Worries about a smaller US harvest sent corn prices 20% higher last quarter, the farm lender CoBank says in its latest outlook. Tighter US supplies, a much smaller European crop and fewer shipments from Ukraine make further swings in corn prices more likely.
Soybeans are also firm. The US soybean crush keeps setting records, which has strengthened basis prices across the country; China is buying US soybeans steadily again, and total export commitments to all buyers are more than double last year's pace. US wheat prices are among the highest in the world as the market rations scarce supplies, with buyers shifting away from Ukraine and Russia as their shipments fall.
But for farmers the higher prices for corn and soybeans have not kept up with costs. Diesel is nearly 80% more expensive than a year ago, an expense that will bite harder during harvest. Fertiliser spending on US farms is projected at a record $40 billion in 2026, 15% more than last year, and high prices for agronomy services and fertiliser are expected this autumn. CoBank says supply itself is not a worry: retailers and farm supply cooperatives have built stocks cautiously but should have enough.
Biofuel policy is adding demand. The Environmental Protection Agency's higher renewable volume obligation for biomass-based diesel is lifting demand for US soybean oil, and even after 17 straight months of record domestic crushing, imports are still needed to meet it. Uncertainty over 2025 small refinery exemptions eased after the EPA said it would exempt 1.76 billion renewable identification numbers across 29 small refineries.
Ethanol margins have also improved on the value of the 45Z tax credit. CoBank expects output to rise as plants chase the credit, which means more ethanol will need to be exported.
Photo: Bill Whittaker / Wikimedia Commons (CC BY-SA 3.0)
Source: The Cattle Site
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