Corn: 15.203 billion bushels of corn predicted by the USDA does not lie. That’s a lot of corn then we look around and we can see the resultant low prices from that. We have to be cognizant that as the corn piles get larger during this great harvest season basis might suffer further. Of course, that might depend on many things, one of which is whether farmers lock the bin door shut. Keep in mind that corn usage is off the charts currently forecast in the United States to be at 14.99 billion bushels for this crop year. That is an amazing figure especially when you consider the tremendous record crops, we’ve been getting over the last two years. In other words, we need these record crops to keep up with record demand. At a certain point there’s going to be a fracture in this equation and prices will boom to the upside. However, where we are now is still bearish based on this big production. The December 2024 corn contract is currently priced at 17.25 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 21st percentile of the past five-year price distribution range.
Soybeans: Do soybeans have any friends? It wouldn’t seem so especially with big stocks in the United States and that global production machine down in Brazil and Argentina. You could make the argument that soybeans will be followers because of their bearish market fundamentals. However, we also know that soybeans are always the great liars. So, we wait to see if there will be any surprises in the soybean market. One such surprise might be South American weather. Going into the week of October 11th soybeans have lost about $0.25 over the previous week largely because of rainfall predicted for Brazil. Having said that, it is still dry in many Brazil production areas, rivers have lower water levels, and it remains a concern. Needless to say, we are in a South American weather market. It will always be a challenge knowing exactly how this weather will affect soybean production in the southern hemisphere. However, there will be many fund players that think they know. The November 2024 soybean contract is currently priced 29.5 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 19th percentile of the past five-year price distribution range.
Wheat: Wheat production is global but of course we always have to watch the market factors affecting our cash price. At this time what we see is dry weather in the South-Central United States where wheat planting is about commence. This has some of the funds in the market on the verge of going long after wrapping up their short positions. Wheat production in Russia, Ukraine, Argentina and the United Kingdom is down reflecting lower global production. With global ending stocks at 9-year lows, is it time for the wheat market to wake up? There definitely is some potential here. In Ontario that potential has much to do with the current crop being planted in tremendous weather over the last three weeks has led to much Ontario wheat getting into the ground under optimal conditions. There is also still time for much wheat to be planted later in October especially in southwestern Ontario. Based on the global situation and the Canadian dollar at 72 cent level, new crop wheat prices need to be watched very closely over the next few weeks.
