CORN: It would seem at this point in late July that “hot and dry” isn’t a thing for this growing season. For instance, hot weather at pollination always tempers corn yield but this year so far, we haven’t got that, and it is not forecasted for the rest of July. However, how about all the drowned-out areas in North American cornfields? Clearly, this will have an impact but likely on the number of harvested acres at the end of the day. As mentioned before the funds are having a big impact on the prices as we head into August. As of July, the 9th, the managed money in corn at Chicago was at a record net short and the largest since 2019. The funds are often portrayed as villains, but they do add liquidity to the market. When things turn around, they will go long, but of course there is no way knowing when that may happen. The December 2024 corn contract is currently priced at 13.75 cents below the March 2025 contract which is a bearish indication of new crop corn demand. Seasonally, we know that corn prices tend to peak in early June and bottom out in early October. The December 2024 futures contract is at the 19th percentile of the past five-year price distribution range.
SOYBEANS: One welcome sign for US soybeans is that as of July 19th September FOB prices are now $0.38 cheaper at the US gulf than they are in Brazil. Being cheaper usually wins especially in agricultural commodities and this should spur some export business for American soybeans. One specter that will not help American soybeans is politics. At this juncture nobody knows who is going to win the American election but if it is the Republicans there may be another possibility of tariffs being applied against China. The Chinese will likely respond with tariffs on American soybeans further degrading any potential for further business. The November 2024 soybean contract is currently priced 25.75 cents below the March 2025 contract which is considered a bearish for new crop beans. Seasonally, soybean prices tend to peak in early July and bottom out in early October. The November 2024 soybean contract is currently at the 27th percentile of the past five-year price distribution range.
WHEAT: There have been problems in wheat fields across Europe whether that be in France or whether that be in Russia. In France there are quality issues with the wheat coming out of the field the same with Germany. At the same time there is very hot weather across Russia and Ukraine which is set to have an impact on wheat yields. However, keep in mind the wheat price is at the low end of the range and this is not helping things. It can be the frustrating thing about wheat, a crop with 9 lives, and a corresponding price that doesn’t seem to add up. In Ontario as of the 19th of July wheat harvest continues and producers are hoping for better weather ahead. The price of wheat has dropped over the last several weeks down to the $6.40 level per bushel. There had been opportunity earlier to contract briefly over $8 but it was a brief interlude. As we go into August wheat producers will surely be deciding how many acres, they want to plant come September.
