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 this article, we discuss the state of 2021-22 marketing year US corn and soybean exports. Demand for US corn and soybeans in global markets remains somewhat uncertain. How much of the current crop is actually exported will determine the level of ending stocks for this marketing year and the state of play for the 2022 crop. In a follow-up article, we will discuss the prospects for US crop acreage and production in 2022, another key driver of expectations for 2022 corn and soybean prices.
According to the December 2021 USDA World Agricultural Supply and Demand Estimates (WASDE), world corn and soybean production for 2021-22 are forecast to increase by 7.6% and 4.2%, respectively. US production is up in 2021-22 but larger production increases are occurring in other major exporters, especially Brazil and Ukraine which harvested relatively poor crops in 2020-21. China, historically the largest importer of soybeans and major importer of corn in 2020-21, is also expected to have increased domestic corn production by about 5%. Despite production increases, prices have remained relatively high because of robust consumption. USDA anticipates only modest increases in ending stocks-to-use ratios for 2021-22. World stocks to use ratios for corn and soybeans are expected to be essentially unchanged between 2020-21 and 2021-22. US ending stocks to use ratios for corn and soybeans are forecast to increase slightly but remain below levels seen in 2019-20 when prices were substantially lower than they are today.
Current projections for relatively tight stocks-to-use ratios at the end of 2021-22 require exports through the remainder of the marketing year to match expectations. The current USDA (WASDE) forecast for US corn exports is 63.5 million metric tons or 2,500 million bushels. For soybeans, USDA forecasts US exports to be 55.8 million metric tons, or 2,050 million bushels.
Figures 1 and 2 present the current pace of US export sales and shipments for corn and soybeans respectively. In each graph, the orange line represents current 2021-22 marketing year committed sales plus actual exports up to December 9, 2021, or Week 15 of the marketing year. To consider whether this pace is sufficient to reach the USDA (WASDE) forecast level given by the gray line, we assume that future export sales in each remaining week of the marketing year follow the pace given by the previous 5-year average described by the blue line.