Planning For Volatility: What 2025 Could Hold For Corn And Soybean Prices
The agricultural markets for 2025 are positioned for substantial volatility, driven by a complex interplay of global and domestic factors. For American corn and soybean producers, navigating this uncertainty requires a deep understanding of the key market drivers that will shape profitability.
These drivers include persistent global supply pressures from South America, evolving U.S. acreage decisions based on shifting price ratios, and strong domestic demand for biofuels. This outlook examines the U.S. Department of Agriculture’s (USDA) latest projections for the 2025/26 season, providing farmers with the data-driven insights needed to build resilient financial strategies.
By analyzing the forces that could shape prices, producers can better optimize planting decisions and manage risk effectively in a turbulent market.
Key Market Drivers for 2025
Several macroeconomic and global factors are creating a volatile environment for American producers heading into 2025. This analysis draws from two key USDA reports:
- Agricultural Outlook Forum (AOF): The February report that sets early-year expectations.
- World Agricultural Supply and Demand Estimates (WASDE): The more recent July report that provides the latest projections.
The key drivers identified in these reports include:
1. Production Costs: Producers are seeing some relief on input costs compared to the previous year. Spot prices for anhydrous ammonia fertilizer are down about 5%, with diesel fuel showing a similar decrease.
2. Global Supply Pressures: Soybean prices face continued downward pressure from large supplies in South America. Global soybean ending stocks for 2025/26 are projected to increase to 126.1 million tons, driven by higher stocks for Brazil and the United States.
3. Price Ratios and Planting Incentives: The February 2025 Agricultural Outlook Forum noted that the ratio of new crop soybean-to-corn prices at that time, at just under 2.4, was the lowest since 2013, making corn a relatively more attractive crop for planting.
These factors combine to create a market environment where price incentives clearly favor corn planting over soybeans heading into the 2025 season.
Global Context: South America and China’s Influence
The price volatility facing U.S. soybean producers is directly linked to major shifts in the global market. Surging production in South America and the immense import demand from China are the two primary forces reshaping the trade landscape and impacting American farm profitability:
i. Brazil’s soybean production has expanded rapidly in recent years, driven by higher demand from China and a lower relative cost to expand planted area. For the 2025/26 season, Brazil’s production is forecast at 175.0 million metric tons, with exports projected at 112.0 million. The country’s ending stocks are projected to be 36.11 million metric tons, contributing to large global supplies that pressure U.S. prices.
ii. China remains the world’s dominant soybean importer, creating the demand that fuels South American production growth. For 2025/26, China’s soybean imports are forecast at 112.0 million metric tons. The country’s domestic crush is projected at 108.0 million metric tons, reflecting its central role in the global processing market.
This dynamic has fundamentally altered global trade flows. The U.S. share of global soybean exports is now expected to remain below 30%, a substantial drop from nearly 40% a decade ago.
2025/26 U.S. Soybean Outlook
The United States soybean outlook for 2025/26 is defined by slightly lower production, robust domestic use driven by biofuel demand, and reduced exports. The key projections from the USDA’s July 2025 WASDE report are:
- Production: The USDA forecasts a planted area of 83.4 million acres. With a trend-adjusted yield of 52.5 bushels per acre, total production is expected to reach 4.335 billion bushels.
- Domestic Use: Soybean crush is projected to rise to 2.54 billion bushels, supported by strong demand for soybean oil, with use for biofuel estimated at 15.5 billion pounds.
- Exports and Stocks: The outlook includes exports of 1.745 billion bushels and ending stocks of 310 million bushels.
- Price: The season-average farm price for soybeans is estimated at $10.10 per bushel. The associated meal price is forecast at $290 per short ton, with the oil price expected to be 53 cents per pound.
Overall, while global pressures may limit export growth, strong domestic demand for soybean products provides a supportive floor for the market.
2025/26 U.S. Corn Outlook
The 2025/26 U.S. corn outlook is for a substantial crop, leading to larger overall supplies. According to the July 2025 WASDE report, high production — driven by a large planted area and a strong yield forecast — is expected to more than offset lower beginning stocks. Key projections for the season include:
- Production: Planted area is forecast at 95.2 million acres, with harvested area at 86.8 million acres. The yield is projected at 181.0 bushels per acre, resulting in a total production of 15.705 billion bushels.
- Domestic Use: Domestic consumption is expected to remain robust. Corn used for ethanol is steady at 5.5 billion bushels, while feed and residual use is projected at 5.850 billion bushels.
- Exports and Stocks: Exports are forecast at a significant 2.675 billion bushels. Ending stocks are projected to be 1.660 billion bushels, reflecting the balance between large supplies and strong overall use.
- Price: The season-average farm price for corn is projected to be $4.20 per bushel, holding steady from previous forecasts and reflecting the well-supplied market.
This outlook suggests a market characterized by ample supply, which is met by consistent domestic demand and strong export projections, ultimately leading to a stable price environment for producers.
The 2025 Acreage Battle
Planting decisions in 2025 will be heavily influenced by the relative profitability of corn versus soybeans. The February 2025 AOF report first highlighted this trend, noting that the new crop soybean-to-corn price ratio was the lowest since 2013, creating a strong market signal that favors corn.
The most recent data from the July 2025 WASDE report reinforces this dynamic, projecting the season-average farm price for corn at $4.20 per bushel and soybeans at $10.10 per bushel. In direct response to these price signals, the USDA’s June 30 Acreage report projects a significant divergence in planting intentions.
- Corn: Plantings are forecast at a robust 95.2 million acres as producers capitalize on the more favorable market incentives.
- Soybeans: Plantings are projected to be lower at 83.4 million acres, reflecting the downward price pressure from large global supplies.
This data indicates a clear and expected response from American farmers to maintain strong corn acreage while adjusting soybean plantings downward to maximize profitability in a volatile market.
Strategies for Managing Risk
Given the potential for significant price swings in 2025, a proactive risk management plan is essential for producers. Developing a resilient financial strategy involves using established tools to protect profit margins from adverse market movements. For example:
1. Use Hedging Contracts: Producers can use futures and options contracts to lock in prices for their expected production. This provides greater certainty and protects margins from downside price risk.
2. Adopt Industry-Standard Tools: Just as producers in other agricultural sectors use tools like cattle insurance to protect their operations, grain farmers must employ disciplined risk management to navigate the challenges of 2025.
Producers who integrate these financial tools into their operational planning are better equipped to handle price volatility and secure profitability.
Conclusion
The outlook for 2025 presents a complex picture for corn and soybean producers, marked by both challenges and opportunities. A dominant theme is the downward pressure on soybean prices from massive South American supplies, which tilts the economic incentives toward corn planting in the United States. At the same time, strong domestic demand for both corn and soybean products, particularly for biofuels, provides a supportive floor for the market.
Ultimately, navigating this volatile landscape will require more than just a successful harvest. Producers who combine efficient production with a disciplined, proactive risk management strategy will be best positioned to thrive amidst the uncertainties of the year ahead.
Contributing Author: Dustin Baker is the Director of Education and Research at Commodity & Ingredient Hedging, which provides risk management and commodity hedging strategies that allow clients to sustain and grow their agricultural businesses despite market volatility. Baker helps market participants deepen their understanding of agricultural margin management concepts and strategies. In addition to leading educational initiatives, he regularly contributes to CIH’s publications that support risk management for agricultural producers and buyers.
