Corn needs -4.4 mil plantings and -10% yields to return, and stay, near $5.00.

In Monday afternoon's discussion with the brokers the question about what type of yield hit for 2024 would be needed to change this heavy supply corn story. As you know, Allendale currently holds a severe -4.4 million planting estimate (90.2) and with trend yields we cannot make a story which suggests corn will hold a return to higher prices. The other estimates released recently were -1.8 for Farm Futures magazine (92.8) and -3.6 from S&P Global. USDA's November Baseline Projections report suggested 91.0.

In the discussion is was brought up that last year we laid out various yield scenarios during last year that helped to calm fears of a runaway rally. Here's the starting discussion for 2024/25.

Disclosure: These scenarios all used a 50% demand offset to supply changes. Demand flows with supply changes. Technically, the percentage offset by demand would change at the more severe supply declines. For this general discussion here, this is fine.

For pricing anything 1.8 billion bushel stock-wise all imply pricing near or below $4.00 futures. 1.6 stocks is where you could see a movement to around $4.85. That is our goal for this discussion. To accomplish that, in addition to our severe -4.4 million planting hit, a -10% correction from trend yields would be needed to 163.7. This is shown in the columns on the right-hand side in the center.

As shown by the chart below, a -10% yield hit would be the second worst of the last 25 years.

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