CHALLENGING GRAIN MARKETING DECISIONS
Many farm operators will tell you that making grain marketing decisions is one the most difficult parts of farming.
This is especially true during times of stagnant grain markets such as have been occurring in recent months. In
July of 2023, December corn futures on the Chicago Board of Trade (CBOT) for the 2023 corn crop were trading
above $5.00 per bushel; however, December cash corn futures have not topped that level during the first few
months of 2024. In addition, the basis levels at many ethanol plants and grain elevators has widened in 2024
compared to a year ago. As a result, local corn prices being offered for the 2023 corn that is still in storage and
being marketed in the Spring and early Summer of 2024 is much lower than it was last year at this time.

Cash corn futures have primarily traded in a range of $4.30 to $4.60 per bushel during the first five months of
2024. Cash corn prices in southern Minnesota at local ethanol plants, feed mills, and grain elevators has primarily
ranged from $4.20-$4.50 per bushel in 2024, with some locations across the Midwest temporarily having higher
or lower cash corn prices, depending on the local basis levels. Farmers still remember a year ago in 2023, when
local cash corn prices in the Upper Midwest were above $6.00 per bushel during the first half of 2023, or 2022,
when local cash corn prices in the Midwest traded at $6.50 to $7.50 per bushel during the first half of the year.
This drastic change in local corn marketing opportunities has made it difficult for farmers to complete their corn
marketing on the 2023 corn that is still in storage and unpriced.

Similar to corn, CBOT November soybean futures prices for the 2023 soybean crop were trading above $13.00
per bushel during the early months of the year. By comparison, the cash soybean futures price has remained near
$12.00 per bushel during the first five months of 2024 and local soybean basis levels have widened out compared
the basis levels last year at this time. Cash soybean prices for unpriced soybeans in storage in southern Minnesota
have traded in a range from $11.25 to $11.75 per bushel most of the time during the first few months of 2024,
with slightly higher cash prices at soybean processing plants. A year ago, cash soybean prices in the Midwest
exceeded $14.00 per bushel on many occasions during the first half of 2023.

The much lower cash corn and soybean prices in 2024 in the Spring and early Summer months of 2024, compared
to the last few years, has made it very difficult to market the remaining inventory of the 2023 corn and soybean
crop that is still in storage. Current cash price offerings for both corn and soybeans during the first half of 2024
have been at lowest level early in the year since the first six months in 2020. Many grain producers had 2023
breakeven levels to cover cash expenses, land costs, and overhead costs of near $5.00 per bushel for corn and
over $11.00 per bushel for soybeans, depending on their final crop yields. There have been very few opportunities
to capture those price levels since the completion of the 2023 harvest season.

For many farmers, the major marketing focus in the past couple of months has turned to trying to “lock-in”
favorable prices on the 2024 corn and soybean crop, which has also been very difficult. The “new crop” CBOT
December corn futures has traded in a fairly tight range of $4.60 to $4.80 per bushel most of the time since January
of 2024, only briefly reaching $4.90 per bushel on a few occasions. Local ethanol plants and grain elevators in
Southern Minnesota have typically been offering forward contract corn prices for harvest delivery of the 2024
crop in the $4.25-$4.50 per bushel range during the past few months, which is about $1.00 per bushel lower than
“new crop” cash corn bids a year ago at this time in 2023, and $2.00 per bushel below harvest price bids in the
Spring months of 2022. Basis levels for “new crop” corn have generally been $.30-$.40 per bushel below the
CBOT December corn futures price at most locations in the Upper Midwest, with some variation depending on
location. This is a much wider basis level than existed in the previous couple of years in early June.

Like corn, the 2024 “new crop” CBOT November soybean futures price has traded much lower during the first
few months of 2024, compared to futures prices during similar months in recent years. The November soybean
futures price has generally traded between $11.50 and $12.00 per bushel in the first five months of 2024. By
comparison, the harvest futures price in the first few months of 2023 was trading above $13.00 per bushel, and
was above $14.00 per bushel in 2022.

The basis level for 2024 “new crop” soybeans in the Upper Midwest generally been $.70-$.80 per bushel below
the CBOT November futures price in recent weeks, and $.40-$.50 per bushel below at soybean processing plants.
This 2024 soybean basis levels are significantly wider than typical pre-harvest basis levels that were offered in
the three previous years. Local “new crop” cash prices in the Upper Midwest for the 2024 soybean crop have
generally been in the $11.00 to $11.50 per bushel range, with prices exceeding or dropping below that level a few
times, depending on location and local basis levels. Price offerings at processing plants have been slightly higher.

Looking ahead to grain marketing opportunities in the Summer months of 2024
Prior to the 2024 planting season in March and early April this year, there was considerable concern about the
potential for drought during the 2024 growing season in the Upper Midwest. However, above normal precipitation
in the past two months has basically eliminated drought concerns in the primary corn and soybean production
areas in the country. USDA released the first crop ratings for the 2024 corn crop on June 3, which showed 75
percent of the U.S. corn crop rated “good to excellent”. This compares to a “good to excellent” rating of 69 percent
a year ago in early June and a 5-year average of 70 percent. The only recent year to exceed the initial 2024 corn
rating was at 76 percent in 2021. Nearly all major corn producing States in the Upper Midwest had an initial 2024
corn crop rating between 70 to 80 percent in the “good-to-excellent” category.

In the past few decades, when the initial crop rating has exceeded the previous average, the resulting U.S. corn
yield has reached a record yield level about 50 percent of the time. The current record U.S. corn yield is 177.3
bushels per acre, which was set last year, even though there were very dry conditions in portions of the Upper
Midwest in 2023. USDA is currently projecting a trendline corn yield of 181 bushels per acre in 2024 and most
grain marketing analysts are estimating the national 2024 U.S. corn yield between 178 and 180 bushels per acre.
In any case, unless drought or some other weather issue develops later this year, there will likely be a very solid
U.S. corn yield in 2024, which will likely keep U.S. corn ending stocks at fairly high levels and put downward
pressure on “new crop” corn prices.

The initial 2024 soybean crop rating will be released in the June 10th weekly USDA crop progress report. Most
analysts also expect the initial soybean crop rating for this year to exceed the 5-year average rating, with fairly
solid ratings in most of the major soybean producing States. The USDA crop progress report on June 3 listed
soybean planting in the U.S. at 78 percent completed, which was five percent ahead of the 5-year average. The
soybean planting progress has been a bit slower in some portions of the Upper Midwest due to excess rainfall
during late May and early June. About the only thing that could be a positive for the “new crop” soybean prices
would be if the final soybean planted acres are below the expectations of USDA and grain marketing analysts, or
if negative weather conditions develop later this Summer.

Making grain marketing decisions for 2023 grain that is still in storage, as well as for this year’s corn and soybean
crop, has been very challenging during the first few months of 2024. Most farmers probably have a 2024
“breakeven” market price of over $5.00 per bushel for corn and over $11.00 per bushel for soybeans to cover crop
input expenses, land costs, and overhead expenses at average crop yields. There have not been very many
opportunities to “lock-in” local cash prices at or above those levels in recent months. Unless drought conditions
or other crop production problems develop later in the 2024 growing season, it is not likely that there will be a
major rally in corn and soybean prices later this Summer. In the absence of weather issues, corn and soybean
prices in 2024 are likely to follow a more typical seasonal price pattern as we progress toward harvest.
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Note — For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions
Phone — (507) 381-7960; E-mail — kentthiesse@gmail.com