Although the U.S. is on track to produce a big crop for 2018-19, Agriculture and Agri-Food Canada expects corn prices to improve over the previous year. AAFC market analysts attribute the potential price increase to lower ending stocks in the U.S.
In their latest outlook for principal field crops, released on Aug. 17, the analysts note that the ending stock projection has been lowered by around 25%, which has helped boost U.S. corn futures prices. Meanwhile, “a near to unchanged Canadian” dollar is expected to support Canada’s corn prices.
As for other impacts on U.S. futures, the report notes that the ongoing trade issues with China and Mexico continue to add a level of uncertainty. Also, the other three major world corn market competitors, Argentina, Brazil and Ukraine, are projected to have higher 2018-19 corn production, which will cut into the U.S.’s corn export market share.
The AAFC analysts continue to forecast a slight increase in soybean prices to $430-470/tonne on support from higher U.S. prices and the discount of the Canadian dollar against the American currency.
The average crop year prices of wheat in Canada for 2018-19 are forecast to increase from 2017-18 because of the lower world, U.S. and Canadian supply.
However, the report notes that protein premiums are expected to decrease because of higher hard red spring wheat production in the U.S. and higher protein levels for U.S. hard red winter wheat.Prices have risen during the past month due to declining crop production estimates for the EU, Russia, Ukraine and Australia, resulting from dry conditions in many wheat growing areas.