The ugly part of the corn market lies just ahead

In agriculture, we spend May planting crops and doing our best to get the crops started in a way that leads to the best yield outcomes at harvest. It’s an extremely busy time. With varying degrees of co-operation from the weather, decisions need to be made that sometimes result in cropping plans that are different than the original program.

The grain markets also have a frenzied season each spring as analysts try to monitor producer behavior at the farm level and predict if any shifts in seeded acres or planting dates are likely to cause a change in new crop supplies. This all wraps up at the end of June with the release of the USDA’s final seeded acreage report and the market can finally dial in on a more precise idea of 2025 crop grain supplies.

Back in March a survey was used by the USDA to develop its 2025 crop seeding intentions of American farmers. That survey suggested that this year American farmers would plant 95.3-million acres of corn and 83.5-million acres of soybeans. For 15 of the past 20 years, the March 31 seeding intentions, specifically for corn, were lower than the final planted acres total in the end-of-June report. Statistically, final acreage for corn is typically about 0.5 % higher than the intended acres, but this year there is broad consensus in at least part of the marketplace that the increase in final corn acres this year could be even bigger. Part of the reason that new crop corn futures prices have been so soft this spring is because the market is factoring in a potential corn area of 96- to 97-million acres this year, rather than the 95.3 million that the USDA targeted.

There is also a widely held belief that if corn planting proceeds quickly, then ultimately more acres of corn actually get planted. Statistically, there is not a lot of evidence to suggest that.

The opposite, however, is true. If spring seeding is delayed by a wet, slow spring seeding period, farmers, (especially those in the northern edges of the corn belt), will stop planting corn and shift to crops with shorter growing seasons.

Although there have been some specific areas with weather delays this spring, most of North America has enjoyed good field conditions in 2025 and planting progress has proceeded at a faster than average pace.

One of the big variables to sort out as we tweak the planting intention numbers going into the final seeded acreages is whether or not prices influenced farmers’ decisions and caused them to change their cropping plans between mid-March’s survey and mid-May when the planting equipment was running in the field. Certainly new crop corn, soybean, and wheat values all declined between March and May. With planting now essentially wrapped up, this is still very much an open question. There’s no debating the concept that farmers will adjust their cropping plans based on the profit potential of different markets, but with falling prices across the board in the spring of 2025, it’s not easy to point to one particular crop option and expect to see an acreage increase that unfolded as spring planting rolled along.

The 2025 North American corn crop will never be bigger than the estimate reported at the end of June, Projecting a trendline yield based on the total seeded acres is a worthwhile exercise, but it fails to take into account all of the things that the weather can deliver to a crop in the second half of the growing season.

Without question, there will be a least a portion of the corn crop that will be grown on acres that were too dry for too long, and other corn acres which experienced an ill-time frost. All of these things will happen somewhere this coming growing season, but to the extent to which they will develop, and the total number of acres which they will impact is yet to determined.

Supply and demand estimates built from June’s report numbers are as big as the crop can possibly get. It is entirely likely that the total number of harvested acres will get shaved back, and that average yields might be lowered as the impact of the summer and fall’s weather becomes measurable, but normally we will be well into harvest before those supply adjustments get made.

Unless a significant drought or heat stress event develop in the U.S. corn belt over the coming weeks, it’s unlikely that we see very much price volatility in corn for the balance of the summer. There will be a certain amount of weather-based price movement which will create opportunities to finish up pricing any old crop that’s still in the bins, but it might be harvest time before the estimates of this year’s crop supply have to reconcile themselves with the reality of what nature actually produced before we see a lasting adjustment in corn values.

Steve Kell is a Simcoe County crop farmer and handles grain merchandizing for Kell Grain, with elevators in Belleville and Gilford.