Oh, my goodness, how did we get here? We’re into the last few days of 2023 and just writing that seems to be a bit of science fiction especially when you been at it as long as I have. However, it is that time of year again when we reflect and also look into the new year.  The world in 2023 is troubled, just like it is every year but as we look into 2024, we’re hoping for better things. How that will translate into our grain pricing world might be a different matter.

So, what’s it going to be? Can we look forward into 2024 with any lessons from 2023 which might push grain prices higher? Are the forces that are currently manifesting themselves in the production fields of South America creating a perfect storm for oversupply in this market?  How will production be in North America this year and specifically in Ontario and Quebec?  Lastly, will grain prices be higher next year at this time than they are now?

It is no secret as we end 2023 that Ontario grain prices were much higher a year ago then they are today.  Cash prices for corn in Ontario today are approximately $5.40 a bushel. This is based on a March futures price of $4.74 a bushel.  Last year we had cash prices in Ontario of $8 a bushel for corn based on a futures price which was approximately $6.21 a bushel. This is the reality of the situation and of course we got here with our eyes wide open. Big supply won the day, and it is still winning in the dying days of 2023.

Last year at this time the soybean futures price was approximately $13.96 a bushel, with cash levels in Ontario at $19/bushel.  Cash soybeans in the last few days of December are approximately $16 a bushel with the nearby futures month of $13.05.  That pesky Canadian dollar has risen lately up to.7563 cents US higher than a year ago where we were hovering between 73 cents US.  Needless to say, we’ve been fluttering between those two levels all year.

For those of you grumbling about grain prices I realize that we all hope that they will be higher. That not only makes us feel better, but it has a tangible effect on our bottom lines as well. We might get some clue on what USDA thinks on January 12th when they release their final official look at what yields were in the United States last year.

As it is, USDA is projecting 2.131 billion bushels of corn ending stocks for this crop year at the same time they have pegged soybean ending stocks at 245 million bushels. Both of these numbers are comfortable levels for prices to be maintained at current levels. It is also an admission that big supply is winning, and we will need some type of intervention from some other force to push them higher. If we go into this year and get a similar type of crop that we had last year these ending stocks numbers will be even bigger than they are now. However, we know that there’s lots of risks between now and then. The key will be to catch those marketing opportunities along the way.

I’ve always said that when we market our crops, we never look in the rear-view mirror. I still believe that but for the moment let’s look back on to the marketing opportunities that were had in 2023.  If you look at the March 2024 futures contract over the period of a year you will see that our best opportunities to price this corn was a year ago or before along with a big price spike on June 22nd. Historically, these seasonal trends have always been good for pricing corn.

Soybeans were a bit of a different animal in 2023 reaching their low approximately $11.59 on May 31st but bouncing back and fluttering between $13 and $14.00 most of the rest of the year.  I don’t know what we can take back from that other than the fact that soybeans love rain in August, and they seem to have a little bit more resiliency than corn prices overtime. Part of this might have to do with the huge South American crops that are constantly in the background.

For wheat prices I would say pick your poison. I have heard some wheat buyers tell me that one of the worst things that has happened was the Russian Ukraine war and the price spike that put wheat up to about $15 a bushel in Ontario.  That was an anomaly, but it is burned in our memory and of course we’d all like it again. Needless to say, wheat prices are half of that burdened by surpluses around the world. For 2024, this is unlikely to change.

It’s not the best outlook for grain features prices, but of course in Ontario and Quebec we also have to manage our grain price risk against the value of the Canadian dollar. As we look into 2024 there are some economists that are predicting recession in Canada but at the same time there aren’t too many that think the Bank of Canada will continually raise interest rates. It is hard to know what the Canadian dollar will do but if we ever get back up over the $0.80 US level that will have a dampening effect on Ontario and Quebec cash grain prices. You can make an argument, that many Ontario and Quebec farmers are satisfied with the dollar at the $0.75 US level.

So as 2023 slips through our grasp, it’s time to move on. For many of us especially in Ontario and Quebec it represented very good crops with great yields something we will take year after year. The only thing that we can be sure of, is that we can be quite sure of anything at all. There will be surprises in 2024 and there will surely be surprises in grain prices too. The hard part will be capturing those elusive marketing opportunities.