by PressCanadian grain crop prices to be volatile in the new season
Canadian grain crop prices: trends overview
Canadian agricultural producers faced a challenging year in 2024. Weather conditions were unfavourable, and grain prices did not meet expectations. Analysts expect this trend to continue into 2025.
Prices for major crops
Prices in the new marketing year are expected to be lower than in the last 5 years. Costs, on the other hand, have risen steadily in recent years. Forecasts for the 2024-2025 season are as follows:
— corn, wheat and barley prices will remain at current levels;
— oilseed costs will fall;
— peas and lentils prices will fluctuate throughout the year;
— feed barley prices will rise slightly.
In terms of production, corn and soybean rates will remain at 2023-2024 m.y. levels. At the same time, they will be above the average for the last 5 years. Barley and pea harvests will decline, while canola and wheat will increase.
The 2024 growing season was volatile in Western Canada. An early-season drought spread throughout the region. However, rains in May and June compensated for the lack of moisture. Thanks to this, farmers were able to harvest a good crop, although it could have been higher if the rainfall had continued during the pollination period.
In the Prairies, yields were in line with the 5-year average. Barley production volumes fell slightly due to reduced planted acreage, but they were still within five-year levels.
Canola and wheat production stabilised in Saskatchewan.
US market situation
Analysing the dynamics of crop prices in Canada is best done through the ratio of stocks-to-use and futures contracts. This ratio reflects the supply/demand balance in the market. The physical location of futures supplies is the United States. This means that the situation in the US market should be analysed.
US corn production is expected to be higher than the previous season. This is a limiting factor for corn and soybean prices. There is little chance that the US corn use rate will fall to 10%.
The US is a major wheat exporter. However, the country does not set the crop’s price as there are stronger players. These include the European Union. The US acts as a global crop reserve. Wheat stocks should fall this season as a result of lower production. At the same time, crop consumption is expected to increase, which will push up production costs.
The outlook for US soybean stocks is more optimistic. Production will be higher than in the last four years but will not reach pre-pandemic levels. Demand for soybeans is expected to be lower, which will affect the price.