Livestock producers: Extend feed coverage... We advise livestock producers to cover through July for corn and soymeal needs in the cash market. Corn futures have sustained heavy selling pressure over the past several weeks into value territory. Meal futures have fallen to the lowest mark in three weeks despite robust demand, evidenced in this week’s crush report. You were previously hand to mouth on feed coverage but now have coverage in cash through the end of July.
Check our advice monitor at ProFarmer.com for updates to our marketing plan.
All else being equal, farmers are often said to favor planting corn over soybeans. But data shows that in 10 of the last 13 crop years, Illinois farmers have seen stronger returns on soybean acres.
“Since 2013, average returns to soybeans have exceeded those for corn,” wrote Nick Paulson and Gary Schnitkey, agricultural economists at the University of Illinois, and Carl Zulauf of Ohio State University, in a farmdoc daily paper published Tuesday. Soybean returns exceeded corn returns in 10 out of the 13 years from 2013 to 2025, with an average advantage for soybeans of $53 per acre.
- And money talks. The researchers said acreage trends in Illinois indicate farmers are responding to the shift in relative profitability by planting a smaller percentage of their acres to corn.
The paper notes that corn held the advantage between 2000 and 2012, exceeding returns to soybeans in 10 years with an average advantage of $59 an acre, with the latter half of that period coinciding with years of high returns and farm incomes due to the biofuel boom that followed the adoption of the Renewable Fuel Standard. Large boosts to corn use for ethanol production largely came to an end by 2013.
When it comes to acreage allocation, the researchers noted that the percentage of acres planted to corn has trended down slightly across northern, central and southern regions of Illinois over the past 12-15 years, a stretch that corresponds to greater relative returns to soybean acres. The proportion of corn acres in northern Illinois has dropped back under 60% in recent crop years after exceeding that level from 2007 to 2018 with a peak of just over 69% in 2011. The share of corn acres in central Illinois has dropped down to around 50%, trending down from a peak of nearly 60% in the 2007 crop year. In southern Illinois, the percentage of corn acres has trended down from around 47% in 2012 to around 40% in 2024.
- The key question is whether returns will continue to favor soybeans over corn for grain farms in Illinois and across the Midwest. If producers continue to shift more acres toward soybeans, it would imply some farmers moving to planting soybeans on the same land in consecutive years – soybeans on soybeans, the authors noted, observing that agronomists tend to advise against that practice due to concerns over disease, weed and other pest pressures. They noted that research is under way on continuous soybean rotations.
Diesel crunch looms: U.S. diesel stocks in the US could fall to a critical threshold of 20 days of supply by August if commercial inventories keep declining at the recent pace amid the near-complete closure of the Strait of Hormuz, Daan Struyven, Goldman Sachs Group Inc.’s co-head of global commodities research, told Bloomberg Television.
US diesel supplies stood at about 28 days for the week ended May 22, according to the US Energy Information Administration. That was down from about 36 days at the end of January.
In a separate report, Bloomberg noted that in Illinois, farm diesel averaged a record $5.41 a gallon at the start of May, nearly double the price seen a year earlier. While prices have moderated somewhat in recent weeks amid prospects for a US-Iran peace deal, still rival levels last seen in 2022 after Russia’s invasion of Ukraine, the report said.
Farmer sentiment sinks: The Purdue University-CME Group Ag Economy Barometer released Tuesday showed another drop in farmer sentiment, dropping to 119 points in May from 121 in April. The “Current Conditions Index” dropped 8 points, while the “Future Expectations Index” fell 1 point. The Current Conditions Index reading was the lowest since December 2024.
- High input costs were listed as the biggest concern by 51% of respondents, a new high.
- 46% of respondents said high input costs were limiting improvements in their financial position this year.
- The percentage of respondents who think the U.S. is headed in the “right direction” declined from 57% in April to 52% in May, the lowest percentage since the survey began asking the question in July 2025.
Ethanol ‘boom’ and land prices: The ethanol “boom” of the early 2000s was a boon to corn prices, and a study published last month found that it also drove a substantial jump in farmland values across ethanol-producing states.
- “The ethanol boom substantially increased farmland values in the Midwest, with effects intensifying as renewable fuel requirements expanded and crop markets adjusted,” said Hoanh Le, assistant professor of applied economics and land valuation at South Dakota State University’s Ness School of Management and Economics, who led the study. “From a policy perspective, these results highlight that biofuel mandates influenced not only commodity markets but also the rural land market, with farmland values serving as a key channel through which energy policy reshaped the agricultural economy,” she said in an SDSU news release.
The ethanol boom – a result of changes in U.S. energy policies, particularly biofuel mandates, along with surging crude oil prices and the phaseout of the methyl tert-butyl either (MTBE) fuel additive – lifted corn prices by as much as 31%, the study found. Farmland values in ethanol-producing states increased by as much as 44%, according to the study, which provides the first causal estimates of the impact of the ethanol boom on farmland values.
- According to the study, farmland values in high corn-suitability counties increased by $1,147 per acre after 2005, equivalent to a 44% gain relative to pre-ethanol boom levels. The effects are even larger in the most productive counties, where land values more than doubled.
Jobs growth: Payrolls processing firm ADP on Wednesday said the U.S. economy added 122,000 private-sector jobs in May, the strongest rise since 2025 and above the average estimate of 110,000 seen in a Dow Jones survey of analysts. Economists warn the ADP data isn’t a reliable guide to official jobs data, which is due at the end of the week, but it does provide an indication the labor market remains stable.
That’s good news for consumer pocketbooks but it also offers no reason for the Federal Reserve to think about a resumption of rate cuts, particularly as it continues to assess the inflationary implications of the Iran war and the closure of the Strait of Hormuz.
Don’t miss these must-reads: