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Market Trends Report – December & January 2024

Personal Note:  It is with a heavy heart I write this.  Earlier in December I learned of the passing of Kim Ratz, who worked at Grain Farmers of Ontario for the last 13 years and 5 years with the Ontario Corn Producers Association before that.  Kim was my editor of Market Trends through several of those years and was instrumental in its success.  She was always helpful and was a true asset to Ontario agriculture.  She will be greatly missed.

US and the World

     It is that time of year again when we look in the rear-view mirror after putting the combine away and completing fall tillage.  The last USDA crop progress report was on November 27 where the US was 96% complete corn harvest.  At that time, Michigan and Ohio were at 79 and 80% complete. However, time has gone by, and the majority of the greater North American corn belt is off.  Despite some uneven conditions during a smoky easy summer crops made record levels. The USDA chimed in with their latest WASDE report on December 8th

     The December USDA report is usually one of the quieter reports of the year and this year was no different. The biggest news coming out of the report was Brazilian soybean production was actually reduced 2 million metric tonnes to 161 million metric tonnes or 5.9 billion bushels.  The US domestic corn crop remained the same with domestic production at 15.234 billion bushels with yield remaining at 174.9 bushels per acre. Ending stocks for corn for the 2023/24 crop remained at 2.156 billion bushels.  Feed and residual use was set at 5.65 billion bushels, ethanol use at 5.325 billion bushels and exports remained at 2.1 billion bushels.

     There has been some uneven weather in Brazil and it’s likely the reason that the USDA actually decreased Brazilian production down to 161 MMTs.  Many private forecasters have actually gone lower than that. Total soybean production in the United States remained the same from last month at 4.13 billion bushels and yield remained at 49.9 bushels per acre. Domestic ending stocks remained at 245 million bushels for the old crop year. The Argentinian soybean crop estimate remained at 48 million metric tonnes which is the same as it was in November.  US wheat ending stocks came in at 659 billion bushels which is significantly lower than the November estimate of a 684 million bushels.

      On December 15th, corn and wheat were higher and soybeans futures were lower than the last Market Trends report.   March 2024 corn futures were at $4.83 a bushel.  The January 2024 soybean futures stood at $13.15.  The March 2024 Chicago wheat futures closed at $6.29 a bushel. The Minneapolis March 2024 wheat futures closed at $7.30 a bushel with the Sept 2024 contract closing at $7.51 a bushel.

     The nearby oil futures as of Dec 15th closed at $71.41/barrel down from the nearby futures recorded in the last Market Trends report of $77.17/barrel. The average price for US ethanol in the US was $2.11 a US gallon, down from the $2.24 last month.

     The Canadian dollar noon rate on December 15th, 2023, was .7479 US, up versus the .7236 US reported here in the last Market Trends report. The Bank of Canadas lending rate remained at 5%.


     In Ontario corn harvest is done in most of the province but there’s still a significant acreage in parts of the Far East where snow has inundated fields into December. As of December 15th, some of this has abated and combines were back in the field but for the most part harvest is over everywhere else. Despite that you will still find the odd cornfield still standing and of course some of that is by choice. Many farmers will be hoping for good snow cover this winter for the 860,000 acres of wheat planted this past fall.

     Basis levels have fallen into Ontario reflecting not only the increase in the value of the Canadian dollar but also the record crops in Ontario fields as well as surrounding states.  In short, it will take some doing to move out much of this corn whether it’s in Ontario or the surrounding U.S. states. Yes, lower prices are always a reflection of where grain can be moved, and that’s one reason basis has contracted over the last several weeks. 

     The soybean basis has not moved as much as corn reflecting the different market structures within Ontario.  However, soybeans and wheat are more sensitive to the Canadian dollar position which has been dancing below $0.75 for several months now. Producers need to be cognizant of that and watch that closely as it could result in price spikes combined with futures movement.  At the present time new crop cash soybean prices are reasonably close to $16 a bushel while cash corn is $6 a bushel for next year.  With such a preponderance of crops both in Ontario and North America wide, modest price appreciation might need to be rewarded.

    Old crop corn basis levels are $0.45 to $1.15 over the March 2024 corn futures on December 15th across the province.  The new crop corn basis varied from $.85 to $1.20 over the December 2024 corn futures.  The old crop basis levels for soybeans range from $2.95 cents to $3.28 over the January 2024 futures.  New crop soybeans basis levels range from $2.97-$3.20 over the November 2024 futures.  Ontario SRW wheat prices are in the $7.26 range.   On December 15th the US replacement price for corn was $6.60/bushel.  You can access all these Ontario grain prices in the marketing section at

The Bottom Line

     2023 has been a very good year for production not only in the United States and Ontario but also South America. You could almost make the argument that watching the corn market over the last several months has been boring as we’ve been in a sideways downward range. It’s not quite the same in soybeans but prices have gone lower throughout 2023. In many ways, it’s a return to normal to the years before the Ukraine Russia war and more shortages of supply. Finding marketing opportunities may look humbler in this environment then they have previously.

     There is some conjecture on the horizon on how big the corn supply will be.  For instance, we know that we have a record crop in the United States and Ontario but there is also the Brazilian crop.  which is not only being planted but also planned. The USDA is estimating the Brazilian corn crop to come in at 5.08 billion bushels which is down from the record high of 137 MMT last year.  CONAB, The Brazilian crop agency is estimating Brazil corn production to come in at 4.67 billion bushels, lower than the USDA estimate, an acknowledgment of the tough weather that they’ve had in Brazil’s growing region.

     Keep in mind that the first Brazilian corn crop represents about 19% Brazil’s total current production. The second crop called Safrinha, will be planted in January and February following up soybeans.  The Brazilian average yield for corn is approximately 90 bushels per acre which is less than half of what the US and Ontario produces on the same acre.  As it is, there is so much production risk ahead here and it’s hard to determine how much corn will be available on the world market. In fact, it is likely that the United States recaptures the title of the world’s biggest corn exporter for this coming year. It is making it difficult for corn prices to rise at the CME.

     It is unfortunate because generally speaking we get a post-harvest rally and we have not seen that this year. In fact, there is even a diversion on futures prices between the CME and the Bovespa exchange in Brazil.  Brazil’s new crop month is the equivalent of $6.29 bushel vs the CME at $4.83.  Don’t take too much from that, other than there is a general disagreement on corn prices deep within Brazil, where physical corn is just a theory now and hot temperatures could make it, all disappear.

Commodity Specific Comments


     In the corn market we have been range bound for weeks and weeks and it is unlikely to break out especially with the preponderance of corn on the ground across North America. Keep in mind that we have seen a rally in wheat on if wheat decides to rally again that will likely take corn with it to some extent. Or at the very least, a wheat rally will keep corn from going down even more.

     However, to muse a bit as we go into January what will the December 2024 price of corn be if we have another record crop next year in the United States? Will December futures go below $4? Of course, there is a lot of risk between now and then, but the answer is yes most likely under that scenario.  Once again, a calamity somewhere around the world would interrupt this.  However, another potential 16–17-billion-bushel supply is an awful tall pile to whittle away.  Let’s not get ahead of ourselves.

     The March corn contract is currently priced at 8.25 cents below the May 2024 contract which is a bearish indication of new crop corn demand. Seasonally, we know that corn prices tend to peak in early June and bottom out in early October. The March futures contract is at the 32nd percentile of the past five-year price distribution range.


     In the soybean market producers just need to look at Brazilian soybean conditions to get an idea about where soybean prices might go. If you take to social media, you will see all kinds of pictures of droughty conditions in Brazil, but that is never a really good reflection of the total area. As it stands now, the weather risk is still there in Brazil but for the most part now it is past. That doesn’t mean it can come again in the next few weeks, it just looks now that weather is going to be OK for the Brazilian crop which makes it tough to get soybeans into a price rally position.

    Argentina has been in the news with the election of a new government promising austerity and a move to go away from the peso and into the US dollar. As it is, any movement that way will likely eventually be good for Argentinian production. However, they do not have the land mass of Brazil has but they do have very productive soil and there is potential for more production. Needless to say, it might come in the soybean oil market and the meal market versus soybeans itself. However, at this time it is so new it is very difficult to say how that will play out.

     The January 2024 soybean contract is currently priced 15.75 cents below the March 2024 contract which is considered bearish.   Seasonally, soybean prices tend to peak in early July and bottom out in early October. The July 2024 soybean contract is currently at the 56th percentile of the past five-year price distribution range.


     The unusual activity in the wheat market over the last few weeks has been China showing up to buy soft red winter wheat from the United States. This is unusual but it must have to do with the price of wheat being so low.  However, the wheat market is off the lows over the last 30 days and did see a significant rally.  That demand is showing up is likely still there at these price levels and we could see an even greater rally in the next few weeks.  Keep in mind, usually in the wheat market it’s all about cheap, with Russia being the leading cheapest exporter.  For the moment, that will always be a wild card in the wheat market.

     We’ve got about 860,000 acres of wheat planted in Ontario; we’ll see how much leftover is depending on what the Canadian winter gives us. At the present time you can contract wheat for approximately $7.50 a bushel off the combine for next summer.  Of course, with wheat, there is so much risk as you expose it to four different growing season and as we all know it can be fickle on the grading table during a hot summer day.  It makes for some careful marketing.

The Bottom Line (cont.)

     The Canadian dollar has gained over penny in the last few weeks reflecting much of its behavior over the last year. Any rise in the Canadian dollar or lowering of the Canadian dollar has a very big effect on the cash price of soybeans and wheat. It is not as much for corn especially on a big year like this where we have record corn production across the eastern corn belt.  The Bank of Canada has maintained the interest rate at 5% and that is likely to continue especially with the current inflation rate of 3.1% with the target of 2%.  The Bank of Canada list some of the challenges and sources of uncertainty as geopolitical tensions, extreme climate events and high levels of debt.  This along with the gyrations in the value of the American dollar will surely affect our cash grain prices in Ontario.

     Soybeans it would seem hold a little bit more promise for price appreciation than corn and wheat. However, that will much depend on how many soybeans are produced in Brazil and Argentina over the next few months.  Keep in mind soybean prices would be a lot higher if we’re only looking at US ending stocks which are the lowest, they have been in the last eight years. It is the spectre of a big south American crop that is keeping the soybean price under control.

      It might be the end of the year for North American farmers with the specter of snow and ice inundating the land, but in Brazil and Argentina it is the equivalent of late spring and summer where weather will trump all production concerns. Yes, there has been hot and dry weather affecting early soybean planting, but more moderate rainfall is expected to come into Brazil on December 19th into January. As always weather markets in South America are fickle at best with regard to price appreciation in North America.  Needless to say, that represents some of the best hope for a post-harvest rally in soybean prices going ahead.

     Over the next several weeks Ontario grain producers will be switching gears into the new crop marketing mode but also the new crop production mode as the calendar date changes into 2024. Keep in mind many of our old geopolitical tensions continue to exist and represent a wild card at our grain price prognostications.  Marketing grain is always a challenge, as markets all year long.  At the same time, there is always a cost to storing old crop grain and it has to be measured against pricing possibilities. As we look ahead, there will be many marketing opportunities. Daily market intelligence will remain key.  Happy New Year to you all.