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Though a new rail labor agreement took some pressure off grain markets earlier this month, supply and demand dynamics are keeping prices in the upper end of the historical range.



A deal approved by Congress and signed by President Joe Biden averted stoppages just days before a rail strike deadline. The measure, which was initially rejected by four unions, includes a 24% pay raise but no additional paid sick time. With many workers still dissatisfied with the contract, some shippers wonder if rail efficiency will be hampered. However, hoarding activity is reportedly easing as goods continue moving.

In the international marketplace, Russia agreed in mid-November to extend for 120 days an agreement to allow grain shipments out of Ukraine. However, officials in Moscow said removing obstacles to Russia’s agricultural exports will be a condition of extending the deal again this Spring.

While shipping grain may not be a worry, growing it might be. Following high temperatures and little rainfall over the summer, USDA data shows poor soil moisture across much of the Grain Belt. Dryness is also expected over the winter amid La Niña conditions.

WASDE Report

For now, grain stocks are tight, but USDA hasn’t moved the numbers any lower. The latest World Agricultural Supply and Demand Estimates report pegged US ending stocks for corn and soybeans within expectations. World corn and soybean ending stocks also fell within forecasts, though on the lower end of predicted ranges.

On the demand side of the ledger, easing Covid restrictions in China could drum up additional interest in US corn and soybeans. The rhetoric of the Chinese government is supportive of grains, but speculation will continue until product begins shipping.

A new mandate from the Environmental Protection Agency may also boost domestic corn demand, though its impact on soybean use remains to be seen. Unveiled this month, the proposal would require refiners of gasoline and diesel to blend 20.82 billion gallons of renewable fuel in 2023, with further increases set for 2024 and 2025. While the measure is expected to benefit ethanol usage, some say it fails to incorporate biodiesel and renewable diesel, which utilize more soybeans.

This monthly report is brought to you by Ever.Ag’s Feed Foundations Team. The risk of loss trading commodity futures and options can be substantial. Investors should carefully consider the inherent risks in light of their financial condition. The information contained herein has been obtained from sources to be reliable, however, no independent verification has been made. By law we must state the information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended to be a solicitation. Past performance is not indicative of future results.