What’s ahead for the grain prices the last few weeks of 2024?
It’s not uncommon for the grain markets to see light trade as we roll into the holidays.
Rich Nelson with Allendale, Inc. says the historical and seasonal tendencies are also at play in the grain markets.
“We always kind of hear that the bears get Thanksgiving, but bulls get Christmas. That is generally true here for the grains generally corn soybeans and we do have likely higher prices going from Thanksgiving to Christmas, so that may be a factor to consider here in these next few weeks as well here,” he says.
Currently the soybean market is watching South American weather and so far it has been mostly non-threatening.
As a result, many private forecasters have continued to raise Brazilian crop estimates into the 170 to 172 million metric ton range, which would be a record.
However, Nelson says soybeans haven’t even reached their critical growth stage in South America.
“Weather really matters as we go into that reproductive stage, which really for both Argentina and Brazil is really in that January /February time frame. so whether really starting next month is a bigger issue.”
The Brazilian Real has also plunged to new lows verses the U.S. dollar which is also negative for soybeans.
The corn market has held up much better than the soybean market as it has seen support from better demand and corn soybean spreads.
However, will the soybean market will serve as an anchor for corn and keep it from reaching higher prices?
Nelson says, “Corn can probably divorce itself from soybeans if needed, especially with this much different and much better fundamental outlook right now.”
The wheat market is also in transition and Nelson thinks after the first of the year it will start to pay more attention to the global production issues.
“The focus in January -February, we’re going to see a sharp drop in exportable supplies out of both Ukraine and Russia. Both of them have heavy year -to -date exports, but those numbers are going to sharply drop off. In fact, I’m looking at the Russia story right now, January through June, they’re going to see as much as 10 million tons lower than last year than last year exports,” he explains.
He thinks that sharp drop will be supportive of U.S. wheat prices eventually.
