The Battle for Ground in 2021

Based on USDA’s current estimates total corn and soybean planted area would be 179 million acres in 2021, which is the second-highest acreage on record. Source: USDA NASS, Farm Bureau
Based on USDA’s current estimates total corn and soybean planted area would be 179 million acres in 2021, which is the second-highest acreage on record. Source: USDA NASS, Farm Bureau
(Top Producer)

Grain markets are driven by lower supplies and higher demand

By Tyne Morgan and Rhonda Brooks

A few months can make a major difference for the grain markets. After years of stagnant prices, a bullish market is in place.

“This happened so quickly in terms of loss of U.S. crop and world crop loss and the arrival of a big buyer; it's almost unprecedented,” says Dan Basse, president of AgResource Company. “The combination of lower supplies and higher demand is rare.”

Tighter carryover of corn and soybeans for 2020/21, smaller-than-expected South American crop production due to dry conditions caused by La Niña and consistent buying of U.S. grain by China are all supporting grain prices. 

Can China’s Buying Continue?

While both supply and demand are contributing to higher grain prices, Chinese demand is a big piece of the puzzle. Basse says feed demand, specifically for hogs, in China was at record-high amounts in September and October, with another record likely to be confirmed for November.

As China’s pork industry evolves away from backyard hogs, feed rations continue to use more corn and soy meal. This demand, Basse says, should continue to grow. 

“We see a runway for an ag bull market that's maybe 18 to 24 months, and it’s a demand market," he says.

South America Supplies

On the supply side, weather concerns are causing Basse’s firm to reduce their South American production projections.

“Right now, we see support in the corn market at $4.05, and if you give me a problem in Argentina or with the Safrinha crop in Brazil, corn prices could make it up to $4.80 to $5 sometime late winter, early spring,” Basse says.

Considering the prices in Brazil, farmers have a major incentive to push planting dates and get the second-crop corn in the ground this growing season, says Chip Flory, Farm Journal Economist and “AgriTalk” host. 

Acres in in 2021

Early estimates from USDA call for 89 million acres of soybeans in 2021 — an increase of 7% from 2020 — and 90 million acres of corn — a 1% decline from 2020. 

“There's going to be this bidding campaign going across the Midwest to get corn and bean acres,” Basse says.

Some analysts are predicting as many as 92 million soybean acres for 2021.

“We’ve never touched that number before,” says Chad Hart, Iowa State University economist. “I’m not going to go that aggressive. I’m in that 90- to 91-million-acre camp.”


Read More
2021 Outlook: Is the Stage Set for $5 Corn in the New Year?


TP Summit


Latest News

Southern States: Rebuilding for The Next 100 Years

This year marks the cooperative’s 100th year in business. And as Steve Becraft describes, there’s more to celebrate than the centennial milestone.

The Carbon Games: Agricultural Producers Still Looking for the Leaderboard

“What we need to do to move carbon past the starting line is to show farmers the scoreboard and tell them exactly what they need to do to earn their points,” said Mitchell Hora.  

Senators Reintroduce the Next Generation Fuels Act

Emily Skor, Growth Energy CEO, says the fuel industry has only “scratched the surface” of ethanol potential. She feels this act will help unleash ethanol’s capabilities.

Farming The Northern Plains: Wheat Is A Winner, Corn Is A Headache

“The planting priorities are number one,” says Dr. Lee Briese of Central Ag Consulting. Jamestown, ND

The Equity and WebAir Launch Drone Spray Company

Green Creek Drone Company will be led by Tony Weber as general manager and will also be working closely with The Equity’s Agronomy Department providing custom application of fungicides in select areas in 2023.

Helena’s Two New Brands With A Sustainability Focus

The company says these new products balance crop production needs with environmental stewardship to increase yields responsibly and efficiently.