US Agriculture Prices Under Pressure

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Agriculture prices declined rapidly last week, amid weakened demand and amplified competition from foreign producers.

Wheat

Wheat on Multi-Month Low, Production Raised Higher
  • September wheat futures were mixed last week over ongoing pressure from the winter wheat harvest and good demand for high-quality wheat.
  • September wheat futures closed -3.5% on a weekly basis, hitting a 4-month low.
  • Hot and dry conditions have increased the pace of the US winter wheat harvest which is now 71% complete compared to the average pace of 62% complete.
  • USDA put the crop at 2.008 billion bushels, up 196 million bushels or 11% from last year’s 1.812 billion bushels.
  • July weekly exports averaged 399k mt, up +4.7% from the same period last year.
Corn

Corn Plummeted to a 4-year low, Pressure from Peers Lowers US Prices
  • Corn futures plunged below $4 per bushel in July, reaching a low not seen since October 2020, driven by an improved supply outlook and lackluster demand.
  • Projections of substantial increases in global corn production, particularly from Brazil, have bolstered the supply outlook.
  • Rainfall has aided crop development, with reports indicating that 67% of the U.S. corn crop is rated as good to excellent, leading to the accumulation of record-high corn stocks not seen since 1988.
  • Demand remains tepid, as sluggish export sales and U.S. shipments trail behind Brazilian competition, intensifying downward pressure on prices.
  • July weekly exports averaged 1,064k mt, increasing +126% as compared to the same period last year.
Soybeans

Prices Slope Downward Amid Strengthened Competition
  • Soybean prices have dropped to $10.8 per bushel due to an abundant supply and relatively low demand, lowering prices by -1.8% on a weekly basis.
  • The anticipated large global production for 2024/25 is contributing to the price decline, with Brazil expected to produce an exceptionally large crop that will further increase global supply.
  • Improved weather conditions in the US, with rain alleviating previous dryness, are benefiting crop yields.
  • Strong competition from Brazilian and Argentinian soybeans, along with China’s increased purchases of cheaper Brazilian beans, is influencing the market.
  • July weekly exports averaged 278.9k mt, up +2.6% from the same period last year.