Following the Thanksgiving holiday, agricultural markets have been characterized by narrow movement and sustained pressure on prices. In a conversation with Farm Director KC Sheperd, Dr. Todd Hubbs, Oklahoma State University Crop Marketing Specialist, detailed the factors keeping prices flat and offered strategic advice for producers looking to make sales in 2024.
Hubbs noted that post-holiday trading has been contained, reflecting an overall quiet environment despite global headlines.
“Relatively narrow band of movement across most ag markets,” Hubbs said. “Not a lot of info, you know, narrow bands for the most part as we’re settling in“.
Commodity Deep Dive: Supply Weighs on Prices
Hubbs provided a rundown on the major commodities, emphasizing that large supplies are the primary factor suppressing any substantial price rallies:
- Wheat: The Oklahoma wheat basis has remained fairly stable but sits at the “lower end of a five-year range”. While exports were strong earlier in the year, they have since “sort of flattened out and weakened as we’ve gotten deeper into the fall”. Hubbs noted that global supply, paired with a good quality crop in Oklahoma this year, keeps pressure on the market.
- Corn: The corn market is struggling with a “big supply”. Although there is “massive usage in ethanol and trade,” the sheer volume of corn available is keeping prices suppressed, a situation Hubbs does not see “stopping anytime soon”.
- Soybeans: The soybean market saw a “massive crush” reported in October. However, the market remains heavily dependent on two key policy factors—trade and biofuels—which introduce “a lot of uncertainty in both of those right now”.
WASDE Outlook and South American Influence
Looking ahead to the upcoming monthly WASDE report, Hubbs is “not expecting much change” for domestic crops, as final production figures will not be released until January. The real global influence comes from South America.
Hubbs noted that the Brazilian soybean crop is currently setting up to be a “huge one”. While weather patterns associated with La Niña tend to bring dryness to southern areas of Argentina and Brazil, Hubbs advised that there is currently “no reason to fade those crops”.
Ultimately, moving prices out of the current ranges will require a major event. “We need a supply shock or some kind of geopolitical shock to get us out of these ranges,” Hubbs stated.
Advice for Producers: Targets, Not Tops
Given the low-price environment and persistent pressure, Hubbs stressed that producers need to remain active in the market, focusing on achievable goals.
He recommends that producers “pay attention to your markets” and consider “pricing both old crop and new crop on decent rallies”. He cautions against waiting for unsustainably high prices:
“I like to talk about it, think about targets, not tops,” Hubbs advised. “Work can I be to be probable, is that that price? Maybe I should sell some”.
