Well, here we are. The calendar year will finally time itself out in a few days then we’ll get to look forward to all the new good things that are coming in 2025. At least that’s what I’m hoping for. In essence, when I write the year 2025, sometimes I have to look out the window. It all seemed so science fiction to me.
It is hard for many of us to imagine that it was only 25 years ago that we turn the century. It seems like I spent a lifetime wondering what that was like and of course it seems like it’s been a lifetime since that happened. You might laugh now when you think about it, but I wrote a column about Y2K in late 1999. For those of you who might have forgot that was the problem with the inability of computers to switch over to the year 2000. There was lots of doom and gloom predicted but of course nothing ever happened
There is nothing quite like that going into 2025. However, let’s get a gut check on where we are now in our agricultural markets. We’ve got the March 2025 corn futures sitting at $4.53 a bushel with the December 2025 contract currently coming in at $4.41 a bushel. On the soybean side of the ledger, we have March soybeans coming in at $9.97 a bushel and the November 2025 soybean futures coming in at $10.09 a bushel. Let’s just say as we look into 2025, we’re hoping for much better prices.
2024 was certainly a year of lower grain prices. In fact, seasonal rallies were almost nonexistent, so it has been difficult to market grain. We had near record crops in the United States and down in Brazil weather has been benign. We are looking to a big crop there which continually weighs on our soybean market. Harvest will be ramping up in late January in some locations in Brazil so we might be losing it on the timing of a hot and dry calamity to send prices higher. The cure for low prices can be low prices but it will take some type of production malady on the supply side to force the issue.
On the global stage there is much to think about as we head into 2025. At the moment it’s hard to say what will happen especially with geopolitical events in Washington DC possibly coming together later in January to put tariffs on Canadian goods. There have also been musings from the American President elect about taking back the Panama Canal and purchasing Greenland. From a Canadian perspective, all of this is troubling. Our cash grain and livestock markets will be affected. Indirect actions from players like China will surely also impact our prices. However, it is hard to know what may happen especially when you’re dealing with an unconventional incoming American President.
Aside from the geopolitics on this side of the world we also have the ongoing war in Russia and Ukraine. I think it is become conventional wisdom that our wheat market has all of this ”white hot war news” strictly dialed in to market activity. At least that’s the way it seems with bombs dropping every day on that side of the world. Russia’s wheat crop seems to be much lower both in production and potential as we go into 2025. Needless to say, the wheat market yawns. I see more of the same as we go into 2025, but let’s at least hope all of the killing stops.
On a global basis all of this is taking place at a time grain production is quite high. In fact, many of you will make an argument to me that some of these problems should result in much higher grain futures prices. Keep in mind, that will happen someday but maybe at the moment at least in Ontario and Quebec it’s better to focus on our cash price opportunities brought to us by a much lower Canadian dollar.
Simply put, a lower Canadian dollar boosts Ontario and Quebec cash soybean and wheat prices. It also does it for corn but at a lesser level. At the present time the Canadian dollar is fluttering between 69 and 70 cents US. We have an ascendant American economy fueled by the Trump election which is making the American dollar go higher. This is why the Canadian dollar has been so anemic over the last few weeks. It also doesn’t help that our politics are in a bit of a shambles these days. The federal government will likely be defeated on the 1st non confidence motion which comes to the house after January 27th when parliament returns. It only adds to the uncertainty and the weakness in the Canadian dollar.
So, are better times ahead in 2025? I hope so and I think so, but then again it could just be sideways. I say that because we’ve been pretty low on those grain market prices over the last several months and our supply luck may change in the fields in 2025. At the same time, there certainly is an argument for sideways. There’s just so much grain around everywhere. Add some new technology to the mix in 2025 and we might even have some excitement. We can only hope for better things ahead.