I’ve spent most of the last week land leveling some of my wheat ground getting ready for crops in 2025. I plant corn and soybeans into a stale seed bed and land leveling is a very necessary part of that. Interestingly enough, this year has been terrible for getting it dry enough for primary tillage and land leveling. However, the forecast seems to have changed. for the next week or so we’re looking at dry and warm weather, perfect for getting those late soybeans to physiological maturity.
I’m never quite sure how it works because I look at everything from an agricultural economic lens. I leave the crop science to the crop scientists. However, a two or three-week delay in planting of soybeans in southwestern Ontario does not necessarily mean you’ll have the same delay for fall harvest. It seems day length has something to do with shutting soybeans down this time of year. In any case, soybeans that were planted earlier in the field are bright yellow while the replant is emerald, green. I’ll take that 28° heat that is being predicted for this week.
Over the last several weeks there has been similar dry weather across much of the American corn belt. That had some analysts thinking that maybe we would see some reduction in this humongous crop that’s coming off the fields in the United States. Today, we got the latest WASDE report from the USDA. The USDA actually raised the corn yield to 183.6 bushels per acre pushing total production to 15.186. The yield is a record but not the total production as we had more corn last year. At the same time the USDA pegged soybean yield the same as last month at 53.2 bushels per acre. This maintained production at 4.586 billion bushels.
None of this was really too much of a surprise although corn was slightly above what many analysts had thought. Think about it for a minute what 183.2 bushels per acre means. That is spread across 82.7 million acres which is expected to be harvested. Think about the logistics of moving that much corn. It is truly amazing when you think about it but remember it’s just a huge crop. This comes on top of a record crop we had last year so there does not seem to be any let up to “big supply”.
What is amazing also is that we have “big demand”. That consists of total usage projected this year at 14.965 billion bushels. Just think about that for a minute. We are left with an ending stock projected for old crop at 1.812 billion bushels and new crop at 2.057 billion bushels. In other words, it’s almost like we need big supply because demand has grown so much. It wouldn’t take much of a production calamity in future years to change that paradigm where price would need to rise to ration demand.
On the soybean side of the ledger nothing much changed. Yes, soybeans are the great liars, but it looks like this year they’re telling a fib to the upside. I have a very difficult time reaching 53.2 bushels per acre like our American friends. That slow start of mine and waterlogged year certainly didn’t help. However, we all know that Brazilian production machine is ramping up again to start planting next month. It seems like there are soybeans everywhere.
The question is what happens next on the price front? If you look at the charts some people would make the argument that the lows are in as harvest pressure starts to ramp up in the United States. Here in Ontario, we’ve seen about a 40 cent rise in the price of soybeans and a 20 cent rise in the price of corn since the last week of August. The Canadian dollar still fluttering around in the 73-cent level is helping. The Bank of Canada reducing interest rates last week helped as well.
In that same timeline we actually had wheat join the party with about a $0.50/ bushel rise in prices since the end of August. The wheat market continues to be a dichotomy with problems almost everywhere but production as well. The risks inherent in growing the crop are almost endless and that’s something Ontario producers will be struggling with as they get wheat cleaned to put it in the ground in the next few weeks. Growing wheat in Ontario at $6.30 a bushel is not for the faint of heart.
Is hope on the way? Have we turned the corner with the lows in the market already in? Or will there be surprises ahead? The answer to these questions is always blowing in the wind but the USDA did solidify what we really do know about this year. The big American crop is huge, almost as huge as last year and this is the reason prices are doing what they’re doing. Whether a calamity takes place in Brazilian production fields ahead or next year in North America eventually it will even out. The hard part is doing your marketing through all these tumultuous events. Being in the game is part of it. Someday, our marketing dynamics will all change for the positive.