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Ag Marketing IQ: Three factors could spark a run up in grain prices on the 2025 futures market: USDA lowers yield numbers, exports outpace expectations and dry weather damps down yields in South America.

Jason Meyer, Hedging strategist

December 19, 2024

3 Min Read
Bull figurine with market chart in background
Getty Images/panida wijitpanya

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.

Related:Will Brazil get its corn planted?

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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.

Related:There’s gold in that farmland!

The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. AgMarket.Net is the Farm Division of John Stewart and Associates (JSA) based out of St Joe, MO and all futures and options trades are cleared through RJO’Brien in Chicago IL. This material has been prepared by an agent of JSA or a third party and is, or is in the nature of, a solicitation. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading information and advice is based on information taken from 3rd party sources that are believed to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. The services provided by JSA may not be available in all jurisdictions. It is possible that the country in which you are a resident prohibits us from opening and maintaining an account for you.

Related:Raise a cheer for volatility

About the Author

Jason Meyer

Hedging strategist, AgMarket.Net

Jason grew up on a small family farm operation in Northeast Iowa. He earned his Series 3 Brokerage license before he graduated from Northwestern College in 2001. Jason’s career in agriculture started out at the Chicago Board of Trade as a retail broker for Walsh Trading. Seeing the need to learn more about the cash side of the business, Jason spent 18 months in Bloomington, Illinois with Advance Trading to hone his skills in cash-grain trading. Jason put these skills to test as a grain originator for the Dodge City Coop for 3 years. This experience allowed him to become a grain merchandiser for Farmers Coop Elevator in Beresford, S.D.

After 5 years, an opportunity to grow as a leader presented itself when Jason became the Vice President of Grain for Western Iowa Coop in Hornick, IA (a position held until a merger with NEW Cooperative in 2015).

With a growing young family, Jason decided to stay put and began his most recent work as a grain originator/merchandiser for CVA in Hinton, Iowa. Throughout his stops in the cooperative world, Jason always maintained his Series 3 license as he saw the need to help the farmer navigate the futures and options world. When the opportunity presented itself to join a team dedicated to helping the farmer in both brokerage and consulting, Jason was excited for the chance to work in a more direct role with the producer.

Jason has resided in Sioux City since 2012 raising 3 children who are active in baseball, volleyball, dance and hockey.  Jason is currently a board member for the Regina Roth Applied Agriculture and Food Studies Program for Morningside University. He also closely works with the Iowa Corn Growers Association to help support agriculture as he is a graduate of I LEAD Class 9. In his free time, Jason enjoys watching his kids participate in sports, watching sports and documentaries, trying new foods and traveling.

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