Activity was mixed in the North American grain and oilseed markets during the last full week of January, as traders were busy looking for direction from South America, where Brazil was in its early stages of harvesting its soybean crop and seeding its next corn crop.
The looming influx of recently harvested Brazilian soybeans may be casting a shadow over the oilseed markets, but declining production estimates from many private analysts after an adverse growing season were a bit supportive. Meanwhile, Argentina’s soybean harvest is still a ways off, with nearby weather forecasts turning hotter and drier.
Soybean futures moved up and down during the week, with the March contract holding above the psychological US$12.00 per bushel level. The price swings in corn were more subdued, although values also managed to hold above the three-year lows hit recently.
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The flow of speculative money, reacting to whatever world news is available, can be expected to steer grain and oilseed futures in this stretch between Northern and Southern Hemisphere harvests, Phil Franz-Warkentin writes.
Wheat trended higher for most of the week before running into resistance, with the grain taking more direction from the broad geopolitical issues such as the ongoing conflicts in Ukraine and the Middle East.
Minneapolis spring wheat fell below US$7.00 per bushel in the front month contract for the first time in nearly three years on Jan. 17, eventually hitting a contract low of US$6.7875 in March. The contract eventually clawed its way back to that US$7.00 per bushel level, although the overall trend remains pointed lower ahead of spring planting.
Agriculture and Agri-Food Canada gave its first look at 2024/25 seeding ideas in its January supply/demand report, calling for a 1.9 per cent reduction in all wheat area, at 26.50 million acres, and a 1.5 per cent drop in canola plantings, at 21.75 million acres. However, a return to average yields would lead to steady or increased production for the two major crops.
Total wheat production in 2024/25 is forecast to increase to 33.30 million tonnes, from 31.95 million in 2023/24. Canola production is forecast at 18.37 million tonnes, which would be in line with the 18.33 million tonnes grown the previous year.
In the U.S., the seasonal ‘battle for acres’ between soybeans and corn could be heating up. The early money is on soybeans, with many private forecasters calling for increased soybean area on the year at the expense of corn.
U.S. farmers seeded 83.6 million acres of soybeans in 2023, with some early trade estimates topping 85 million acres. Corn area in the country came in at 94.6 million acres last year, but that could fall below 93 million in 2024. While the higher costs of growing corn were likely contributing to the shift to more soybeans, some new soybean processing facilities are coming online in the country.
