North American grain and oilseed markets were up and down during the last full week of February, holding relatively rangebound overall.
News of a frost in Argentina sent soybean, corn and canola values climbing higher on Feb. 21, as crop estimates out of the drought-stricken country continue to be revised lower. However, the immediate bullish reaction quickly subsided, and most commodities took back their initial gains to move down as the week progressed.
Farmers in Brazil were making headway with soybean harvest and planting the next corn crop, despite recent weather-related delays.
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The one-year anniversary of Russia’s invasion of Ukraine provided little direction for grains and oilseeds, but it did serve as a reminder that the ongoing conflict continues to disrupt grain movement and production out of the region. The agreement allowing Ukrainian grain to be shipped through the Black Sea is set to expire later in March, but most industry participants expect to see it extended. Meanwhile, cheap Russian wheat is undercutting other origins for global tenders.
The fallout of a massive storm hitting much of the northern U.S. remains to be seen. The system brought needed precipitation to some winter wheat-growing regions. However, southern reaches of the Plains missed out on the moisture and were reporting above-normal temperatures in some regions.
The U.S. Department of Agriculture held its annual Ag Outlook Forum on Feb. 23-24, providing the agency’s first predictions for the upcoming crop year. Nothing stood out in the numbers, with only minor adjustments on the year expected.
U.S. soybean area was forecast to hold steady on the year at 87.5 million acres, while corn was forecast to increase by 2.7 per cent, to 91 million acres. Average prices for both crops were forecast to decline in 2023-24 compared to the previous year, with soybeans forecast to be down by 9.8 per cent and corn down by 16.4 per cent. However, USDA’s chief economist noted prices will still “remain high relative to recent history.”
For wheat, USDA pegged total planted area in the country at 49.5 million acres, which would mark the highest level in seven years. The agency anticipates average wheat prices in the country will dip by 5.6 per cent.
Looking at Canadian crops, Agriculture and Agri-Food Canada released updated supply/demand estimates on Feb. 17, but didn’t include any significant adjustments to 2023-24 projections. Seeded canola area is forecast to be up by 1.6 per cent on the year at 21.75 million acres, while total wheat area is expected to be up by 1.8 per cent at 25.84 million acres.
Much like in the U.S., average prices for the two Canadian crops are also expected to be down on the year. AAFC is working with an average canola price of $850 per tonne for 2023-24, which compares with $880 for the current marketing year and $1,075 reported during the 2021-22 drought-year.
Average wheat prices in Canada, excluding durum, are forecast at $410 per tonne by the government agency for 2023-24. That compares with an estimated $420 per tonne for 2022-23 and $447 per tonne the previous year.
