Americas corn and soybean prices hit multi-year lows amid favorable crop prospects

Platts US SOYBEX FOB New Orleans price hit $382.87/mt on Aug. 16, which was the lowest price since August 2020. US Gulf Coast cargo export prices have fallen nearly $100/st in a steady decline since May 2024 amid favorable growing conditions and a slower export pace keeping downward pressure on prices.

In addition, US farmers have been selling high volumes of old crop inventories.

The Chicago Board of Trade November soybean futures contract was trading over $12/bushel in May, but settled at a contract low of $9.55/bu on Aug. 16.

Soybean futures were already under heavy pressure from the expectations of bumper crops for the South America 2023-24 crop season. Despite weather setbacks, Brazil harvested its second largest soybean crop in history, above 150 million mt, while Argentina recovered from a drought in the previous season, harvesting 49 million mt of soybeans, according to the US Department of Agriculture.

There were further increases to global crop prospects after the USDA published its World Agricultural Supply and Demand Estimates report on Aug. 12 and drove prices below $10/bu amid projections of record yields and ending stocks 62% higher in the US for the 2024-25 crop season.

Stronger Chinese purchasing of Brazilian soybeans has led to a slower pace of US new crop sales commitments. Without an increase in US export sales, US ending stocks could rise over 600 million bushels, which would be the highest level since the 2018-19 trade war.

US soybean export sales for the 2024-25 marketing year reached 5.865 million mt through Aug. 8 with 1.098 million mt committed to China, according to USDA data published on Aug. 15. Total new crop sales commitments were 9.186 million mt during the same week in 2023.

Exports to China

Brazil's soybean exports to China over January-July rose to an all-time high of 55.2 million mt, according to the country's foreign trade ministry, or Secex, report released Aug. 6.

According to Secex data, Brazil exported 75.4 million mt of soybeans between January and July this year, up 4.1% on the year, with China increasing its share of the shipments from 69.5% in 2023 to 73.3% in 2024, the data showed.

China has ramped up purchases of Brazilian soybeans in the first half of the year, as the decline of the Brazilian real versus the US dollar mitigated the decrease in prices for Brazil's soybean exporters, allowing them to retain a competitive advantage over their American counterparts.

Imported soybean inventories at China's ports reached very high levels at the end of July, fueled by concerns of a new trade war with China, depending on the outcome of the US elections.

Corn

Platts US corn FOB Gulf Coast Panamax prices for two calendar months forward were assessed at $179.72/mt on Aug. 16, the lowest price since September 2020. US corn values have seen a steady decline on favorable weather and a strong production outlook that have offset record ethanol production rates and improved export commitments.

USDA August WASDE data projected corn yield at a record 183.1 bu/acre, up from the 181 bu/acre July target and the 177.3 bu/acre estimate from the previous year. US export sales commitments for the 2024-25 marketing year reached 6.633 million mt through the week ended Aug. 8, up from the 5.974 million mt committed during the same week in 2023.

In Brazil, corn FOB prices reached their lowest level since September 2020 at $194.67/mt on Aug. 16, according to S&P Global Commodity Insights data.

China's sluggish demand for Brazilian and US corn is putting pressure on global corn prices.

Brazil exported more than 16 million mt of corn to China in 2023, but from January to July exports totaled only 1.6 million mt, according to the Brazilian Foreign Trade Secretariat, or SECEX.

Brazilian corn exports from January through August were estimated at 17.3 million mt, 30% less than the 24.7 million mt exported in the year-ago period, according to Brazil's National Cereal Exporters Association, or ANEC.

However, corn demand for ethanol is helping to support prices. Brazil's corn use for ethanol was estimated at 18.3 million mt, up 19% from a year ago, amid profitable margins.