Chicago, IL – September 29, 2025 – The agricultural commodity markets are experiencing a significant downturn, with both corn and soybean prices firmly entrenched in the red, signaling a challenging period for producers and prompting a re-evaluation of strategies across the supply chain. The immediate implications point to squeezed profit margins for farmers, potential shifts in global trade dynamics, and increased volatility in futures markets.

This persistent decline marks a notable departure from the elevated prices witnessed in recent years, pushing agricultural producers into a high-yield, low-margin environment. As harvest activities intensify across the United States, the confluence of abundant global supplies, shifting demand patterns, and macroeconomic headwinds is creating a complex and often unprofitable landscape for these crucial crops.

A Perfect Storm: Unpacking the Decline in Grain Prices

The current depreciation in corn and soybean prices is the result of a multifaceted interplay of global supply and demand dynamics, underpinned by significant macroeconomic factors. Specific details reveal a market awash in supply, facing tempered demand, and navigating a strengthening U.S. dollar.

The most prominent factor is the sheer volume of global production. The 2023 corn harvest was a record-breaker, contributing to the re-emergence of substantial corn surpluses, while the U.S. saw healthy corn and soybean crops in 2024. Crucially, South America, particularly Brazil and Argentina, has delivered large or even record corn and soybean crops for the 2024-2025 season, benefiting from favorable weather. Brazil's 2025 soybean production alone is expected to dwarf the U.S. harvest, contributing to projected record global soybean stocks. This accumulation of supply has led to increased ending stocks, with U.S. ending soybean stocks rising significantly.

On the demand side, a stronger U.S. dollar, which has surged 8% since late September 2024, makes dollar-denominated commodities more expensive for international buyers, thereby dampening export appetite. China, a critical importer, has also shifted its purchasing strategy, with its corn imports for November 2024 dropping over 90% year-on-year and a growing preference for South American soybeans due to ongoing trade tensions with the United States. This reduced Chinese demand has been a major blow to U.S. export prospects.

The timeline leading to this moment reveals a return to lower price plateaus after a transitory period of elevated prices. From 2021 to 2023, corn and soybean prices were high, influenced by factors like the Russia-Ukraine war and inconsistent yields. However, by early 2024, Brazil's large soybean harvest began to impact U.S. demand. Throughout 2024, favorable weather in South America and strong U.S. crop prospects built up supply. By September 29, 2025, corn prices had fallen to 421.65 US cents per bushel, and soybeans to 1,009.27 USd/Bu, reflecting a consistent downward trend.

Key players in this volatile market include the farmers themselves, who bear the direct brunt of price fluctuations. Major agricultural commodity trading and processing companies like Cargill (private), Archer Daniels Midland (NYSE: ADM), Bunge Limited (NYSE: BG), and Louis Dreyfus Company (private) are navigating disrupted supply chains and seeking arbitrage opportunities. Government agencies, such as the U.S. Department of Agriculture (USDA) and Brazil's National Supply Company (CONAB), play a pivotal role through their influential reports and policy decisions. Speculators and traders, encouraged by high interest rates, have taken significant "short" positions, further contributing to bearish sentiment.

Initial market reactions have been stark, with corn and soybean prices collapsing to levels not frequently observed since 2007 for corn and 2018-2019 for soybeans. This has led to widespread unprofitability, with prices falling below estimated production costs. Farmers face significantly lower farm incomes, dashing hopes that the higher prices of 2022 had established a new, elevated price floor.

Winners and Losers: Corporate Fortunes in a Down Market

The decline in corn and soybean prices creates a clear dichotomy in the financial landscape, producing distinct winners and losers among public companies. Those relying on these commodities as inputs stand to benefit, while producers and their direct suppliers face considerable headwinds.

Companies Most Likely to Lose:

• Agricultural Equipment Manufacturers: Companies like Deere & Company (NYSE: DE) and AGCO (NASDAQ: AGCO) are directly impacted as farmers, facing reduced incomes, cut back on capital expenditures. Lower demand for new tractors and combines translates into reduced sales volumes and profit forecasts for these manufacturers. Deere, for instance, has already announced layoffs and anticipates profits below market expectations.
• Agricultural Input Providers: Firms such as Corteva Agriscience (NYSE: CTVA) and Nutrien Ltd. (NYSE: NTR), which supply seeds, fertilizers, and chemicals, will likely experience reduced sales or slower growth. Farmers, struggling with tight margins, tend to optimize or cut back on expensive inputs, directly affecting the revenue streams of these suppliers.
• Ethanol Producers: While lower corn prices might seem beneficial, the profitability of ethanol producers is also tied to crude oil prices and biofuel mandates. If oil prices are also low, the cost advantage from cheaper corn can be negated. Disappointing mandates for plant-based renewable fuels have also contributed to weakness, leading to potential margin compression for these companies.
• U.S. Grain Exporters: Companies heavily involved in exporting U.S. corn and soybeans will suffer from reduced demand, particularly from China, which has increasingly sourced from South America. This shift, exacerbated by trade tensions, directly impacts export volumes and revenue for these firms.

Companies Most Likely to Win:

• Livestock Producers: Meat, poultry, dairy, and hog producers, including companies like Tyson Foods (NYSE: TSN) and Pilgrim's Pride (NASDAQ: PPC), are significant beneficiaries. Corn and soybean meal are major components of animal feed. Declining prices for these commodities directly reduce feed costs, which can constitute 40-45% of their cost of goods sold, leading to improved profit margins and increased profitability.
• Food Processing and Consumer Goods Companies: Many food products, beverages, and even some consumer goods utilize corn, soybeans, or their derivatives (e.g., high-fructose corn syrup, soybean oil). Companies like General Mills (NYSE: GIS), Post Holdings (NASDAQ: POST), Coca-Cola (NYSE: KO), and PepsiCo (NYSE: PEP) will see a reduction in their raw material costs, directly boosting gross profit margins and potentially leading to higher net income.
• Global Agricultural Trading Houses: Diversified firms like Archer Daniels Midland (NYSE: ADM) are well-positioned to leverage falling prices. Their extensive global logistics networks allow them to pivot sourcing to the lowest-cost producers (e.g., buying from Brazil or Argentina when U.S. prices are uncompetitive), benefiting from arbitrage opportunities and maintaining margins even in a generally declining price environment.

Wider Implications: A Shifting Agricultural Landscape

The current downturn in corn and soybean prices is not an isolated event but rather a significant component of broader industry trends, signaling a challenging recalibration for global agriculture and commodity markets. This situation is amplifying existing pressures and prompting a re-evaluation of long-term strategies.

This decline fits into a wider trend of decreasing agricultural commodity prices, with forecasts predicting a continued drop in net farm income through 2024 and 2025. The market is firmly in an "era of abundance," driven by robust global production of key grains. The U.S. has seen record corn harvests, and South American powerhouses like Brazil and Argentina have delivered large soybean crops, leading to swelling global ending stocks. Concurrently, demand-side shifts, such as China's reduced appetite for U.S. corn and preference for Brazilian soybeans, coupled with a strong U.S. dollar, further complicate the export landscape.

The ripple effects are profound. Farmers face an "economic crisis," grappling with unprofitable production as high input costs (seeds, fertilizers, fuel, rent) persist while commodity prices fall. This financial strain forces difficult decisions regarding future planting and investment. While U.S. farmers struggle, competing nations like Brazil also feel the pinch, though Brazil has gained market share in soybean exports to China. Importing countries like Mexico and Canada are becoming increasingly vital partners for U.S. corn, diverting purchases from other sources. The biofuels industry, a crucial demand component, is influenced by fluctuating energy prices and a "flawed biofuels policy" that sees imported used cooking oil displacing soybean oil demand.

Regulatory and policy implications are also significant. The delayed reauthorization of the Farm Bill in 2024 means existing risk mitigation programs may not adequately address current market conditions. Historically, government policies have focused on providing risk management, but payments for lower prices are often delayed. Trade policies, particularly the U.S.-China disputes and retaliatory tariffs, have dramatically reshaped global trade flows, pushing China away from U.S. soybeans. Biofuels policy also plays a critical role, influencing planting decisions and overall demand.

Historically, such price downturns are not unprecedented. Over the past century, inflation-adjusted prices for major crops have generally declined due to increased productivity, a trend temporarily reversed but now expected to resume. The 2014 downturn, following the 2012 drought, saw corn and soybean prices fall sharply due to record production and increased ending stocks, a situation strikingly similar to the present. These historical precedents suggest that low prices typically lead to market adjustments, either by stimulating demand or discouraging future planting, as producers respond to economic signals.

What Comes Next: Navigating a Challenging Horizon

The outlook for corn and soybean prices in the coming months and years points towards a challenging environment marked by continued oversupply and intense competition. This necessitates strategic pivots and adaptations across the agricultural sector to navigate emerging opportunities and mitigate significant challenges.

In the short-term (2024-2025), corn prices are projected by the USDA to be around $4.10 per bushel for 2024 and $3.90 for 2025, with futures markets showing slightly higher figures. Record U.S. corn harvests are anticipated, leading to substantial ending stocks. For soybeans, USDA projects prices at $10.80 per bushel for 2024 and $10.00 for 2025, with futures around $9.90 for 2024. While domestic crush for soybeans is expected to increase due to biofuel demand, weak export demand from China remains a significant bearish factor.

Long-term, both corn and soybean prices are expected to remain below their 2021-2023 peaks. Corn may stabilize around $4.25-$4.55 per bushel, reminiscent of the 2015-2019 period, while soybeans could potentially fall into single-digit territory, with estimates around $9.99/bushel by year-end and $9.58/bushel in 12 months. Climate change poses a severe long-term threat, with projections of significant yield reductions for both crops by 2050 without adequate adaptation.

Strategic pivots for agricultural producers are crucial. Enhanced risk management, including thoughtful use of financial resources and hedging strategies, is paramount. Cost management and operational efficiency will be critical, potentially involving optimizing fertilizer rates. Diversification into specialized, value-added crops (e.g., non-GMO, high-oleic soybeans) or new uses for corn and soy in industries like textiles, tires, and bioplastics offers opportunities for decommoditization. Climate change adaptation, through resilient crop varieties and rotations, is also essential.

Market opportunities include sustained biofuel demand, especially for soybean oil in renewable diesel and corn in ethanol. The trend towards decommoditization offers higher value for specific crop attributes. Innovations are creating new industrial and food uses, expanding demand beyond traditional feed. Conversely, challenges are formidable: global supply surpluses, weakened Chinese demand, persistently high input costs, and the looming impact of climate change on yields. Logistical bottlenecks and a strong U.S. dollar further complicate export competitiveness.

Potential scenarios for the commodity market include:

1. "New Normal" of Lower Prices (Most Likely): Corn and soybean prices stabilize at lower plateaus for several years due to consistent large global harvests and sustained competition. Farmers face continued margin compression, emphasizing efficiency and risk management.
2. Climate-Driven Volatility: Extreme weather events lead to sharp, unpredictable price swings, even if overall trends remain lower. This necessitates heavy investment in climate-resilient farming.
3. Demand-Led Recovery (Less Likely Short-Term): A significant and sustained surge in demand from accelerated biofuel mandates, new export markets, or industrial uses pushes prices higher.
4. Deepened Agricultural Slump: Prices fall further, leading to widespread financial distress for producers, potential land price retraction, and industry consolidation.

Comprehensive Wrap-Up: Navigating the Red Zone

The recent decline in corn and soybean prices represents a decisive shift in the agricultural commodities market, moving from a period of exceptional highs to a more challenging, lower-price environment. The key takeaways underscore a market grappling with abundant global supplies, particularly from the U.S. and South America, coupled with a notable softening in demand, especially from China. This has effectively reset price expectations, pushing the market back towards historical averages after a transitory period of elevated values.

Moving forward, the market is poised for continued pressure on prices, with both corn and soybeans expected to remain in the red for the foreseeable future. While corn may see robust domestic demand from ethanol production, its export share faces competition. Soybeans, despite increasing domestic crush for biofuels, are particularly vulnerable to a subdued export landscape, heavily influenced by Chinese purchasing decisions. The significance of this period cannot be overstated; it marks a critical juncture for agricultural producers who must navigate a landscape of high input costs and diminished revenues, potentially exposing fragilities in current agricultural policy frameworks.

For investors, vigilance is paramount in the coming months. Several critical factors warrant close monitoring:

• Weather Patterns: Adverse weather events in key growing regions globally can swiftly alter supply forecasts and trigger price volatility.
• USDA Reports: Monthly WASDE reports and quarterly grain stocks updates provide crucial insights into supply-demand balances.
• Geopolitical Events and Trade Policies: Shifts in global trade relationships, tariffs, and export regulations, particularly involving China, can dramatically impact market dynamics.
• South American Production: The progress of crops in Brazil and Argentina will continue to heavily influence global supply.
• Crude Oil Prices and Biofuel Demand: Fluctuations in energy markets directly affect the demand for corn in ethanol and soybean oil in renewable diesel.
• U.S. Dollar Strength: A stronger dollar makes U.S. commodities less competitive internationally.
• Global Economic Conditions: The health of major importing economies directly impacts demand.
• Speculative Fund Positioning: Large speculative positions can introduce short-term volatility.

By carefully observing these interconnected variables, investors can better understand and adapt to the evolving landscape of the corn and soybean markets, which are likely to remain in a challenging "red zone" for some time.

This content is intended for informational purposes only and is not financial advice.