While there is still plenty of growing season left in front of the U.S. corn and soybean crops, some would say the most critical from a weather stance, market attention is starting to shift to the upcoming harvest. In just a matter of weeks we will start to see the first of the U.S. harvest take place. While new crop production is one of the greatest unknowns in the market right now, what we will see done with remaining old crop bushels is just as much of a factor.

The latest quarterly stocks report showed June 1st inventories of 4.99 billion bu of corn and 970 million bu more soybeans in storage. These are increases of 22 percent from June 1, 2023. The most interest is on on-farm inventory with corn up 37 percent on the year and soybean stocks 44 percent greater than a year ago. Trade feels that this inventory will need to move prior to the start of harvest and is unwilling to pay up for deliveries in today’s market. Even if buyers do need to push bids, they are only posting limited incentives until movement does take place. This has generated just as much volatility in the cash market recently as it has in the futures. 

While we will likely see an increase in country movement of farm stored inventory in the near future, there are indications that not as many old crop bushels may move prior to harvest as trade expects. Some producers across the Corn Belt claim they are willing to sell new crop out of the field and hold their remaining old crop bushels to market next year. While this may not take place on a substantial volume of old crop stocks, it may be enough to start firming old crop bids.

Even with market attention starting to shift to new crop harvest, weather remains a very important factor in daily price discovery. In several years the United States has seen its crops look good all season only to be devastated by late growing season heat. At the same time, favorable weather in August and September has proven beneficial for production. This is not just on yields, but for crop quality as well.

An interesting story is developing in the Argentine beef industry. Domestic beef consumption in Argentina has fallen to 98.56 pounds per person in 2024, the lowest volume since 2019. The average annual beef consumption in Argentina is 160.6 pounds per person.

Hyper-inflation and rising poverty in Argentina are the primary factors behind this drop in beef demand. The country has seen a slight increase in consumption of cheaper proteins like pork and poultry, but total consumer demand in Argentina is expected to decline 9 percent this year to the lowest volume since 2011.

The question in the global market now is if we will see an increase in Argentine beef exports to limit demand for higher-priced U.S. offers.

Soybean sales have surged in Brazil in recent weeks. Farmer sales of the 2023/24 crop are at 72 percent of production compared to 66 percent sold a year ago. Soybean sales for the 2024/25 marketing year are at 19.6 percent of projected production compared to 11.1 pecent a year ago. Increased Chinese demand in recent weeks and favorable currency exchange rates due to the strong U.S. dollar have elevated Brazil’s cumulative sales. Brazil farmers also stepped up their sales ahead of proposed Brazilian tax revisions that would have cut their returns.

This elevated selling has pressured U.S. soybean sales, especially for new crop. Our current soybean sales for the 2024/25 marketing year are the lowest in two decades. This is mainly from an absence of Chinese buying, as we have yet to see any confirmed new crop sales to that importer.

New crop demand is better on corn, but still the lowest we have seen in recent years. Corn demand on a whole is good right now, but the fact the U.S. has a huge amount of old crop yet to market is keeping pressure on the complex. This is not just in the United States, but around the world. Importers are showing no urgency in covering corn needs ahead of time as a result.

While the upcoming harvest is becoming more of a factor in the domestic market, the global market is starting to look toward the next planting season in South America. In just a few weeks Brazil will begin planting its next soybean crop. There has been considerable debate over potential soybean plantings in Brazil following recent attempts to change the country’s export taxes. Initially it was thought Brazilian farmers would scale back on soybean plantings this year, but these have tempered over time.

Some analysts now think Brazil’s next soybean crop could hit 170 million metric tons this coming year with a normal expansion rate and favorable growing conditions. This would be nearly 20 mmt larger than this year’s crop, and further stress the U.S. export market.

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