
As 2024 draws to a close, producers are asking whether there is any hope for higher commodity prices in the New Year. However, “hope” is rarely a viable strategy in grain marketing.
The adage “failing to plan is planning to fail” comes to mind. A solid marketing plan is like a roadmap, guiding producers through market uncertainties. In the spirit of the holiday season, let’s break down three factors that could potentially have a bullish impact on the 2025 grain market.
USDA
The December WASDE report delivered some unexpected positive news, even though major changes are not normal for that report.
On the demand side, U.S. corn ending stocks were lowered by 200 million bushels, which gave the corn market a boost. Typically, it’s the January WASDE report where adjustments to supply are made.
Consider how quickly corn and soybean crops dried down during the fall. Could the USDA lower corn and soybean yield to reflect drier-than-normal harvest moisture levels?
Exports
The export pace for U.S. corn and soybeans started the marketing year stronger than USDA forecasted, driven by smaller global crops and competitive U.S. grain prices. However, experts predict the pace will slow as South American crops enter the marketplace.
But what if the experts are wrong? If U.S. grain prices remain low, exports could continue to outperform expectations, despite headwinds from a strong U.S. dollar.
South American weather
South America’s growing season is off to a strong start, raising ideas for larger crops than last year. However, the harvest is still a long way off, and drier weather is beginning to emerge, particularly in southern Argentina. While the chances of La Niña are currently low, its sudden development could trigger a drier pattern and negatively impact yields.
Grain markets face stiff headwinds heading into 2025. Yet, just when hope seems lost, an unexpected shift can spark positive momentum. No one can predict the future.
Yet what happens to the grain market if USDA lowers yields, U.S. exports remain strong or South American weather turns dry? Any of these factors could be the catalyst that drives prices higher.
The key is having a plan in place to capitalize on these potential opportunities. Eliminate reliance on “hope,” build a solid strategy, and be ready to execute sales as opportunities arise.
If you have questions about these insights or need help developing your marketing strategy, contact me directly at 314-626-4019 or reach out to the AgMarket.Net team at 844-4-AG-MRKT.
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