Are you ready for corn prices down around $2.70/bushel, or soybeans under $7 next fall? Those numbers were included in some of the projections shared in Winnipeg this week, as market analysts and traders from around the world gathered for the second annual Cereals North America market outlook conference.
The conference was organized and co-hosted by CWB Market Research Services and Chicago-based advisory firm AgResource Company.
Despite the recent rally led by soymeal in grain and oilseed markets, the need for farmers and grain buyers to adjust to lower prices for the next few years was a recurring theme at the event.
“We’re lacking a demand driver, and as we think forward, we need to build demand with lower prices over numerous years,” explained AgResource president Dan Basse in the video above, noting the two main demand drivers over the last few years — growth in the biofuel market and China’s economy — are both slowing demand.
He described the recent rally as a short-term bump in prices due to logistical challenges with soybean meal in the U.S.
“A lot of this rally is due to railcar dislocations in the United States. Unfortunately, railcars will find their ways to the right spots and we’ll find availability of supply. We’re double-booking on meal, both on truck and rail,” he noted. “I think this is a short-term phenomenon, maybe over in the next week or two.”
That means the current market should be viewed as a pricing opportunity, not only for next year’s crop, but for 2016 as well, suggested Basse.