Karl Setzer Sees a ‘Good Sign’ Ahead for the Grain Markets to Start 2025
If you were to choose just one word to describe the grain markets in 2024, that word might just be “Volatility.”
“2024 is going to go down as a year that had it’s ‘ups and downs’,” says Karl Setzer with Consus Ag Consulting—although, the year ended with more “downs” than “ups”.
If you take the nearby contracts for corn, wheat, and soybeans on the last trading day of 2023 and compare those to the last trading day of 2024, you’ll find that corn has fallen by 12 ¾ cents a bushel, wheat is down by 76 ½ cents a bushel—but the biggest drop has been in soybeans, which has fallen by $2.95 a bushel.
Setzer says, at point, grain prices were on track to end even lower.
“[The volatility] subsided a little bit as we got through the first part of the holiday season around Thanksgiving,” according to Setzer. “Then in the year-end, we saw the big volatility come back in with heavy fund positioning and funds really adding to their corn complex throughout December taking it to over 200,000 contracts to the long side. Then, all of a sudden, we get to the end of the month and the funds are playing catch up in the soy complex. That’s what gave us our big gains going into the New Year’s break.”
Overall, Setzer says there are signs that point to a little bit of optimism for grain prices as we start off 2025.
“We will see demand slow a little bit as we move into 2025, but it seasonally does that. That’s not going to come as a shock,” says Setzer. “The thing is, we are well ahead of where we typically are for sales and for domestic demand, and it’s starting to edge our market higher. I’m not saying we won’t see corrections, but the market is definitely telling us that it is comfortable at today’s levels, which is a good sign moving forward.”
Setzer has noted that one additional factor for early 2025 is the harvest of corn and soybean crops in South America. As of Thursday, heavy rains continue to fall in parts of Brazil, which is delaying the start of their soybean harvest.
For more information about Consus Ag Consulting, visit ConsusAg.net.
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