are expected to be plentiful, and corn prices are back to lower levels after surging a few years ago. This should continue to bring relief to livestock feed costs and reduce the cost of gain for cattle. This year’s corn crop is not in the bin yet, so production risks remain that could influence price. But record-high cattle prices at a time when corn prices are expected to moderate is a welcome combination for cattle producers.

The Markets

Cattle market prices were generally steady to higher last week. Many markets will be closed this week for the holiday. Fed cattle prices reached a new record high last week at $195.81 per CWT average for negotiated fed steers.

Pasture Conditions

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