More uncertainty for grains and oilseeds: FCC

Grain farmers can count on another year of uncertainty, according to Farm Credit Canada.

The FCC recently released its 2020 forecast for grains and oilseeds, and there’s not much good news.

If the Chinese hog herd rebuilds more quickly than expected, or the tentative beginnings of a U.S.-China trade agreement in December flower into something more substantial, the markets could rebound. As well, if the U.S. boosts ethanol demand, then corn demand could increase.

But barring something unexpected like that, demand is down and supply is up, with predictable results on prices.

For 2020, corn is projected to stay above the five-year average but slip from 2019’s average of $210 a tonne to $206 a tonne this year, said the FCC. Soybeans are expected to perform better this year, creeping up to $440/tonne from $432/tonne last year.

However, with Canadian grain supply tightening and U.S. crop production estimates likely to be revised downward, corn should remain a profitable crop, said the FCC. Soybeans should be a break-even or slightly profitable crop, but renewed access to China could boost that profoundly. Just don’t bank on it happening.