2024 Grain Market Outlook
Jan 16, 2024
As we welcome 2024, we do so with some encouraging rains in the ground and a blanket of snow covering most of the region. We also have optimism in the weather outlook that we might finally break the drought that has created challenging growing conditions. On the show Yellowstone, John Dutton offers the prayer, “Give us rain and a little bit of luck, Lord, and we’ll do the rest.”
On Friday, January 12, the USDA released the January World Agricultural Supply and Demand Estimate (WASDE) report. Grain markets responded with a sharp decline across the board. The report shows ample supplies, both domestic and global. The US saw a record corn yield up 2.4 bpa, raising production by 108 million bushels. This was partly offset by an increase in feed and ethanol use, leaving a net increase in ending stocks of 31 million bushels. China had significant corn news with a production increase of 11mmt.
Beans also saw a significant increase in yield of 1.7bpa, leading to a net increase in ending stocks of 35 million to 280 million bushels. Brazil saw a decrease of 4mmt, but Argentina increased by 2mmt.
Wheat production in both Russia and Ukraine saw increases of 1mmt, but export projections were also raised for Australia, Canada, Russia, and Ukraine. Ample supply and a difficult export environment contribute to an overall bearish outlook.
This environment calls for an active approach to risk management. It would be wise to consider getting a floor in the market to protect profitability for your operation. Each farm is unique, so many different tools are available to accomplish your goals. Limiting your downside risk is important, but there are always unknown variables that can create upside opportunities. If you already have positions in place, now might be a good time to look at removing ceilings and managing investment. By leveraging our team approach, MKC and Producer AG are uniquely positioned to understand your needs and provide solutions that fit your operation. Some rain, some luck, and we are here to help you with the rest.
Article written by Marshall Anderson, Grain Marketing Specialist