December corn futures are averaging $4.21 per bushel this month, slightly above last year’s $4.12, but when adjusted for inflation, this represents the lowest July level since 2006. Similarly, November soybeans, averaging $10.20 per bushel, mark the lowest inflation-adjusted July price since 2006. These declines reflect a 30% drop in corn prices since mid-2022, despite production costs only decreasing by 3% nominally and 11% when adjusted for inflation. U.S. farmers face challenges as input costs remain high relative to these low commodity prices.
The USDA forecasts a 24% rise in U.S. corn ending stocks for 2025-26, reaching 1.66 billion bushels, compared to a projected 24% decline for the 2024-25 marketing year, ending August 31. However, market sentiment suggests stocks could approach 2 billion bushels due to strong yield potential, further pressuring prices. For soybeans, the USDA predicts an 11% decrease in 2025-26 ending stocks to 310 million bushels, a potential price-supporting factor if August weather impacts yields negatively.
Karen Braun, a market analyst, noted: “The market may very well be trading a 2025-26 carryout closer to 2 billion bushels given the huge upside considerations for corn yield, aiding the case for low prices.” This reflects the influence of anticipated large harvests on current pricing trends. Despite a recent uptick in prices this week, both corn and soybeans remain significantly below February highs, when insurance guarantees for U.S. farmers are set.
The pressure on prices is compounded by strong global competition, particularly from Brazil’s expanding grain and oilseed production, which challenges U.S. exporters’ market share. Since February, December corn has fallen 10%, a milder decline than in recent years, while November soybeans are down 3%, consistent with historical trends. These price movements align with favorable U.S. crop conditions and ample global supply, as reported by Reuters and Farm Futures.
The combination of high U.S. yields and global supply dynamics continues to shape the market, with potential weather shifts in August being a critical factor for soybean prices. This situation underscores the challenges for U.S. farmers navigating low prices amid high production costs and competitive global markets.
