That would also be good for Canadian grain and oilseed prices if it happens.

The highest corn prices so far this year occurred during the first two days of January, and they have been heading lower since.

The odds of those prices remaining that high through spring is slim based on data compiled from the last couple of decades, according to Ed Usset, grain marketing economist with the University of Minnesota.

“In 16 of 20 years the corn market found a way to take out those highs set in January,” he told delegates attending the 2024 Commodity Classic.

Soybean prices are less reliable than corn, but there is also a good chance that market will take out the January high. It has done so in 17 of the last 20 years.

So, is corn heading back to US$5 per bushel?

“I don’t guarantee anything, but I think this is strong evidence that it could happen,” said Usset.

He has “no clue” what could cause the rally. He could offer up 10 reasons and it would be the 11th that would trigger the bull run.

But the upshot is that farmers with unpriced corn or soybeans in their bins might want to hold on a little longer and wait for better prices this spring.

He also thinks there is reason to be long-term bullish on grains and oilseeds because of the exploding renewable diesel industry.

Sixteen proposed new U.S. soybean crush plants will create more than 600 million bushels of new annual demand for the crop.

“I know things feel very bearish right now, but I like to think there is potential for this to create some turmoil in the market,” said Usset.

“This is an echo of the boom that occurred 15 years ago in the ethanol industry.”

That boom bolstered the price of corn, which in turn elevated prices for soybeans, wheat and just about every other crop farmers grow.

That begs the question — should farmers change their marketing strategy once the return to a bull markets arrives?

The short answer is no, said Usset.

He is a firm believer in growers knowing their cost of production and pricing 80 percent of their grain with pre- and post-harvest marketing efforts rather than accepting the harvest price.

Iowa corn growers who used that strategy achieved an average 37 cent per bu. premium over growers who took the harvest price between 1989 and 2002.

“That’s 37 cents a bu. on every bushel of corn produced over a 34-year period,” said Usset.

“You can see the advantage of pulling together pre- and post-harvest marketing.”

For soybeans, the advantage was nearly $1 per bu. and for hard red spring wheat in the Red River Valley it was 27 cents.

Usset analyzed the same data during the “golden age” of the ethanol boom between 2007 and 2013, comparing it to the seven-year periods before and after the boom.

The average price of Iowa corn during the seven-year boom was higher than the maximum price in the seven-years before and after the boom.

“That’s some good times,” he said.

The important thing to note is that the grower who used pre- and post-harvest marketing strategies outperformed those who took the harvest price in all three of those periods, said Usset.

—Sean Pratt writes for the Western Producer.

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He is not alone.

Farmers across the United States are kicking themselves for putting off corn sales after fields dried up in May and June, fueling expectations for higher prices and smaller harvests. Instead, prices tanked as rains saved the crop. The size and speed of the price collapse stung farmers and left their storage bins stuffed with record amounts of corn.

The steepest market downturn in a decade in 2023 has extended into 2024, hurting the U.S. rural economy. Two years of high prices and tight crop supplies spurred by unfavorable global weather and disruption from the Ukraine war have been quickly reversed.

Record-large harvests in the United States and Brazil, increased competition for U.S. grain exports, and limited domestic demand led to hefty amounts of corn locked away in storage, pushing U.S. corn prices to their lowest level since November 2020 on Wednesday.

Corn is the world’s most traded commodity crop and often sets the tone for other crops. Soybeans, too, plummeted to their lowest prices in more than three years in February.

Ten farmers, economists and market analysts said U.S. growers miscalculated when they held on to corn rather than booking sales. The “store and ignore” strategy of waiting for higher prices has not paid off, leaving some farmers cutting back purchases of pricey equipment and planting less corn. The interviews also demonstrate the tricky decisions farmers face when determining when to sell in the face of potential crop losses.

Corn futures prices Cv1 that approached $6.30 a bushel in June have since tumbled to $4.10, after U.S. farmers ultimately produced record crop yields.

“I wish I sold a lot more,” Henebry said.

U.S. growers held a whopping 7.83 billion bushels of corn in storage bins on their farms as of Dec. 1, the most ever for that date and up 16 per cent from a nine-year low in December 2022, U.S. government data show. Globally, leftover inventories are projected to reach a five-year high by September after accounting for all the corn used to feed livestock, make biofuels and other purposes.

Henebry said he still has about 40 per cent of his 2023 harvest in storage, including 30,000 bushels on his farm in central Illinois. He is paying 3 to 4 cents per bushel a month to keep another 30,000 bushels at a local grain elevator. In a normal year, he would not have any still stored there, he said.

Before prices plunged last summer, Henebry said he sold some corn for $5.50 to $5.70 per bushel and then for as much as $6.21 per bushel delivered to the grain elevator. He held off on further sales because he was counting on poor weather to reduce production and boost prices.

Prices tumbled, though, and Henebry said he sold corn in December for $4.60 per bushel. He wishes he would have unloaded even more at that price.

Prices will come under renewed pressure as farmers do sell the grain they have in storage, analysts said.

“Any sort of little rally, there’s going to be a lot of corn sold,” said Henebry.

‘I’ll just give up’

Fred Huddlestun, a farmer in Yale, Illinois, said he still had his entire 2023 corn harvest in storage last month: about 39,000 bushels at an elevator and 25,000 bushels at home. Prices never reached targets he set to make sales last year, even as he lowered them.

Huddlestun could have earned roughly $360,000 if he had struck deals to sell 64,000 bushels just after Easter; $382,000 around Father’s Day in June; and $307,000 on Halloween, based on Chicago Board of Trade corn futures that represented last autumn’s crop. At current prices, his grain is worth about $263,000. Futures and cash prices often differ by a few cents.

“I kept thinking the market would go up,” Huddlestun said. “I’ll just give up eventually and start selling if nothing happens.”

Huddlestun said he should have sold around $5.50 a bushel. Though all operations are different, breakeven prices for corn growers in central Illinois were about $5.27 a bushel in 2023, including costs for land and other expenses, according to University of Illinois estimates.

Farmers have the space to squirrel away crops after increasing their storage capacity by 24 per cent over the last two decades to 13.6 billion bushels. Storing grain gives farmers more control over when and how they sell, to avoid prices that are typically low at harvest time and to best take advantage of spikes in futures. At grain elevators and other commercial handlers, off-farm storage capacity has increased by 40 per cent to 11.9 billion bushels over the past 20 years, according to U.S. government data.

High interest rates make storage more costly because farmers’ crops are tied up in bins rather than sold to reduce debt, economists said.

In southern Illinois, the second biggest corn-producing state, farmers could actually lose up to $160 an acre growing corn this year, based on corn prices and the cost of production, University of Illinois economists said in a January report. Two years ago, profits reached about $340 an acre.

Such expected losses are rippling through rural America. Net farm income in 2024 is projected to suffer the largest year-to-year dollar decrease in history, the American Farm Bureau Federation, an industry group, said in a report this month.

Deere & Co, the world’s largest farm equipment maker, expects sales of large agricultural equipment to decline 20 per cent this year, due to lower commodity prices and high interest rates.

‘Plenty of corn’

In Wamego, Kansas, Glenn Brunkow, a fifth-generation crop and livestock farmer, plans to delay upgrades to machinery and may try to repair equipment himself, rather than paying a dealership.

“We’re tightening expenses as much as we can,” he said. “We’re trying to limp through putting off some expansion with the livestock, just trying to limp by.”

Early forecasts show U.S. farmers are likely to cut back on corn planting and favor soybeans in 2024. They may struggle to turn a profit with either crop.

Brunkow said he plans to forgo corn planting entirely and grow some sorghum, which requires less fertilizer and has less expensive seeds than corn. Sorghum can be used to make ethanol, feed livestock or be exported to China to make baiju liquor.

Years ago, Brunkow gave up on growing sorghum because it produces lower yields and is difficult to dry at harvest time.

Now, “the economics just are better,” he said. “You’re going to lose less money.”

Analysts do not expect a major bump in demand to draw down corn stockpiles. U.S. exports of agricultural and related products fell 10 per cent by value in 2023 to a three-year low, as plentiful supplies from Brazil and elsewhere challenged U.S. export sales.

Demand from the U.S. meat industry, which feeds corn to livestock, is limited as pig farmers face lackluster pork demand while cattle ranchers slashed their herds due to drought in the Great Plains.

Biofuel demand, which typically accounts for about one-third of U.S. corn production, also worries Rod Weinzierl, executive director of the Illinois Corn Growers Association, as Americans buy more electric vehicles.

“This year every fork in the road has been bearish,” said Matt Wiegand, commodity broker for risk management firm FuturesOne in Nebraska.

—Additional reporting for Reuters by Julie Ingwersen in Chicago.

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The attaché pegged Argentina’s 2023/24 wheat harvest at 15.40 million tonnes. While thanks to El Nino rains it was a significant improvement over the drought-stricken crop of 12 million tonnes the year before, it was well short of the 22.15 million harvested in 2021/22.

Wheat exports also dramatically improved, going from 3.66 million tonnes in 2022/23 to now 10.20 million, according to the Buenos Aires desk. But again, short of the 16 million tonnes in 2021/22. Meanwhile, 2023/24 ending stocks dropped to 1.62 million tonnes from the 3.32 million the previous year. Those for 2021/22 were 1.93 million tonnes.

The USDA attaché placed Argentina’s 2023/24 corn production at 57 million tonnes, up sharply from the 35 million the previous year due to the El Nino. This year’s output also exceeded the 52 million in 2021/22.

The country’s corn exports tallied 41 million tonnes in 2023/24 compared to the 23.40 million in 2022/23, but short of the 38.85 million in 2021/22.

The attaché forecast corn ending stocks for 2023/24 at 2.62 million tonnes, from the previous year’s 1.41 million, but still lower than the 4.30 million in 2021/22.

Going into the USDA’s World Agricultural Supply and Demand Estimates on Feb. 8, the average trade guess for Argentina’s corn crop came in at 55.59 million tonnes, up 590,000 from the department’s January report. However, there has been some consternation within the markets that the recent hot spell in Argentina might have eroded potential corn yields with the crop being in a critical stage of its development.

— Glen Hallick reports for MarketsFarm from Winnipeg. 

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As of Dec. 5, 2023, the net managed money short position in canola futures came in at 94,912 (6,508 long/101,420 short), which compares with 81,770 from the previous week.

Open interest in the canola market came in at 271,839 contracts, which was up by 15,276 on the week.

At the Chicago Board of Trade, a combination of long liquidation and new shorts going on the books saw the net long in soybeans fall to roughly 37,700 from 71,100 the previous week.

Meanwhile, corn traders were on the other side of the market, with the net short there falling by about 55,000 contracts to come in at about 156,800 contracts.

In wheat, the Chicago soft wheat market reported a net short position of about 100,500 contracts. The net short in Kansas City hard red winter wheat came in at roughly 38,400 contracts. In Minneapolis spring wheat, managed money traders were holding a net short of around 27,100 contracts.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

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“We’re getting some pressure in these markets because of the harvest pace that’s going on for the U.S. producer. So farmers are out there, they’re getting their work done,” said Steve Georgy, president of Allendale Inc.

While the soybean harvest is behind schedule compared to years past, yields are looking good still. The market has also seen some pressure from the ongoing trade war between the United States and China. Some large sales of soybeans were also cancelled during the last week.

“All that compiled together is what’s keeping beans about where they’re at. November beans around US$8.50 a bushel is kind of a happy spot. If we go much below that we see demand start to kick in…but much above that you’ve got producers selling and able to take advantage of a little bit higher prices,” Georgy said.

The market should be choppy for the rest of the week though as traders adjust their positions before the November contract expires.

“Overall harvest is going to keep any kind of big rally from happening at this point unless we see something done with trade,” Georgy said.

The CBOT corn market is currently stuck in a sideways pattern with the lows already priced in, according to Georgy. He expects the market to chop around at the US$3.70 per bushel mark.

“Any time you get a big bounce for corn or you see that move higher it’s met with selling because farmers need to find a home for (the crop),” Georgy said. The U.S. corn harvest is just over 50 per cent complete and farmers could be looking to sell some of the crop as it comes off the combine.

The corn market though could find itself being influenced by the wheat market. The CBOT wheat market is currently range bound at around the US$5 per bushel mark and if the export pace picks up Georgy thinks that it could move higher.

“If we can get the wheat market to jump higher that may influence that corn to push a little bit higher as well,” he said.

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Some farmers on social media have even spray-painted their corn on Friday and checked it on Monday. Invariably, there’s a couple of inches of new growth as that corn plant drives itself to tassel on its way to yielding a bountiful harvest.

When it all works, it’s a beautiful thing, (although if weather doesn’t co-operate there can be some bumps on the road!)

Needless to say, corn production in Canada continues to be resilient.

In 2018 corn is mainly used for ethanol, feed and food and industrial uses in Ontario, Quebec and Manitoba. For instance, in the East, approximately a third of Ontario’s crop goes to ethanol production at the different plants throughout the province.

Ontario has had a five per cent ethanol mandate in its gasoline for several years now and is currently moving toward a 10 per cent mandate, which will require even more ethanol. The rest of the corn crop goes into the feed and residual market, which includes DDGs (dry distillers grains). Corn is exported and imported under some circumstances. It’s vital to the health of the Ontario and Quebec economy.

In 2018 according to Statistics Canada, Ontario will produce 2.2 million acres and Quebec will produce 953,000 acres of corn. This represents an increase of 1.7 per cent and 1.5 per cent in corn acreage in Ontario and Quebec, respectively, over 2017.

In 2018 Manitoba planted 428,000 acres of corn, which represents an increase of 4.4 per cent over its 2017 acreage. With Canada’s northern climate, it will always be somewhat of a challenge to push these corn acres upward. However, there is corn acreage across Saskatchewan, Alberta and British Columbia. There is also corn production on a smaller scale in Prince Edward Island, New Brunswick and Nova Scotia.

The challenge for Canadian corn farmers is to produce the crop profitably and to find their sweet spot within the greater global corn market. Corn is traded reasonably freely around the world so it is able to move in and out of Canada depending on the price incentive.

Ontario and Quebec corn producers have enjoyed tariff-free access to the European Union since the adoption of the CETA agreement in 2017. This was also enhanced because the Europeans imposed tariffs on U.S. corn going into Europe after the Americans applied steel and aluminum tariffs on the EU earlier in 2018. It was a bit of an anomaly in 2017-18, but realistically it’s just another example of the myriad market factors which affect the movement and the price of corn.

Corn is grown and exported from Ukraine, Argentina and Brazil, but the world’s biggest producer, the United States, largely determines the overall crop price. The cash value for corn in Ontario and Quebec is largely founded on the corn futures price originating out of the Chicago Mercantile Exchange, adjusted by a “basis value.”

This basis value can be positive or negative versus the respective futures month. For instance, the new crop price of corn in Chatham, Ont., for August 11, 2018, was C$4.72. This was calculated based on a December futures value of $3.72 cents plus $1 basis value. Basis is the value which determines when grain is moved, bought or sold. It is a reflection of local supply and demand in Canadian dollar terms.

The road to determining the cash price for corn in Ontario, Quebec and Manitoba is always a long and winding one. Corn conditions and weather variables in the United States are always the major factor.

What makes 2018 very different compared to other years is that the American farmer actually planted less corn in 2018 than soybeans. This was the second time in history it has happened. In 2018 the USDA has projected U.S. corn acreage to be 89.1 million acres, with soybeans surpassing it at 89.6 million.

As of August 10, when the USDA released its first “in field” survey of corn conditions for the 2018 crop year, the December futures price for corn is $3.71. Earlier in the crop year on May 24, the December futures price reached its high of $4.29. This 58-cent decline in the futures price for corn was related to multiple factors affecting grain markets in 2018. One of those factors is the benign weather that has nurtured the corn crop throughout the summer of 2018, benefiting U.S. corn production.

On August 10, the USDA predicted U.S. domestic national corn yield was at a record level of 178.4 bushels per acre. This was greater than 2017, when yield was 176.6 bushels per acre and greater than the 174 estimated by the USDA previously in 2018. The market was also burdened by the 1.68 billion bushels, an increase of 132 million bushels from the month before. Clearly, these were bearish numbers tempering corn futures prices and futures expectations.

2018 crop weather has been good for corn production and the resultant price drop could almost be telegraphed under these conditions. However, what is different in 2018 is the effect of geopolitics on the price of grain.

With the American move to impose steel and aluminum tariffs on China earlier in the summer there was always a spectre of Chinese retaliation for such a move. That came in early July when the Chinese imposed a 25 per cent tariff on American soybean imports into China.

This was a major geopolitical reason for the $2 drop in the price of soybeans over June and July 2018. Corn prices also fell to some extent in sympathy with that move. The resultant “trade war” atmosphere has led to widespread bearishness in the grain complex.

Changing that phenomena can come quickly or not at all. When pricing grain, it’s very difficult to predict.

The challenge for Canadian corn producers is to price their corn profitably in this environment. Earlier in 2018, $5 new crop pricing was available and surely there was much contracted at that. Basis values for corn fluctuate to some extent based on the seasonal nature of the corn market in Eastern Canada, and to a lesser extent, the value of the Canadian dollar.

Historically, we’ve had too much corn at harvest time, which has been exported out to the United States at fire sale prices only to be imported back in in late spring or early summer. This caused a harvest time low with basis values improving later. However, it is changing greatly as the export market to Europe has gotten better because of CETA.

Also, too, Eastern Ontario basis has traditionally been much higher than Southwestern Ontario. In 2018, this is not as apparent. Typically, as you move east into Quebec, flat pricing of corn becomes more popular. It also can become less transparent. Knowing your local market conditions becomes more important.

Managing all of these market factors can be daunting. Standing pricing orders where farmers can set a cash price with their buyer is one way to manage the risk. Futures can be volatile as can cash basis. Often this volatility happens so quickly, it’s hard to nail down. However, standing pricing orders for corn resting there can get that done. With so many factors swirling within the corn market for 2018 and 2019, it’s a good strategy to employ.

This article was originally published in the Sept. 2018 issue of the Corn Guide.

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Now, as we look out into 2018, corn growers have a myriad of corn market factors to consider.

Corn growers are caught in a vicious cycle. With burgeoning new technologies embedded in every corn seed, there is a constant yield improvement, which is increasingly turning into a default. Some might argue that corn yields are going up exponentially.

Importantly, this phenomenon is true not only in Canada and the United States. It’s also taking place around the world, and it has led to a corn market of ever-increasing supply that in turn drives down corn futures prices.

Of course, we’ve seen vicious cycles in agriculture before, including the kind that leave us asking: What has to come first, the chicken or the egg? Does corn supply have to collapse, or can we hope the global demand will grow even faster?

Regardless, as we move into 2018, we’re getting a fairly clear picture of what we will be facing. The challenge for corn farmers will be to find marketing opportunities despite this cycle.

We need to ask ourselves a few questions. How much corn will be planted in the United States and in Canada, especially in Ontario and Quebec in 2018? Will there be a shift away from corn to soybeans? Will the corn futures price remain in a low range between $3.38 to $4? Will corn demand continue to grow within this cheaper price environment? Is there a black swan event looming on the horizon, which may send corn futures prices much higher?

In the middle of winter, estimating and musing about the 2018 corn crop remains only hypothetical. However, a look back at the 2017 growing season gives us some indication of where the market may be heading.

During 2017, American farmers planted 90.4 million acres of corn, harvesting 83.1 million acres according to the November 2017 USDA report. At the start of the 2017 growing season there was much conjecture within the market that higher soybean futures prices might actually lead to the United States planting more soybeans acres than corn. However, this did not happen; soybean acres came in at 89.5 million acres planted.

The pricing scenario going into winter of 2018 is similar. For example, November 2018 soybeans at the end of November 2017 were $10, while December 2018 corn futures were $3.83. The U.S. cash price using DTN’s national corn index on December 1 was approximately $3 per bushel, with many sub-$3 prices across much of the corn belt. Soybean cash prices were $9.19 per bushel.

How these ratios will affect planting intentions in the spring of 2018 is anybody’s guess. However, like 2017, there is a signal to plant soybeans over corn. Whether it manifests itself in similar corn acres in 2018 will be a major factor in corn futures prices.

USDA released some early projections in late November 2017. They predicted that 2018 corn would come in at 91 million acres with an average yield of 173.5 bu./ac. At current demand this would result in a 2.6-billion bushel ending stock, a huge number. At the same time they predicted that soybeans would tie corn for acres at 91 million, with an average yield of 48.4 bu./ac. and 376 million bushes in ending stocks. These are very big numbers versus 2017.

The acreage numbers will be important in 2018 for shaping the future of corn supply. Increasingly, it’s obvious how resilient the newer corn hybrids are. Statistics Canada this year is predicting an Ontario corn yield of 169.5 bu./ac., which is close to a record. At the same time in the November USDA report the U.S. corn estimate of 175.4 bu./ac. was a record yield.

This came about despite a growing season that was uneven in many parts of the U.S. Even though the USDA initial figure for 2018 is 173.5 bu./ac., with benign weather, that yield could be substantially higher, even more than 2017.

This could catapult us into an ending corn stocks situation that would be worse than onerous, and that would have the effect of keeping corn futures prices in the low range.

This range as we headed into winter was seeing March corn at $3.53 per bushel and December 2018 corn at $3.86 per bushel. This is happening in an ever-expanding supply situation, but demand cannot be ignored. Simply put, corn demand is strong and has been at near-record levels over the last couple of years.

In 2017-18 total corn usage in the U.S. is slated to come in at 14.435 billion bushels. With last year’s production from the November report of 14.578 billion bushels, there is not a lot of room for a production calamity. Needless to say, so far the corn supply is outstripping the record demand and it needs to stay that way for prices to stay low.

The big demand components for U.S. corn are feed and residual at 5.575 billion bushels; food, seed and industrial at 6.935 billion bushels; and ethanol at 5.475 billion bushels. These components, along with exports, make up total demand. The ethanol component of this demand continues to grow slowly but it is unlikely to ever repeat the explosion of 2008. However, low corn prices will likely continue to stimulate feed and food demand. Corn exports from the U.S. largely depend on price as well as the value of the American dollar. Recent moves by the Trump administration against Mexico, the largest American export destination for corn, has led to a curtailment in shipments.

There are more geopolitical issues beyond the tension between the U.S. and Mexico. For instance, China is moving toward a policy of a 10 per cent ethanol blend in gasoline nationwide by 2020. At the present time there are approximately 205 million cars in China, which consume 3.8 billion gallons of gasoline. China has huge corn reserves and much of that would be consumed in expanding their ethanol mandate by 2020. An expanded Chinese ethanol corn policy may ultimately result in an increase in corn demand by 1.4 billion bushels. Of course, it should not be forgotten that this is unlikely to help the corn price in 2018, but it could ultimately be part of future demand helping out our corn price.

In Ontario, corn production in 2017 was approximately 2.015 million acres. Historically, Ontario consumes more corn than we produce. In the past, this has meant that corn has been exported during harvest time (low basis) only to be imported back in during the later parts of spring and summer, when it creates a better basis.

However, this is changing as corn productivity in Ontario continues to grow. It is conceivable that in the future, Ontario corn may remain on an export basis continually. (Conversely, if Ontario domestic demand for corn can be increased substantially, cash basis levels may be sustained at certain times a year, while the Eastern Ontario basis will likely continue to always be higher than cash basis levels in southwestern Ontario.)

The Canadian dollar will have an effect on this to some extent. However, its value does not affect corn basis levels in Ontario as much as it does Ontario soybeans and wheat, where the cash price optics in Canadian funds often look so different than cash prices in the U.S.

Of course, what’s needed to lift corn futures prices is some type of production calamity somewhere in the world to bring corn supplies down. History tells us that this will happen someday. However, when corn futures prices reached $8.49 in 2012, we taught the rest of the world to grow corn. Overseas production in Brazil and the Black Sea region continue to be resilient.

To Canadian corn farmers hoping for $6 corn again, I say, keep hoping. But at the same time, always remember that hope is not a marketing plan.

There hasn’t been a kernel of 2018 corn planted yet. There surely will be marketing opportunities ahead as there are all kinds of potential risks in the coming year. The challenge will be to capitalize on some of these corn-marketing opportunities in a generally bearish environment.

Let’s keep our eyes open. In 2018, there surely will be some surprises.

This article first appeared in the 2018 issue of the Corn Guide.

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“(The report is) a big one. I guess most (people are) and I am too looking for a little bit bearish numbers again,” said Scott Capinegro at Highland Trading.

The USDA reports are due out Jan. 12 and cover a variety of topics including crop production numbers, grain stocks, winter wheat acres, price forecasts and international supply and demand estimates. According to Capinegro the reports could have an effect on the markets as trade has been quiet to start off the year.

“We have more funds short than we did last year,” he said, noting that market participants were still trying to break down what those numbers mean.

Seasonally there is usually a bounce in the corn and soybean markets in January and February. However Capinegro thinks the trading range will be tight to start off the year.

“If we do make new lows that could be a buy area again for a bounce, but when you buy these rallies they haven’t fared very well the last couple of months. So you’ve got to be patient and wait for a break,” he said.

As well with the start of the New Year traders are beginning to look towards this year’s growing season and are paying attention to drought maps and forecasts. According to Capinegro there are still chances for spring rains and hopefully above average temperatures heading into April.

“To me that would be a little bit of a signal that something’s going on with the weather here. We’ve had five years in a row that corn has closed lower for the year so I mean things are setting up for a rally,” he said.

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Any strength was largely tied to chart-based speculative buying, with no real fresh fundamental news as far as canola is concerned. The harvest is largely complete across Western Canada, while the U.S. harvest is in its final stages.

Farmers were still making good deliveries into the commercial pipeline in the latest weekly data, and the ample nearby supplies should be keeping a bit of a lid on the market. While those off-the-combine deliveries will now be slowing down, end users are looking comfortable for the time being with little reason to bid up the market.

Producers delivered just under 400,000 tonnes of canola during the week ended November 12, taking visible stocks to 1.4 million tonnes, according to the latest Canadian Grain Commission data. Exports were off the record level posted the previous week, with adverse weather at the West Coast likely causing some delays.

Agriculture and Agri-Food Canada released updated supply/demand tables during the week, but left their projections for canola unchanged with a carryout of one million tonnes projected for 2017/18. That would compare with the 1.3 million tonnes carried forward from 2016/17. The one million tonne mark is considered a bit of a tipping point for canola, with anything below that considered tight. As a result, future adjustments to the supply/demand balance will be followed closely.

Statistics Canada releases its final survey-based production estimates of the year on December 6, which should provide a clearer picture on the available supplies for marketing this year.

Looking ahead, basis opportunities are a possibility, but the futures might just keep grinding along within their sideways range until a fresh spark comes to move values one way or the other.

In the U.S., soybeans and corn also saw some choppy activity during the week, with the bias pointed lower for the most part before Friday’s corrective bounce.

Corn futures touched fresh contract lows during the week, and could still have more room to the downside. However, about five to ten per cent of the U.S. corn crop is still waiting to be harvested, with quality and yield downgrades a possibility in some cases.

Soybeans hit their weakest levels in a month during the week, but bounced off of those lows as fund traders squared positions.

Attention in both markets is now shifting to South America, where weather conditions in Brazil and Argentina have the potential to pull prices one way or the other.

The U.S. Thanksgiving holiday takes place on Thursday, November 23, and U.S. markets will close early on Wednesday and only see sporadic activity on Friday as participants digest their turkey. The holiday trade could lead to some choppiness and price swings.

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The U.S. Agriculture Department in its monthly supply and demand report said the bumper corn harvest will raise stockpiles of the yellow grain even as exports and usage from the feed sector rise from its previous estimates for the 2017/18 marketing year.

In its crop production report, USDA also trimmed its estimate of the soybean harvest from its October outlook. Despite the cut, soybean production was still expected to come in as the biggest ever.

USDA pegged the corn crop at 14.578 billion bushels, based on an average yield of 175.4 bushels per acre. That compares with its October production outlook of 14.280 billion bushels, based on an average yield of 171.8 bushels per acre.

Analysts had been expecting a corn production figure between 14.250 billion bushels and 14.459 billion bushels, based on estimates given in a Reuters survey. Analysts’ yield estimates ranged from 171.7 bushels per acre to 174.0 bushels per acre.

If realized, the government’s corn yield projection would top the previous record of 174.6 bushels per acre reached in 2016.

In Iowa and Illinois, the two largest production states for corn, USDA boosted its average yield by 6 bushels per acre from its October estimate.

For soybeans, USDA pegged the crop at 4.425 billion bushels, topping the average of analysts’ estimates but in line with forecasts that ranged from 4.375 billion bushels to 4.467 billion bushels.

USDA left its soybean yield projection at 49.5 bushels per acre, unchanged from October. Analysts, on average, had expected a soybean yield of 49.3 bushels per acre.

U.S ending stocks of corn were seen at 2.487 billion bushels, 147 million bushels higher than the October view. USDA raised both exports and usage from the feed and residual sector by 75 million bushels.

USDA pegged soybean ending stocks at 425 million bushels, down 5 million form October due to the cut to the production forecast.

For wheat, USDA lowered its ending stocks view by 25 million bushels to 935 million bushels. It raised its export outlook by 25 million bushels to 1.0 billion due to recent sales of hard red winter wheat to Iraq.

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