US corn growers could sink deeper into red on downturn

Market: Agriculture
03/09/24

A more than 10pc drop in new-crop corn futures since early May has chipped away at early-season sales revenue estimates, potentially pushing domestic growers deeper into the red amid another season of elevated expenses.

US corn farmers face a $1.77bn cut in projected sales revenue based onpreliminary estimates for the 2024-25 crop as growers vie to liquidate old-crop inventories — pressuring new-crop 2025 futures values to the lowest level within the last two years.

The incremental dip in projected revenue has outpaced lower expenses and steepened projected losses for domestic corn growers, with estimated losses on a per-acre basis primed to slump to -$111.86/acre before considering government assistance, according to an Argus analysis of US Department of Agriculture (USDA) data.

Current conditions mark a reversal from the prior three seasons for corn growers and has sparked concern for another lengthy downturn in grain markets, according to Purdue University's Ag Economy Barometer survey.

Farmers surveyed in August "expect this year's farm income downturn to last for an extended period" after enjoying multiple seasons of above-$200/acre profits from 2021-22 — which were preceded by seven consecutive years of double-digit losses from 2014-20, according to the USDA.

"Over the last several months, farmers' concerns about weakening commodity prices have become more evident," Purdue reported today. "In the August survey, producers' concerns about commodity prices nearly eclipsed what has consistently been their top concern: high input prices."

Growers this year have grappled with the weakening grains market by extending and taking out new non-real-estate loans. Demand for new operating loans was above normal, outpaced real estate loan demand through the first half of the year and is expected to remain strong through the third quarter, according to the Federal Reserve Bank of Chicago — which represents growers from Iowa, Illinois, Indiana, Michigan and Wisconsin.

Corn prices will continue to face above-average inventories and record yield estimates, which has forced growers to liquidate inventory to clear space for this season's crop.

A silver lining, though, is lower acreage from other major corn producing countries, which could stem the current downtrend in corn values.

Argentina, which is the third-largest exporter of corn, could slash planted acreage by up to 50pc on price and pest concerns, while Brazilian farmers face worsening weather conditions that could erode planted area for the upcoming season.

By Connor Hyde

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

21/01/25

Major NOLA terminals closed for winter storm

Houston, 21 January (Argus) — The port of New Orleans remains closed on Tuesday afternoon due to US Gulf coast snow storms, causing terminals to shut or declare force majeures. Port officials cut off water supplies to port facilities beginning 19 January because of freezing temperatures, significant snowfall and high winds forecast by the National Weather Service (NWS). Operations are expected to be down at least for the rest of today. Host's United Bulk Terminal location at Nola declared force majeure on 20 January because of an expected 3-6 inches of snowfall. The port of Lake Charles in Louisiana also closed on 20 January and the Sabine-Neches Waterway on the Texas-Louisiana border was closed on 21 January. Associated Terminals at Nola closed its doors early on 21 January due to the storm. The company said vessels will be discharged once weather conditions improve and personnel are able to return to the site, but did not give a specific date. Major barge line ARTco, the transportation arm of ADM, shut down operations as well and is anticipated to return to 22 January if weather permits. CGB Barge has also halted operations in New Orleans and is waiting for conditions to improve before resuming work. Arctic conditions are anticipated at the port through Thursday, according to the NWS. Travel will be hazardous due to the snow, ice and wind chill of up to 20mph. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Find out more

News

Brazil pushes climate leadership in Davos

21/01/25

News

21/01/25

Brazil pushes climate leadership in Davos

Sao Paulo, 21 January (Argus) — Brazil is looking to build an "ecological legacy" and called on richer countries to invest in its growing sustainable markets as it prepares to host the UN Cop 30 climate summit later this year, government representatives said at the World Economic Forum (WEF) in Davos. "The last two Cop editions were held in countries where most of their economy relies on oil exploration," northern Para state governor Helder Barbalho said at WEF today. "For the first time this year, we will have the international community debating climate change and economy while standing in the largest rainforest in the world." Brazil will host Cop 30 in November in Para's capital Belem, at the mouth of the Amazon rainforest. It tapped veteran diplomat Andre Aranha Correa do Lago , an advocate of sustainable development, to preside over the summit. Also speaking at WEF, Brazil's supreme court president Luis Roberto Barroso focused on government efforts to prevent environmental crimes and regulate new sustainable market. Throughout President Luiz Inacio Lula da Silva's third administration — which began in 2023 — Brazil approved its carbon credit trade market as well as offshore wind generation and biofuels regulation . Barroso said that the Brazilian judiciary branch, along with the legislative and executive power, established ecological and landownership matters as major priorities. Para's governor touted its major achievements from 2019-2024. The state is Brazil's former largest largest greenhouse gases (GHG) producer, but has reduced its emissions. "People used to think that, in order to increase income, we should destroy our forests and open space for other activities," Barbalho said. "Today, we know how to take advantage of our forests to create sustainable jobs, new ways of income and to diversify our economy while preserving current flora and fauna." Although Para increased its cattle raising by 3mn from 2021-2024, it cut deforestation in Amazonian lands by 42pc because of sustainable practices and financial incentives for farmers to preserve native vegetation, Barbalho added. The state is also focusing on the carbon credit market, the governor said. Recently, Para sold carbon credits equivalent to over 12mn metric tonnes of CO2 , raising $1bn to be used in continuous emission-reducing practices thanks to state-issued policies. New growth Still, Brazil cannot meet its previous Cop pledges with only its current forests and without reforestation. Almost 50pc of Brazil's GHG emissions came from land-use and forestry as of January 2024 . In November, Para created Brazil's first forest restoration concession, which will allow companies to participate in an open call to reforest and restore the damaged area of the Triunfo do Xangu environmental reserve. Once the restoration is done, the company will generate revenue through carbon credits from the recovered area. Brazil — which saw increased deforestation during president Jair Bolsonaro's administration in 2019-2022 — has been targeting reforestation as part of its efforts to meet its emissions-reduction target. Brazil's mines and energy minister Alexandre Silveira is also in Davos and seeking to attract investment in renewable energy-fueled data centers in Brazil, the ministry told Argus . The data center plan is under development and will be concluded by the end of the first half. Data centers consume up to 2pc of all power generated in the world and are responsible for 0.3pc of all CO2 emissions, according to the US International Energy Agency. But Barroso ended the panel saying that "climate change deniers made a triumphant return." On Monday, US president Donald Trump pulled the US out of the Paris Climate agreement . "I'm immediately withdrawing from the unfair, one-sided Paris climate accord rip-off," Trump said at a rally later in the day. "The US will not sabotage their own industries while China pollutes with impunity." Trump is scheduled to speak at Davos on 23 January. Throughout his campaign, Trump repeated the slogan "drill, baby, drill" as part of his support for fossil fuel production in the US. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Strong start to Australia's wheat export season in Asia

20/01/25

News

20/01/25

Strong start to Australia's wheat export season in Asia

Paris, 20 January (Argus) — A race to meet southeast Asian demand is driving Australian wheat prices lower as traders, spurred by a China-shaped hole in buying, wrestle with South American supply for a stronger grip on one of the world's major wheat importing regions. Australia is scheduled to load over 1.3mn t/month of wheat in December and January, with over 40pc heading to southeast Asia, according to Argus -aggregated data. This suggests a surge in activity after a relatively slow start to 2024-25 (October-September), with customs data — available to the end of November — showing combined exports in October and November at just 1.7mn t, down by a third on the year. This drop was partly down to a lack of shipments to China, which took just 12,000t of Australian wheat in October-November, compared with 450,000t a year earlier. The pressure on Australian exporters is twofold. As well as a lack of Chinese demand, a larger Australian crop this year means higher exports forecast this season — at 25mn t for 2024-25, a notable jump from the 19.8mn t estimated over 2023-24, according to the US Department of Agriculture (USDA). This could also mean a greater amount of feed grade Australian Standard White (ASW) wheat in the country's exports, market participants said, bringing Australian wheat sellers into direct competition with US and South American corn. Australian wheat began competing in southeast Asia again in mid-December as sellers cut prices to compete with South American supply . The rise in activity was somewhat helped by sliding freight rates and a lower Australian dollar-US dollar exchange rate, which encouraged farmer selling, allowing traders to break out of a situation in late November where heavy cif commitments for December loading had yet to be covered on the domestic market. In the past two weeks, importers in southeast Asia have finalised the bulk of their purchases to cover February-March with a mix of ASW wheat (basis 11pc moisture and 9pc minimum protein content), and competing 11.5pc protein wheat from South America. Opportunities for feed wheat sales Demand for Australian export feed wheat — ASW with no minimum protein content — is likely to depend largely on prices for corn, particularly new-crop corn from Argentina and Brazil. Sellers of ASW without minimum protein content have attracted a steady stream of demand in southeast Asia, with prices comfortably below feed wheat available from South America. This is particularly helped by a seasonal drop in freight rates, with those between Australia and Thailand down to under $15/t, according to market participants. Australia sold three Panamax-sized cargoes of feed wheat to Thailand last week, for shipment in May-July. Prices were just below $260/t cfr, traders said. For now, South American corn is struggling to compete. Argentina's spot corn price even rose above the corresponding 11.5pc milling wheat contract on a fob upriver basis last week ( see chart ). But South American corn could pose more competition in the medium term. Argentinian corn is at risk of drought , with some potential relief as forecasts show rain over the next seven days. Brazilian corn is also at risk, from wet weather causing delays to the soybean harvesting and in turn to safrinha corn planting, possibly even resulting in lower acreages . Prices currently reflect the very real risk of unfavourable weather weighing on the outlook for Argentina and Brazil's upcoming crops. But if weather conditions improve to allow the season to continue without a significant change in production outlook, prices could succumb to even greater pressure at harvest time. In either scenario, US corn prices remain a key driver in the short term as private exporters continue to sell at pace . By Anna Sneidermane and Claudia Jackson Argentina's spot grain prices, fob upriver $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Sharp increase in Italian Pome imports continue

20/01/25

News

20/01/25

Sharp increase in Italian Pome imports continue

Barcelona, 20 January (Argus) — An increase in Italian imports of palm oil mill effluent (Pome) continued in November, according to customs data. The rise came ahead of any impact from Indonesia's decision to suspend export permits for Pome and used cooking oil (UCO). Italian Pome imports under the 15220099 import code rose to 205,000t in January-November from 65,000t on the year. There is some lack of clarity on whether imports have increased or suppliers have improved adherence to import codes. November imports more than doubled on the year to over 12,000t (see chart) . According to Kpler data, cargoes of Pome — from Indonesia and Malaysia — continued to arrive in December and January at Italian ports that are home to hydrotreated vegetable oil (HVO) production. Italian HVO output was reduced in the second half of the year by margins described as the worst on record . This appears to have encouraged Eni and other regional producers to undertake some planned works and trim throughput. Kpler data show five seaborne cargoes totalling 30,000t leaving integrated Eni's 650,000 t/yr Gela HVO unit in October-December. This compares with around 90,000t shipped in the second quarter, 85,000t in the second and 70,000t in the first. Italian imports of palm oil continued to fall, with 915,000t imported in January-November, down by 16pc on the year, and the lowest in eight years. Industrial-use palm oil fell by 30pc year on year to 510,000t. Given previous Argus tracking, Kpler, shipping and port data it is highly likely that part of this decline in industrial palm oil is actually the correct coding of Pome. While Pome imports increased, deliveries of fatty acid distillates (Pfad) were lower by 24pc on the year to just under 510,000t in January-November. Some mislabelling of Pome as Pfad may also occur. Italian imports of UCO fell to 55,000t in the first 11 months of last year from 80,000t on the year. There may also be some mislabelling in this market. With Italy using significant volumes of Pome in biofuels production there may be some uncertainty over the impact of recent proposed changes in export permit allowances by Indonesia. This could support alternative feedstock procurement. Eni said previously it was aiming for 100,000t of alternative feedstock supply from its own initiatives last year. Italy's total castor oil imports were 20,000t in January-November of which 6,500t came from Eni's cultivation in Kenya. None arrived in November. Cottonseed oils from Kenya were lower at 5,000t in January-November, with no arrivals since August. Eni has said it plans alternative feedstock cultivation in several other African, Asia-Pacific countries and Italy, but production volumes remain opaque. By Adam Porter Italy biofuels feedstock 000t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Argentina’s soy, corn crops deteriorate on dry weather

17/01/25

News

17/01/25

Argentina’s soy, corn crops deteriorate on dry weather

Sydney, 18 January (Argus) — Argentina's soybean and corn crop conditions have continued getting worse because of ongoing dry weather, according to the Buenos Aires Grain Exchange (Bage). Corn and soybean planting was nearly complete as of 15 January, with 95pc and 98pc of areas sown, respectively, but moisture levels and crop conditions have worsened further after declining last week . Meanwhile, the exchange kept its estimate of Argentina's wheat output unchanged at 18.6mn t. Soybeans Soybean crops rated "good-to-excellent" fell by 17 percentage points (pp) to 32pc on the week. Crop areas under "adequate-to-optimal" moisture conditions shrank significantly, by 17pp on the week to 60pc, about 32pp below levels at this time last year. Corn Corn crop areas rated "good-to-excellent" declined slightly on the week by 3pp to 39pc, while areas rated "regular-to-bad" increased by 5pp to 14pc. Nationally, the share of corn areas under "adequate-to-optimal" moisture conditions fell by 13pp the week to 64pc because of continued dry weather and warmer temperatures in producing regions. But Bage said it expects forecast rainfall in coming days to lift moisture levels and halt the further deterioration of crops. Wheat Bage maintained its wheat production estimate of 18.6mn t for the 2024-25 (December-November) season and reported that the harvest was completed. Output was 7pc larger than last season and 6pc above the five-year average, it said. The US Department of Agriculture estimates Argentina's wheat output for 2024-25 at 17.5mn t. By Edward Dunlop Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more