Crop Watch: Low prices, weather headline producers' concerns for 2025 -Braun
Repeats column first published on Monday. The opinions expressed here are those of the author, a market analyst for Reuters.
By Karen Braun
NAPERVILLE, Illinois, Nov 4 (Reuters) -U.S. Crop Watch producers have all but wrapped up their 2024 corn and soybean harvests, which progressed quickly amid persistent dry weather, and overall yields wound up a bit better than average.
However, producers are keeping the recent dry conditions on their radars heading into 2025, especially after grain and oilseed prices hit four-year-lows earlier this year.
Low commodity prices call for big crop yields when it comes to producers’ bottom lines, and favorable weather plays a large role. However, producers have become more confident with their ability to hit the bigger yields, especially in corn, and this could impact the U.S. acreage mix in 2025.
RATINGS NOT RECORD
Crop Watch producers throughout the season rated weekly yield potential on a 1-to-5 scale where 3 is around farm average yield, 4 is solidly above average and 5 is record or close to it. Scores are finalized after harvest.
The U.S. Department of Agriculture projects record domestic corn and soybean yields in 2024. However, average 2024 Crop Watch yields were not the highest ever seen in the project’s seven-year history, and this could suggest a couple of things.
First, the impact of Iowa cannot be overstated. Both Iowa Crop Watch corn fields scored 5s, but the actual yields were notably above previous highs. The only other Crop Watch corn field to score a 4 or better was Indiana, which fell slightly short of its record.
All other corn fields, except drought-hit Ohio, finished with mostly near-average yields. Pending the outcome of North Dakota’s harvest this week, average 2024 Crop Watch corn yield finishes at 3.3, the lowest since the 11-field format began in 2021.
That signals a modestly above-average result that at first sight might clash with USDA’s 183.8 bushel-per-acre forecast. But it supports the idea that national trend yield, despite doubts, may have climbed into the low 180s with a much greater potential should widespread, favorable weather span an entire growing season.
The impact of the I-states this year also shows up in soybeans. The 11-field average Crop Watch soybean yield finishes at 3.64 for 2024. That is above 2023, identical to 2022 but below 2021.
However, the average 2024 Crop Watch soybean yield across Iowa, Illinois and Indiana is higher than in the previous three years.
LOOKING TO 2025
Low prices are at the forefront of the Crop Watch producers’ minds, especially with 2025 production costs expected to be similar to those of 2024. Producers report that some input costs have come down, but fertilizer is still relatively expensive.
At last estimate, U.S. corn and soybean production costs for 2024 were slightly lower than in 2023 but still elevated compared with four-plus years ago, when crop prices were similarly low.
USDA in June projected 2025 corn and soybean production costs up fractionally from 2024, though a fresh forecast is due on Nov. 14.
While profitability potential is low across the board, at least seven of the 11 Crop Watch producers said they are currently favoring corn over soybeans for 2025 due to factors including yield advantage, crop insurance levels and current prices.
CBOT December 2025 corn futures CZ25 on Monday settled at $4.40-3/4 per bushel, and November 2025 soybeans SX25 finished at $10.35-1/4. That compares with averages for the 2024 contracts of $5.14 and $12.77 during October and November of 2023.
Producers in both Kansas and North Dakota said wheat is attractive for 2025, partly due to tight global supplies. Corn and soybeans are not enticing for either, though the North Dakota producer is likely to cut corn acres because of high input costs and interest rates, and that is despite corn looking better on paper than soybeans.
A handful of Crop Watchers mentioned weather and dryness as a top concern heading into 2025. Drought covered 75% of the U.S. Midwest last week, by far the largest portion for late October since Drought Monitor records began in 2000.
Geopolitics were a bit lower on the list of Crop Watchers’ worries, but some of them noted the hope for lower interest rates as a positive. The ability to produce big yields, especially for corn, was producers’ most common source of optimism for next year, and that could pay off if commodity prices stay low.
Karen Braun is a market analyst for Reuters. Views expressed above are her own.
Graphic- Crop Watch Producers 2024 https://tmsnrt.rs/44kerF2
Writing by Karen Braun
Editing by Matthew Lewis
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