US ELECTIONS: New president to take office amid low agricultural prices, falling farm incomes

The term of the new US president, who would assume office after the Nov. 5 elections, is expected to see increases in US marketing year 2024-25 agricultural output amid low prices and declining seasonal average farm incomes.

The Platts assessments from S&P Global Commodity Insights show US corn prices in October recovering month on month and soybean prices staying nearly unchanged, but both significantly lower than the year-ago levels.

The US season average farm price for corn, soybeans and wheat, defined as the average price received by farmers at the first point of sale, has been on a consistent decline since the last four years, with MY 2024-25 projections corresponding MY 2020-21 levels.

Production

** US corn production for MY 2024-25 (September-August) is projected at 386.18 million mt, down about 1% on the year, according to the World Agricultural Supply and Demand Estimates report Oct. 11.

** The USDA sees 138.4 million mt of corn going for ethanol and byproducts in MY 2024-25, a decrease of 533,400 mt compared to the previous year.

** US MY 2024-25 (September-August) soybean output is projected at 124.7 million mt, up 10% on the year, according to the USDA.

** The department projects MY 2024-25 soybean crush at 66 million mt, higher than 62.24 million mt in the previous year.

** The USDA projects MY 2024-25 soybean meal production at 51.78 million mt, 5.35% higher on the year, while soybean oil output is expected to reach 12.93 million mt, up 5.12% on the year.

** US MY 2024-25 soybean oil for biofuel is projected at 14 billion pounds, up 7.7% from the previous year.

** US MY 2024-25 (June-May) wheat production is projected at 53.65 million mt, up 9.3% on the year, according to the USDA.

Exports

** The US is expected to be the largest corn supplier, with MY 2024-25 exports projected at 59.06 million mt, marginally above 58.23 million mt in the previous year.

** For oilseeds, US soybean exports are expected to rise 9.15% year on year to reach 50.35 million mt in MY 2024-25, according to the USDA.

** The USDA projects MY 2024-25 soybean oil exports at 15.88 million mt, up 8.7% year on year.

** US MY 2024-25 wheat exports are projected at 22.45 million mt, a jump of 16.7% compared to the previous year, according to the USDA.

Ending stocks

** The USDA projects MY 2024-25 ending stocks for corn to rise 13.5% year on year to 50.77 million mt.

** US soybean ending stocks for MY 2024-25 are projected at 14.97 million mt, surging 60.8% year on year, according to the USDA.

** MY 2024-25 ending stocks for wheat are projected at 22.09 million mt, up 16.6% on the year, according to the USDA’s latest estimates.

Trade flow

** Since the beginning of MY 2023-24 on Sept. 1, 2023, until Oct. 9, 2024, of MY 2024-25, US corn exports totaled 48.3 million mt in volume, according to S&P Global Commodities at Sea.

** Japan was the largest corn export destination during this period, making up 24.6% of the total outflows, followed by Mexico at 20.2%, Columbia at 16.7% and China at 6%.

** As much as 71.8% of the corn exports were shipped through the US Gulf Coast, while 27.5% went through the US West Coast, according to CAS.

** For the same period, US soybean exports amounted to 46.7 million mt, CAS data showed.

** China was the largest buyer of US soybeans during the period, comprising 59.5% of the total purchases, followed by 2.2 million mt each for Japan and Germany.

** CAS data showed US soybean outflows through the USGC at 69.4% and USWC at 24.8% for the said period.

** US wheat exports from the beginning of MY 2023-24 on June 1, 2023, until Oct. 9, 2024, of MY 2024-25 amounted to a net volume of 26.1 million mt, according to CAS.

** As an export destination, the Philippines was the largest buyer during this period, accounting for 14.2% of the total outflows, followed by 10.7% for Japan, 9.96% for South Korea and 8.8% for China.

** USWC was the biggest supply route for US wheat exports in this period, making up for 60.1%, while the USGC accounted for 37.5%, according to CAS.

Prices

** Platts, part of Commodity Insights, assessed US CIF New Orleans corn at $194.80/mt on Oct. 18, up 80 cents/mt on the day.

** The Platts assessment showed US CIF New Orleans corn on Oct. 18 $3.15/mt higher than the month-ago level of $191.65/mt Sept. 18, but $29.60/mt below the year-ago level of $224.40/mt Oct. 18, 2023.

** Platts assessed US CIF New Orleans soybeans at $398.30/mt on Oct. 18, down $5.05/mt on the day.

** The Platts assessment showed US CIF New Orleans soybeans on Oct. 18 37 cents/mt lower than the month-ago level of $398.67/mt Sept. 28 and $112.07/mt below the year-ago level of $510.37/mt Oct. 18, 2023.

** US season average farm price in MY 2024-25 is projected at $4.10/bushel for corn, $10.80/bu for soybean and $5.70/bu for wheat, according to the USDA.

** Season average farm price projections for the current marketing year are closer to MY 2020-21 levels, indicative of declining producer margins in the US.

US season average farm prices:

*All values in $/bu | Source: USDA

** In MY 2020-21, the price received by farmers stood at $4.53/bu for corn, $10.80/bu for soybean and $5.05/bu for wheat