Corn: USDA says we have a record crop in American fields so it must be true. However, there is not a lot of complaints about yield this year outside of Ontario and we could be looking at a bin buster like never before. It brings up the spectre that the harvest low might take a while this year and prices might have to move even lower. Crop science and genetics is certainly going to tell a story this year where the weather was benign. Keep in mind that 2-billion-bushel corn carryout justifies $4.00 corn futures. However, we are below that now with much old crop corn to sell in the United States. Looking back, we can definitely say that rain makes grain despite some areas of the country being waterlogged for most of the spring and early summer. Needless to say, “cheap corn” represents an opportunity for demand to build into September October and November. The December 2024 corn contract is currently priced at 18.55 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 16th percentile of the past five-year price distribution range.
Soybeans: Soybeans might be the great liars but at the end they always tell the truth. USDA came in with a 560 million ending stocks figure which was more than anybody could have imagined. This is the largest ending stocks figure that we have seen in the last six years with the resulting lower prices.At the present time Chinese purchases of American soybeans is at approximately 1 MMTs, while last year this was 4 MMTs. At a certain point as soybeans go lower and this crop comes in China is likely to purchase at these lower prices representing very good value. Looking ahead, it’s going to take a weather issue in December or January in South America to spark these soybeans higher. The November 2024 soybean contract is currently priced 35 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 17th percentile of the past five-year price distribution range.
Wheat: The USDA report showed us that global ending stocks for wheat continue to trend lower. This is approximately the fourth year in a row that global ending stocks have been trending lower. However, the wheat market has responded with a collective yawn to all of this. This typifies the wheat market where it is grown almost everywhere and until there is a dire shortage in one of the major players the wheat price stays low. Even renewed fighting in Russia and Ukraine has not change the wheat price paradox.However, you would think at a certain point the wheat price would start to percolate with lower global stocks and quality issues at places such as France. This would only help Ontario producers who are stuck with a wheat prices in the $6.30 a bushel range. With the wheat harvest behind us in Ontario farmers will be looking toward the fall hoping for better weather to plant wheat than they had in 2023. However, low price prospects are certainly challenging that assumption.
