How Low Can Grain Prices Go?

With no major production challenges anywhere in the world, grain and oilseed prices have fallen to levels we haven’t seen since 2010.

So how low can they go? That’s the question Frayne Olson, crops economist and marketing specialist at North Dakota State University, tries to answer in the interview below.

Looking at historical charts for corn, Olson says the next point of resistance is at $3.25/bu.

“If I were to gamble right now, I would argue we’ll probably see corn prices slowly drift lower into that region by the time we reach the middle of harvest,” he explains. “About halfway through harvest tends to be our seasonal low, and then we’ll start to build from there.”

The oilseed complex has more downside risk, says Olson, noting the next level of support on the charts for soybeans appears at around $9.25/bu.

“Proportionately, corn has fallen off faster and harder, but soybeans are now starting to catch up as we look at a big crop,” he says.

The wheat market is much more complicated, in part due to problems with quality in Europe and Western Canada.

“We’re seeing protein spreads really widen out. That’s something farmers need to think about, how to manage this protein issue,” says Olson.

Related: Bearish USDA Report – Could It Be the Turning Point?

Frayne Olson discussed how low markets can go with Kelvin Heppner at the Big Iron Farm Show in Fargo, ND on September 11th:

If you can’t see the audio above, click here.

 

Kelvin Heppner

Kelvin Heppner is a field editor and radio host for RealAgriculture and RealAg Radio. He's been reporting on agriculture on the prairies and across Canada since 2008(ish). He farms with his family near Altona, Manitoba, and is on Twitter at @realag_kelvin. @realag_kelvin

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