Review of Agriculture Commodity Prices - October 2022

Review of Agriculture Commodity Prices – October 2022

Corn

The cash price for Corn as measured by the United States National Cash Corn price rallied 2.68% in October and is up 26% since October 31, 2021.

The biggest impact in the corn market is weather and trade issues. 

Rain come to Argentina wheat corps – there has not been significant rainfall in their main agriculture regions since May of this year.[1]  Argentina has experienced its slowest corn planted in 6 years due to drought.  [2] 

The European Union cut corn forecasted yield – the crop is expected at 6.34 tonnes per hectare down from the 6.39 tonnes per hectare expected in September.  [3]

Mexico will proceed with the GMO corn ban and is seeking to buy corn form international markets.[4]  The United States has been Mexica’s top largest supplier of grain in the past. 

Soybeans

The cash price for Soybeans as measured by the National Cash Soybean price rallied 4.13% in October and is up 15% since October 31, 2021.

The biggest impact in the soybean market is weather.

Heavy rains in portions on Brazil’s southern soybean growing area which slowed down planting – moisture is welcome after last years drought.[5]  Chinas September soybean imports jumped 12% from a year earlier to 7.72 million tonnes which reverses many months of lower imports.  [6] 

Wheat

The price of Cash Wheat in the United States fell 4.98% in October and is up 20% since October 31, 2021.

The biggest issue in the wheat market is geopolicial issues and weather.

The United Nations, Turkey and Ukraine push ahead with the Black Sea grain deal despite Russian pullout.  There was a plan to have 16 ships move forward from ports on October 31.[7]

Argentina’s wheat harvest is cut due to drought – the estimated 2022/23 wheat harvest will come in at 13.7 million tonnes down form a previous forecast of 15 million tonnes.[8]  Further to this, over 80% of the United states face dry condition, the largest portion of the county facing dry conditions this century, which leads to concern for the winter wheat crop.[9]  Finally, Australia wheat crop equity is at risk due to heavy rains – downgrade to Australian wheat will deepen concerns over global wheat supplies. 

Russia has st a grain export quota of  25.5 million tonnes for February 15 to June 30^th of 2023 (Russia is the largest supplier of wheat to Africa and the Middle East).[10]  Dry soil in Russia’s south increases risk for 2023 grain crop – sowing of wheat is delayed verses a year ago.[11]

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