Balancing act: Rising yields, export challenges, structural changes

Where might US corn, wheat, and soybean markets be headed in the next decade? Rabobank’s 10-year baseline provides insights into potential long-term trends for the major US grains and oilseeds through 2033/34. Examining these trends, we anticipate various challenges and structural changes unfolding in the US and global markets over the next decade.

In the coming years, US corn and soybean exports will grow compared to previous years, while US wheat exports are not projected to increase. With continuing production growth, US exports will be crucial to balancing supply and demand. However, in the long run, export competition from Brazil, Argentina, Ukraine, and Russia is likely to pose a challenge to US grain and oilseed exports.

US planted acres will continue on a downward trend, with combined corn and soybean acres staying below the 180m-acre mark. All three crops will remain below 230m acres, as lower prices and compressed margins discourage acreage expansion.

We expect farmgate prices to ease from the 2021/22 highs due to several factors, including increased production from rising yields. However, soybean prices are likely to trend higher as new soybean crushing capacity comes online, potentially driving all prices higher as crops compete for acres.

Finally we analyze two scenarios that “shock" the baseline model: 1) lower-than-expected US corn exports and 2) reduced corn and soybean yields. These scenarios result in significantly different outcomes for the corn balance sheet.

All the data and results in this paper are derived from Rabobank’s proprietary baseline model to present potential market trends with the most meaningful implications for the sector or industry in the context of certain conditions.