Chicago corn and soybeans sink to effective 19-year lows

Chicago corn futures hit contract lows yet again this week and soybeans have been flirting with single-digit prices as ample U.S. harvests are on the docket.

December corn still hovers just above last year’s levels and November soybeans are at five-year lows for the date. But adjusting for inflation puts month-to-date averages for both corn and soybeans at the lowest July levels since 2006.

This grim milestone comes as U.S. exporters struggle to defend their once-impenetrable global grain and oilseed market share against ever-expanding Brazilian production.

Sagging prices are especially painful for U.S. farmers since input costs remain relatively high. Corn prices have tumbled at least 30% since mid-2022, both in nominal and adjusted terms.

But the national average cost to produce corn this year is only 3% lower than in 2022, and 11% lower if inflation is considered.

This means that $4-per-bushel corn is not the same as the years-ago $4 corn, even though current U.S. supply predictions are historically modest.

So far this month, CBOT December corn and November soybeans have averaged $4.21 and $10.20 per bushel, respectively. That compares with full-month 2024 averages of $4.12 and $10.67.

U.S. data on Tuesday showed the June Consumer Price Index up 2.7% on the year, lifting the average July 2024 corn price to $4.23 in real terms, just above the current levels and matching July 2020’s adjusted price.

In nominal dollars, there have been 11 Julys since and inclusive of 2006 in which average corn prices were lower than the current ones. But inflation-adjusted, today’s $4.21 is the lowest since $4.19 per bushel in 2006 ($2.65 nominal).

There have been nine Julys since 2006 in which nominal soybean prices were lower than this month’s running average of $10.20. Once again, after adjustment, this is the lowest since 2006 ($9.74 per bushel; $6.15 nominal).

Both corn and soybeans have enjoyed a bounce so far this week. But prices are well off yearly highs set back in February, when insurance guarantees to U.S. farmers are set for the upcoming harvest.

However, price weakness since then has not been out of the ordinary, a potentially unfriendly factor for hopeful bulls. December corn so far this month is trading 10% lower than the average February price, a smaller loss than in the previous two years.

November soybeans are about 3% lower than in February, though larger declines were observed over this period in four of the last seven years, including 2024.

The U.S. Department of Agriculture predicts 2025-26 U.S. corn ending stocks to rise 24% on the year. This follows a projected 24% decline throughout 2024-25, which ends on August 31.

A year ago, a 12% increase was projected for 2024-25, similar to the comparable 2020-21 forecast for an 18% rise. Recall that adjusted corn prices in July 2020 and 2024 were nearly identical with the current ones, at least partly validating the current supply-price dynamic.

The argument is weaker when comparing the volumes. Predicted 2025-26 corn carryout of 1.66 billion bushels is 21% and 37%, respectively, below the 2024-25 and 2020-21 outlooks at this same point.

But the market may very well be trading a 2025-26 carryout closer to 2 billion bushels given the huge upside considerations for corn yield, aiding the case for low prices.

2025-26 U.S. soybean ending stocks are pegged to fall 11% on the year, the first year-on-year supply decline projected in July since 2020 (-32%). A 24% reduction was predicted in July 2019, though the adjusted average soybean prices during those two Julys exceed $11 per bushel.

The July predictions for 2019-20 and 2020-21 U.S. soy carryout, 795 million and 425 million bushels, respectively, safely exceed the 2025-26 estimate of 310 million. This could be a supportive factor for bean prices, particularly if August weather forecasts turn unfavorable.