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Stock markets are trading lower this morning while energy markets are up modestly. The attitude toward crops appears generally favorable ahead of the open.
- Interest rate direction is in the wind.
- New-crop prices traded up overnight but corn and beans dropped closer to the open.
- All is not well deep in fields.
Prices updated as of 6:55 a.m. CDT.
What we’re watching
In the minutes released yesterday from the late-January Federal Reserve meeting, interest rates remained unchanged but the policymakers were split regarding future cuts or hikes, depending on inflation. The divergence in opinion highlights the headwinds that will be faced by Kevin Warsh, President Trump’s choice to take over from Fed Chair Jerome Powell in May, as he seeks further cuts. Tomorrow morning will deliver the most imminent update on inflation.
Acreage on center stage
As mentioned in “A day with ups and downs but all’s well that ends well” yesterday afternoon, analyst expectations for 2026 are for 94.9 million acres for corn and 84.9 million for soybeans. The seesaw pattern continues the pattern seen since 2020, points out the National Corn Growers Association. While many see corn offering better profit potential than soybeans, NCGA forecasts it will cost $917 to plant an acre of corn this year – only 1% below 2022’s record $928. USDA’s February supply/demand estimates placed the average 2025-crop price at $4.10/bu. That is 37% lower than 2002 and, if carried on to 2026, could spell a loss of 88 cents/bu.
However, December corn futures, having rebounded back to the $4.60 area – close to breakeven - and with sentiment more optimistic for corn than beans, the reduction in corn acreage could possibly be less than expected, says Frayne Olson, ag economist at Kansas State University. “We don’t need as many as last year, but it’s not like we need a huge drop.”
Yields in the wings
While the country has received precipitation and more is expected, the Palmer Drought Index shows substantial areas in drought status, including important parts of the Midwest. If not soon alleviated, markets will begin to shift their interest to yields.
New-crop corn prices have almost retraced their collapse
After a positive trade overnight, corn turned lower half an hour ahead of the open, dropping by a half cent across the board. But a look at the December contract shows it has been climbing out of the ravine dug by the January supply/demand estimates ahead of USDA’s first reveal of its desk-based estimates for 2026.
New-crop soybeans up more than 60 cents from their early January low
The soybean slate was all green with November beans trading at $11.17 and March at 11.35 ahead of the open before turning red by a penny. Meal also is in the red by about 10%, while soybean oil was up across the board with gains of about half a percent.
Kansas State University economist Dan O’Brien notes, "The soybean market is more of a political football than the corn market right now." Prospects for future U.S. soy exports are uncertain ahead of the planned meeting between U.S. President Donald Trump and China's President Xi Jinping scheduled for April. At the same time, of course, Brazil is ready to ship its record harvest. This adds to the perception that corn price outlook is firmer than that for soybeans.
September wheat heads higher
Ahead of the ag outlook forum, the wheat complex is in the green across the board, with Chicago up 8 cents, Kansas City up 8 cents and Minneapolis up a half cent. As the chart shows, September Chicago wheat’s 20-day moving averages rising.
As a reminder, analysts expect 44.7 million acres of all wheat, and production of 1.872 billion bushels - both below last year.
