Declining crop prices have been challenging for Canada’s grains and oilseeds producers. But a better outlook for Eastern Canadian yields, compared to our January forecasts, points to positive margins there. In the West, a lot of regional variation in estimated yields suggests our January forecast of weak margins is largely unchanged.
Corn prices to stabilize, wheat prices to rise slightly and soy prices to fall in 2024-25 MY
That improved forecast for margins won’t come from better prices for the year, however. FCC Economics’ price forecast has generally declined further for major crops since January. Corn prices will remain close to the bottom seen in the last four years as will wheat. Soybeans will continue falling from their high in February 2023 throughout the rest of 2024 (Figure 1).
Figure 1: Crop prices in 2024 pressured by cooling global demand, bountiful stocks
Source: Farm Product Price Index and FCC calculations
Those prices reflect expectations of global supplies. In its latest WASDE report, the USDA raised its forecast for 2024-25 global production and ending stocks of wheat, based on improved conditions in June in numerous countries including Canada and the U.S. Nonetheless, ending stocks are lower than they were in the 2022-23 and 2023-24 crop years, which is helping to keep wheat prices from plunging further. Global soy production is forecasted to grow 7% year-over-year (YoY) this marketing year, with ending stocks forecasted to be boosted by a significant 19%. Corn production and ending stocks are expected to be in line with 2023 levels, with reductions in Russia after a period of unfavourable weather. A big wildcard in these estimates will be the final tallies of crops in the Black Sea region. Both Russia and Ukraine have struggled with extreme moisture deficits, and any underperformance will be bullish for prices.
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