Listen to the Full Report
Watch your email for our January call date.
Read the Recap
Grain Market Update: Adam Betancourt | ADM
Synopsis
- To succeed in this market environment, having a marketing plan to capitalize on upper-range opportunities will be critical in 2025 and beyond.
- The spread between corn and soybeans currently favors corn, supported by stronger U.S. export demand.
- Implied volatility for corn and soybeans has decreased, with corn nearing decade lows, suggesting the market is undervaluing risk premiums at the moment.
- Corn offers a favorable marketing opportunity in the short term, while soybean producers may benefit from waiting for potential catalysts in the coming months.
- Bearish fundamentals and the USDA’s lack of updates leave the soybean market without a clear catalyst for upward movement.
- Wheat prices remain range-bound, with no significant movements expected in the near term.
Grain Market Trends
- Reflecting on 2024 and recent years offers valuable context for grain market trends.
- The period from 2010 to 2014 mirrors 2020 to 2024, with two to three years of elevated prices followed by a protracted downward trend.
- In 2023 and 2024, early-year grain pricing opportunities were strong, but market erosion occurred as the year progressed.
- Proactive marketing decisions earlier in the year have been consistently rewarded, and this trend is expected to continue in 2025.
- Spot pricing during harvest has generally not been advantageous over the last two years, depending on the region.
- The market may transition into a less-volatile, range-bound pattern like 2015 through 2019 but likely at slightly elevated price levels due to inflation and higher input costs.
- Producers could face a market with limited movement, potentially within $1.00 to $1.50 at a time within a given year.
Corn
- Corn prices have been mixed across the calendar but show an uptrend from August lows in nearby contracts, despite being $0.10 lower than a month ago.
- Implied volatility for corn is near decade lows, indicating that the market is not pricing in significant risk premium at the moment.
- The USDA revised corn ending stocks lower due to improved exports and domestic demand on ethanol crush.
- Charts show support at $4.30 and resistance at $4.42. If the market can hold or trade sideways at current levels, the next resistance range is likely $4.55 to $4.60.
- The recent rally provides an opportunity for short-term pricing on nearby contracts, especially for those looking to lighten their load.
- The market appears slightly overbought in the short term, suggesting potential consolidation, sideways trading or a slight pullback before another upward move.
Soy
- Soybean prices have traded sideways in the nearby but are down roughly $0.30 on November contracts for next year compared to a month ago.
- Favorable weather in South America and steady crop estimates (ranging from 172 to 173 million metric tons) are contributing to bearish sentiment in the soybean market.
- The USDA left soybean ending stocks unchanged, awaiting further updates on South American crop developments.
- Soybeans are trading near contract lows, with support at $10 and resistance at $10.35.
- There could be potential for upward movement if news emerges from South America to reduce crop estimates during the critical January-February window.
- The soybean market lacks strong directionality, making it challenging to recommend aggressive new crop sales at this time.
Wheat
- Global wheat market dynamics hinge on the final size and quality of the Russian wheat crop, which remains a constant concern.
- Despite these concerns, Russia continues to dominate the export market.
- USDA increased U.S. wheat export estimates by 25 million bushels, but this adjustment is unlikely to significantly impact the market.
Grain & Fertilizer Storage
ADM offers on-farm grain and fertilizer storage options to fit your needs, including flat storage buildings and upright fertilizer tanks for both liquid and dry fertilizer depending on your region. Now is a great time to reach out to your ADM Farm Direct Fertilizer representative to start the conversation and explore available opportunities.
Domestic Fertilizer Outlook
Noah Bishop, Mark Wegner, Nick Peterson and Brock Anderson | ADM
Synopsis
- The U.S. remains well behind its five-year average import pace for granular urea, contributing to a firm and strengthening domestic market trend that is expected to persist for the next 30 to 60 days.
- Slow fall and winter imports for UAN, coupled with earlier U.S. plant issues, have created a tighter supply chain. The market remains firm in the short term.
- Tight sulfate supplies in the U.S., coupled with limited imports, are also causing a supply crunch, leading to prices rising by $20 to $30 over the past few weeks.
- Phosphate prices are expected to firm slightly in early Q1. There is significantly lower availability of total phosphates versus the five-year average.
- Potash programs are expected to roll out in January with moderate price declines for winter fill to incentivize early buying, while international markets are gently firming.
Urea
Market View: Forward purchasing urea for planting is recommended to secure current pricing. Prices may drop in late May or early June for side-dress needs when the U.S. becomes the primary active market globally.
- Global urea values have risen over the last week, driven by both supply and demand factors.
- On the supply side, Iranian granular urea production has largely gone offline due to an energy crisis prioritizing gas for residential use over industrial consumption. While Iranian urea doesn’t directly impact the U.S., demand from markets like Turkey and Brazil will likely drive up prices.
- On the demand side, several markets are transitioning from the late Q4 off-season into active Q1 buying periods, including the U.S., European and Australian markets.
- India has announced a tender for 1.5 million tons of urea—nearly double market expectations—raising concerns about U.S. supply availability as Q1 approaches.
UAN
Market View: Extend UAN coverage for planting now, as the downside risk is very limited, and prices will most likely continue to move higher. For side-dress, producers should consider securing some coverage now, but leaving some flexibility to purchase potentially cheaper tons later in the season is advisable.
- UAN imports during the fall and winter have been extremely slow, causing a pinch in the supply system.
- Earlier plant issues in the U.S. have further tightened the supply chain, leading to plant outages, allocations and higher prices.
- Over the past week, values have firmed again, and the market’s firmness is expected to persist.
Sulfates
Market View: For planting and preplant needs, look to lock in sulfate now. Consider waiting to purchase needs for top-dress, as there is a probability the market could ease into Q2.
- For sulfates, the situation is similar to UAN, with tight supplies in the U.S. and limited imports causing a significant supply crunch.
- Prices increased again this week by $20 to $30.
- These values are expected to persist due to market tightness, likely continuing in January through March and possibly into April.
Phosphates
Market View: Prices are expected to firm slightly in early Q1 and increase further with potential in-season premiums as spring approaches. Fill programs are more attractive than in season.
- Domestic winter fill programs for phosphates rolled out early this week, with strong demand from retailers and distributors.
- The reset from the increase in premiums seen this fall was mild, as expected, due to the import pace being significantly behind the five-year average.
- Production interruptions in central Florida and the New Orleans Gulf caused by hurricanes have further reduced availability year over year and are significantly below the five-year average.
- U.S. DAP pricing is roughly at parity or slightly discounted compared to international pricing, making it challenging to attract imported tons.
- On MAP, trade barriers and current price levels continue to make it difficult to secure additional nominal tons, a trend seen over the last two to three years.
- Internationally, India and Ethiopia have issued large buying tenders to address their behind-schedule import paces, relying on Morocco and China for supply.
- A key issue is Chinese producers potentially failing to obtain export licenses to fulfill committed sales, which could force India and Ethiopia back into the international market to cover previously locked-in purchases, tightening global supply and driving prices higher.
Potash
Market View: Lock in early Q1 needs through January winter fill programs, as prices are expected to be more attractive than in-season levels.
- Potash winter fill programs are expected to roll out in January with moderate price declines to incentivize early purchases ahead of spring.
- The international market is gently firming, but early Q1 buying is expected to be at attractive levels and likely cheaper than in-season prices.
Prepay and Finance Opportunities
Plan ahead for the 2025 crop with ADM’s unique 12-month pricing options, allowing you to budget effectively and prepare for spring. Talk to your ADM rep today about prepay terms available in 2024. ADM also offers flexible financing options, including partnerships with John Deere Financial, Rabo AgriFinance and Compeer. For a limited time, ADM is offering a 1% interest rate buy-down on approved Compeer applications (apply online through the Fertilizer portal).
Political Policy Updates: Bryan Dierlam | ADM
Listen to the call to hear the commentary.
Questions from Our Growers
Growers who attend the conference call have the opportunity to get their questions answered by our industry experts.
Q: What percentage sold should farmers be for 2024 on grain?
- While it’s challenging to pinpoint an exact percentage post-harvest, generally being 60% to 70% sold is a reasonable target.
- If you are below this level, avoid making a large sale to catch up—consider timing sales strategically based on storage capacity and cash flow needs.
- Plan for additional sales of 10% to 15% if there’s a market run-up in December, while leaving the final 15% to 20% for potential rallies during summer weather volatility.
Do you anticipate near record-low fall 2024 phosphate applications due to values vs. crop value ratios, and how will it impact domestic supply?
- Beginning phosphate stocks for 2024 are at a ten-year low, with domestic production down by half a million tons due to hurricanes, further limiting availability.
- We expect demand to be off, but it would need to drop 10% to 15% on a crop-year basis to balance net availability with consumption, which is unlikely to happen broadly.
- Small pockets may see some in-season price dips due to reduced application, but international and domestic dynamics suggest limited overall price reductions.
ADM is providing this communication for informational purposes, and it is not a solicitation or offer to purchase or sell commodities. The sources for the information in this communication are believed to be reliable, but ADM does not warrant the accuracy of the information. The information in this communication is subject to change without notice. If applicable, any information and/or recommendations in this communication do not take into account any particular individual’s or company’s objectives or needs, which should be considered before engaging in any commodity transactions based on these recommendations. ADM or its affiliates may hold or take positions for their own accounts that are different from the positions recommended in this communication.