Corn: We have had about a dollar rise in corn futures prices since harvest time. That has been an incredible surprise for many analysts. Some of them have called this a gift to corn producers. However, the market is never wrong, and those low prices certainly caused demand to explode. Will the corn trading algorithm start printing over $5 futures? That’s certainly something that every corn farmer would like to see especially with the algorithm’s affinity for printing round numbers. Much will depend on the Safrinha crop in Brazil currently going into the ground. A target of $5.08 might be in the offing, but of course the talk of tariffs makes all of this so tenuous. The March 2025 corn contract is currently priced at 12.25 cents below the May 2025 contract a neutral indication of old crop corn demand. Seasonally, we know that corn prices tend to peak in early June and bottom out in early October. The March 2025 corn futures contract is at the 36th percentile of the past five-year price distribution range.
Soybeans: The soybean action has all been in South America, specifically Argentina which has been dry. This actually led the USDA to cut the Argentinean production by 3 MMT. However, you know the way droughts are, they end when it rains. Rains have returned recently, and this situation must be monitored closely as we move ahead. Brazil on the other hand is a different story. They are expecting a record crop and it is very likely to happen. They did not have any bad enough weather conditions to tamper that. The USDA is sitting at 166 MMT, but private estimates are much higher. In essence, there are soybeans everywhere with China waiting to buy. This surely will affect the planting acreage discussion as we move ahead toward March. Soybean plantings are likely to lose out in the United States. The March 2025 soybean contract is currently priced 16.5 cents below the May 2025 contract considered bearish for soybeans. Seasonally, soybean prices tend to peak in early July and bottom out in early October. The March 2025 soybean contract is currently at the 23rdth percentile of the past five-year price distribution range.
Wheat: Wheat prices were laggards compared to corn and soybean prices since harvest time. However, cold weather in the American Midwest have led to an increase of approximately $0.60 a bushel on wheat prices. Also involved in this has been cold weather in Russia and Ukraine. A 60-cent increase in the price of wheat since the last Market Trends report is like an earthquake in the wheat market. Cold weather in February will continue to push uncertainty in these prices. In Ontario wheat is under a pile of snow especially in the snow belt areas. So, it is very difficult to know with the condition of Ontario’s winter wheat crop. In the deep SW earlier rains had frozen which doesn’t bode well especially for the weather we’ve had over the last month. The good thing is that prices are much higher than they were a month ago partly because wheat futures have increased and partly because the Canadian dollar is so low. This surely is a pricing opportunity versus a month ago, but of course, is the wheat alive under all that snow and ice? That is always the question wheat producers need to answer when contracting this time of year.
