Grain prices may rise in January, while soybean prices will continue to fall, ASAP Agri believes

Ahead of the release of the USDA's January WASDE report on the supply and demand balance for agricultural products, ASAP Agri expert Olivier Bouillet told Latifundist.com about his forecasts.

He believes that the markets have been under pressure for the past two weeks due to dry weather in Argentina, which has led to an increase in prices for some crops, in particular corn, although its prices on the Chicago SWOT have not yet been able to break through the resistance level of $4.58-4.6/bushel. Six-month highs are actively used by physical market participants to accelerate sales or by large funds to close long positions.

At the same time, wheat prices in the US remain under pressure from supply over demand and continue to decline.

The market expects a decrease in soybean and corn production forecasts for Argentina and an increase for Brazil, although from a fundamental point of view such changes will not have a significant impact on quotes, ASAP Agri believes.

Traders will focus on U.S. corn carrying stocks. Export sales have now exceeded 60% of the USDA’s 2024/25 MY forecast, suggesting an underestimation of U.S. export potential. In addition, a possible increase in the forecast for corn ethanol use would also lower the estimate of ending stocks.

Analysts believe that US corn carrying stocks in the 2024/25 MY could decline to 37-40 million tons compared to the USDA's forecast of 44 million tons. If the new report corrects the stock estimate, corn prices will cross the resistance level of $4.6/bushel, which will contribute to the growth of wheat prices.

Soybean prices have failed to consolidate above $10/bushel and remain under pressure from complex fundamental factors.