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U OF ILLINOIS ECONOMISTS ISSUE REPORT "2022 MARKET OUTLOOK FOR CORN AND SOYBEANS"
Jan. 25, 2022
Blog by Scott Irwin and Joe Janzen, Department of Agricultural and Consumer Economics, University of Illinois
Corn and soybean prices have shown remarkable resilience in 2021. During the 2020-21 marketing year, nearby futures prices peaked in May 2021 at over $7.50 per bushel for corn and $16 per bushel for soybeans.
This rally was caused by a surge in US exports coupled with production shortfalls in major growing regions outside the US. Since that time, prices for both crops have remained at historically high levels. As the calendar year draws to a close, the nearby futures price for corn remains near $6 per bushel and for soybeans near $13.
The profitability of corn and soybean production in 2022 will depend on continued strength in output prices. Rising input costs, particularly for fertilizer, are squeezing projected margins. We consider two important drivers of corn and soybean prices in 2022.
In the first article based on our IFES webinar, we discuss the state of 2021-22 marketing year US corn and soybean exports. In this second article, we discuss the prospects for US crop acreage and production in 2022, another key driver of expectations for 2022 corn and soybean prices.
The starting point for considering corn and soybean planted acreage for 2022 is the total size of planted acreage. Figure 1 below shows that there is more variation from year- to-year in the size of the "acreage pie" than is commonly appreciated. Note that the bars in the chart represent intended total planted crop acreage in the U.S. each year from 2006-2021.
This is the sum of total principal crop acreage, as defined by the USDA, and prevented plant acreage. Since prevented plant acres were intended to be planted, for our purposes here we want to sum what was planted (principal crop acres) with what did not end up getting planted (prevented plant acres) to get intended total crop acreage.
To view the complete report, click here.
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