Glacier FarmMedia – Ahead of the United States Department of Agriculture Outlook Forum, analyst Bryan Strommen of Progressive Ag in Fargo, N.D. painted a rather bearish picture for the commodity markets. However, he noted that prices might not go much lower given the commodities have hit contract lows.
“Corn acres are to be down a couple of million from last year and soybean acres are to be up, with larger stocks [for both] as well,” Strommen said.
He pegged U.S. corn acres for 2024/25 at 91 million to 92 million, with soybeans around 87 million. He noted that the planted wheat area was likely to be lower as well at about 40 million acres.
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Ending stocks are expected to increase for the most part during the coming crop year. Strommen placed those for corn at about 2.30 billion to 2.40 billion bushels, higher than the USDA’s estimate of 2.17 billion for the 2023/24 crop. For soybeans, the carryover was projected to be 350 million to 400 million bushels compared to this year’s 315 million. The carryout for wheat was projected to go either way at 600 million to 700 million bushels, compared to the 658 million for 2023/24.
Strommen said prices for the three commodities might not continue to grind lower, pointing out “we’re at contract lows pretty early in the season.”
“We’ll have some acre competition. Usually we have some kind of a spring rally,” he continued, noting the U.S. dollar was at or near three month highs which was a major factor in driving prices lower.
Another major factor Strommen pointed to were the very large short positions in corn and wheat, and soybeans to a lesser extent, held by the speculative funds.
“They need some positive news to their minds and reverse their trend to the top side,” he stated.
— Glen Hallick reports for MarketsFarm from Winnipeg.
