Higher grain prices are improving the outlook for crop producers, but questions remain about yields, exports, and rising input costs. University of Illinois agricultural economist Gary Schnitkey says these factors are shaping the market as harvest approaches. When it comes to what’s supporting corn and beans, Schnitkey says it’s all about global events and production concerns.
“A couple of the factors that appear to be driving that right now are the continuing or the heating up of the Ukraine-Russia conflict and that’s causing some ports to have some issues. As those ports have issues, we’re seeing commodity prices increase. Also, there’s some belief that yields are lower out there than USDA forecast. Much of that was based on some pro-farmer tours as well as other indications that yields will be down this year. So, that yield decline takes off some corn and soybean supply.”
With prices moving higher, he says farmers may want to take a fresh look at their marketing plans.
“So, we’re looking at higher prices right now. Again, that’s a good thing and I guess I would encourage some pricing of ’26 crop at harvest. I’m not saying it’s not going to go up, but it could also come down. And even looking out further into the 2027 crop, there are some opportunities now to price grain. Over $5 for corn and near $13 for soybeans. It might be a good time to begin pricing 2027 crop.”
One of the key demand factors to watch is whether soybean exports to China improve in the months ahead, and following a meeting between President Trump and Chinese President Xi.
“I would hope that that can increase our exports to China. Obviously, that will be an item that we’re watching right now. We’ve had very few sales to China so far, so any sort of increase there would be good. That meeting will take place and we’ll see what’s up.”
Even with stronger commodity prices, Schnitkey says producers can’t ignore the cost side of the ledger.
“Fertilizer costs are high. We are using ammonia prices in the high sevens in our budgets. Our DAP and potash remains high. Overall, for 2027, we are projecting the record-breaking high non-land costs for both corn and soybeans. We’re not thinking that cash rents come down. Right now, we would be using projections of $5 for corn and $12.50 for soybeans, which would result in profitability, and again that would be for 2027. But, those costs are high.