Glacier FarmMedia — To analyst Tom Lilja of Progressive Ag in Fargo, N.D., there’s a difference in the commodity markets currently with the Middle East war and four years ago when Russia invaded Ukraine.
“The markets (in 2022) were telling farmers to plant every acre that they could,” Lilja said. “The Russian-Ukraine war has been in a heavy agricultural producing area.”
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“That spring, we were just coming off of a South American drought. Supplies of soybeans, corn and wheat were historically on the low side,” he added, noting there were a number of limit up days in the commodities, especially for wheat.
Today, Lilja said the situation is different, despite the hikes in soybeans, corn and wheat. There hasn’t been any limit up days.
“You can argue the view from South America right now, they have come off record yields,” he said.
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For 2025/26 soybeans, Brazil is on its way to another record harvest that’s to be about 180 million tonnes, according to the United States Department of Agriculture. Plus, Brazil is to have strong corn yields that are to produce a crop of around 132 million tonnes. Also, Argentina had a record wheat harvest of about 27.8 million tonnes.
As well, Iran isn’t as a major wheat producer that Russia and Ukraine are. Lilja said the latter two countries combined will provide about 108 million tonnes of wheat, while Iran’s production is maybe one-tenth of that.
Added to that, the U.S. situation is much different between 2022 and 2026. Lilja said U.S. wheat ending stocks four years ago were in a range of 570 million to 670 million bushels. The USDA has forecasted the 2025/26 carryover at 931 million bushels.
“We just haven’t seen the huge price spike that we saw back in February and March of 2022,” he said, but stressed the commodities are still following the increases in crude oil.
“The night crude oil spiked up (March 15-16) was the recent highs for U.S. soybeans, corn and wheat,” he continued.
