During this time of year, March Madness is a term which historically can describe both the NCAA basketball tournament and the ag markets. With the Quarterly Grain Stocks and Prospective Plantings report released annually at the end of March, the Board of Trade usually has its share of “madness” as well. Much like this year’s basketball tournament, the report this year was ultimately pretty tame as pre-report estimates were quite accurate, and the report gave the market what it was largely anticipating.
So, now what? Is the madness over or just beginning?
Here are three takeaways post-report that I am paying attention to now.
Beans are quietly building a story
From a world carryout level, we find ourselves with a record supply of soybeans and a rather small supply of corn. As a result, the soy/corn ratio has heavily favored corn for the majority of the last six months. This encouraged U.S. farmers to plant more corn acres in 2025 than they did in 2024.
But markets are efficient. As the saying goes, low prices cure low prices. For instance, beans have crummy fundamentals on a world level (and poor prices). As a result, USDA is only anticipating 83.5 million acres of soybeans planted in 2025, down 4% from last year.
All of a sudden, with that number, U.S. carryout for 2025 can get fairly tight (especially if we have any sort of trouble achieving a trendline national yield). Beans have been outside of everyone’s focus and mostly for good reason. But any type of weather scare this spring or summer could provide more fireworks over the bean market than we have seen in some time.
Weather matters in a big way
Speaking of weather, many well-respected weather analysts are signaling that 2025 holds a higher risk of drought than normal. Whether it comes to fruition, the market will have a close eye on spring and summer weather this year. As noted above, the bean side of the balance sheet now has enough of an acreage cut to open a path tighter than we’re comfortable with.
On the corn side, old crop carryout is also potentially small enough that new crop yields need to have a strong showing. USDA printing 95.3 million acres of corn rather than 97-plus million means the market is going to have to stay on top of weather forecasts. In my opinion, 95.3 million acres is still small enough that we can’t dismiss weather hiccups (like we maybe could try to do if we were at 97 million acres). Every bushel that comes off national yield makes a fairly tight situation even tighter. This growing season is going to matter a lot for both corn and beans, which leads me into my final point.
Expect volatility
New crop markets started going down in mid-May last year and didn’t really stop until late August. In hindsight, a lot of money could have been made last year by simply closing your eyes and selling. It was seemingly a one-way market.
I don’t think that will be the case this year. With tighter ending stocks than we’ve seen for a couple of years – coupled with heightened risk of drought this summer, and adding in tariff and geo-political risk – I don’t expect any shortage of volatility this growing season. That means up and down and likely farther in each direction than feels reasonable.
Sitting here in early April, here’s what I believe:
- Opportunities will arise this spring and summer to market new crop grain for a higher price than most would anticipate today.
- A large share of people will wait for prices to go even higher and wind up missing the boat – if and when that time comes.
This year more than most, it’s important to have a sharp marketing plan that has flexibility built into it. The ability to capitalize on rallies, while playing defense against washouts, is going to be paramount.
If you need help getting set up to be in that position by organizing your marketing plan, please reach out to me at ksweeney@agmarket.net or call 815-691-2672. To contact any of the AgMarket.Net hedging strategists, contact 844-4AG-MRKT. We’re always happy to help.
There may not have been much March Madness during 2025, but I have a feeling there is plenty coming for us down the line.
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