I’ve changed my monthly discussion of real month-end fundamentals for the various grain markets. I’m simplifying the conversation by applying the Law of Supply and Demand: Market Price is the point where the quantity demanded equals quantities available creating a market equilibrium. My take on this Law is tweaked by looking at “available supplies” rather than “total supplies”, an important distinction in the Grains sector given supplies can be held off the market in on-farm or commercial storage. If we consider the three variables in the equation (Market Price = Supply, Demand) the only one known is Market Price. Therefore, a study of Market Price is all that is needed to understand the relationship between the unknown variables of Supply and Demand.
CORN: The National Corn Index (NCI) was calculated near $4.50 at the end of January, as compared to the end of December at $4.32 and the January 2024 price of $4.27. This tells us available supplies in relation to demand continued to tighten during January, with the NCI at its highest monthly close since October 2023 at $4.53. The NCI continued to move off its low monthly close of $3.69 from last August as fall and winter demand remained strong. The end of January available stocks-to-use was 12% as compared to December’s 12.3% and January 2024’s 12.4%. The bottom line for corn is demand has been running ahead of available supplies. We’ll see how long this trend lasts.
SOYBEANS: The National Soybean Index (NSI) was calculated near $9.78 at the end of January, as compared to the end of December at $9.50 and the January 2024 price of $11.69. This tells us available supplies in relation to demand tightened during January but remains more cumbersome than what was seen a year ago. The end of January available stocks-to-use calculation came in at 16.2% as compared to December’s 17.5% and January 2024’s 9.6%. Seasonally, the NSI tends to trend up from late January through mid-May, meaning available supplies in relation to demand tend to tighten this time of year.
SRW WHEAT: The National SRW Wheat Index (SWI) was calculated near $5.04 at the end of January, as compared to the end of December at $4.93 and the January 2024 price of $5.40. This tells us available supplies in relation to demand tightened during January, but remain more cumbersome than what was seen a year ago. The end of January available stocks-to-use calculation came in at 44.0% as compared to December’s 44.9% and January 2024’s 41.6%. The bottom line is the US is not running out of SRW wheat any time soon.
HRW WHEAT: The National HRW Wheat Index (HWI) was calculated near $5.19 at the end of January, as compared to the end of December at $4.98 and the January 2024 price of $5.68. Similar to the SRW market, this tells us available supplies in relation to demand tightened during January but remain more cumbersome than what was seen a year ago. The end of January available stocks-to-use calculation came in at 42.8% as compared to December’s 43.9% and January 2024’s 40.1%.
HRS WHEAT: The National HRS Wheat Index (HSI) was calculated near $5.95 at the end of January, as compared to the end of December at $5.76 and the January 2024 price of $6.69. The end of January available stocks-to-use calculation came in at 42.2% as compared to December’s 43.1% and January 2024’s 38.4%.
