Corn prices in Chicago slid to a four-year low on Monday following a bearish crop yield outlook that forecasted record highs for the US by the end of the harvest season. While this is favorable news for consumers, it spells continued disaster for farmers, whose incomes are expected to plummet this year due to declining agricultural prices and rising expenses.
The Pro Farmer Crop Tour projected a record corn yield of 181 bushels on average per acre nationwide. If this forecast comes to fruition, then this would be a record high. The forecast also sees production of around 15 million bushels, similar to the USDA’s estimates.
Adam Davis, chief investment officer at Farrer Capital, told Bloomberg that corn prices could be nearing a bottom, with most negative factors already priced in. He noted, “It’s likely that US farmers might hold onto supplies to push up prices, adding, “Pro Farmer just confirmed what we already knew.”
Late last week, Brian Grete, leader of the eastern leg of the Pro Farmer Crop Tour, which completed the four-day crop survey, told Bloomberg, “There are big yields out there, both corn and beans.”
Pro Farmer Tour 2024, south central Nebraska sweet corn edition. @PVseed planted May 22. Pivot irrigated. #Pftour24 pic.twitter.com/vdMEV2GfiR
— Laura Farms (@laurafarms_) August 20, 2024
“Ironically, many American farmers aren’t celebrating the bumper crops. Mega-harvests are creating a host of challenges, as the ample inventories pushed soybean and corn futures to the lowest since 2020 last week,” Bloomberg added.
Corn futures on the Chicago Board of Trade slid under $4 a bushel in recent weeks, nearing early 2020 lows. Prices have been halved since peaking around $8 in April 2022. Money managers have increased bearish bets on the grain to the most in three weeks.
Other grains, such as soybeans and wheat, have been pressured lower with corn over bumper harvest outlooks.
Meanwhile, USDA warned earlier this year that projected farm incomes were expected to crash 26% this year, the largest drop since 2006.
With small farms in total collapse, Robert F. Kennedy Jr. announced last week that his support for former President Trump would include making America’s small farms great again.
Tyler Durden
Mon, 08/26/2024 – 18:50
