Ontario Corn Just One Example of Old-Crop Prices Melting Towards New-Crop Values

Ontario corn producers enjoyed some incredibly high prices in recent months. Although prices are still high by normal standards, they're down sharply from their highs earlier this year.

Old-crop prices are far below their spring highs, as both futures and basis levels fell  during most of June through into mid July. At the bull market peak in mid-May, old-crop corn stored in elevators traded in the C$9.80/bu area and corn picked up at farm bins hit the $10 mark ($394/tonne).

More recently, the elevator and on-farm bids have been around $7.60 to $7.75/bu, down more than $2/bu.

That puts old-crop corn at only a slight (30 to 40-cent) premium over new-crop bids, which have also declined from their spring highs. Earlier in the year, there were cases when old-crop bids were $1/bu over new-crop bids.

"People in the grain trade report poor demand for old-crop spot corn, but there's not much on offer either," said an Ontario trader.

"The few farmers still holding some grain aren't ready to accept the drop in prices that has occurred the past two months."

The corn market is only one example of a Canadian crop market that has moved lower after a bull market peak, with 2021-22 crop prices edging toward new-crop values. For most crops, new-crop bids are also down from their highs, but still far higher than the averages of the past several years.

Farmers across Canada have seen spot prices and premiums erode in wheat, soybeans, canola and a variety of special crops, including peas and lentils.

Some prices have bounced recently, but the bullish environment of the fall, winter and spring has dramatically shifted.

For corn and soybeans, weather could still cause more rallies to recover some of the losses. "The corn crop is tasselling throughout the US and is in an important yield-determining stage," noted the Ag-Alert market advisory service.

"For soybeans, the crop is only just entereing its most critical podding phase at this time. August can be a volatile time for the soybean market."