Corn: The USDA report was friendly to corn with the 200 million bushel cut back on stocks. Initially corn prices went up but hit a brick wall at the $4.50 level before retreating back. Corn has seen a little bit of blue sky lately, but the $4.50 level seemed to be very resistant. Needless to say, for the rest of this year it is likely to trade sideways.
In November the USDA actually cut US domestic yield pretty aggressively and you’ve got to wonder if they will do it again in January. The basis levels for corn in the United States have been fairly buoyant for this time of year. The final numbers can be explosive in January so market watchers will be looking with a keen eye to see whether USDA cuts it again.
The March 2025 corn contract is currently priced at 7.25 cents below the May 2025 contract a neutral 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 26th percentile of the past five-year price distribution range.
Soybeans: Our Brazilian friends are looking at another record crop of soybeans in Brazil which could possibly put world ending stocks later this year to the highest levels ever. It is not the scenario for higher soybean prices but of course at this stage it’s still a theory. If we get a hot and dry period in the southern hemisphere that will cut back on things. As always, we’re in a weather market with this and our prices will adjust accordingly.
Does this mean that the soybean market is right ready to tip over? Well, let’s hope not but supplies are sufficient. We’ve got support levels on the nearby contract of around $9.80 and we’re very close to that now. The specter of tariffs is out there, and we all remember when China put tariffs on American soybeans last time. Needless to say, American soybean have been competitive going into China which might set up some sales pre-January 20th. As it is, Brazilian soybeans will always be their choice going forward.
The January 2025 soybean contract is currently priced 6.75 cents below the March 2025 contract considered neutral for soybeans. Seasonally, soybean prices tend to peak in early July and bottom out in early October. The January 2025 soybean contract is currently at the 18th percentile of the past five-year price distribution range.
Wheat: World wheat ending stocks are at some of the lowest levels in decades so you could imagine a scenario where wheat prices explode higher if we have any type of market calamity around the world. As per usual, wheat is grown everywhere and there just seems to be enough wheat to fill the gaps when shortages develop. There is always the Russia Ukraine hot war, but it seems like that is dialed in even though nothing could seemingly be worse for the wheat trade in the Black Sea. Fresh news of a production calamity will likely only send wheat prices higher.
The beautiful Ontario fall weather helped put in some very nice wheat fields across the province. However, it is unknown at this point whether we are into record acres territory. As it is, we should hit a million acres and then see how much is left come April. With the Canadian dollar hovering on the 70-cent level, it holds out the real possibility of Ontario wheat prices for July 2025 to be contracted over $7.00 a bushel. As always, market orders for wheat in this market environment at $8 and above are always benchmarks to strive for.
