Market Analyst Tom Fritz on the Factors Driving Grain Prices Lower

Tom Fritz, Commodity Broker with the EFG Group in Chicago. Photo: Michigan Ag Today.

Sell-offs have continued for several straight days in the grain markets leading to much lower prices for corn, soybean and wheat futures.

“It’s kind of like—let’s make it real simple—what’s grabbing you by the lapels and saying you need to buy me? I’m not seeing anything like that,” says Tom Fritz, Commodity Broker with the EFG Group in Chicago.

He points to several different factors that have been driving down grain prices over the past week.

“I think it’s a combination of a lack of demand for old crop corn and soybeans. It also looks like the new crop is going to get planted in a timely manner—so, as far as I’m concerned right now, we are going to have more than ample acres planted to corn. Soybeans are going to fight for acres, but right now there’s just nothing threatening out there.”

Fritz also says the U.S. soybean market has taken a backseat to the Brazilian soybean market.

“Brazilian soybeans are the dominant player in the world export market,” according to Fritz. “Reports are the U.S. is in the process of importing 80,000 tons of soybeans, but it’s usually much later in the season. We’re importing them now. Brazil talks about their basis for selling soybeans to China—there’s no ‘overs’, there’s ‘unders’—which is almost unheard of.”

In terms of corn and wheat prices, Fritz says the ongoing war between Russia and Ukraine continues to play a wild card factor.

“If Russia decides to pull out of the Black Sea deal, Ukraine will be taken out of the export market, so that would give our corn and wheat market a bit of a lift. Three weeks from now when we get into mid-May, we’re going to see where we are with this Black Sea deal. It seems like every time there’s a legitimate threat to this deal getting shut down, the market responds with a rally. Given what the market has done over the last week, we’re now prone for a rally,” says Fritz.

Between Tuesday, April 18, 2023 to the close of markets on Monday, April 24, 2023, May corn has lost 26 ¼ cents, May soybeans are 54 cents lower, and May wheat is down 54 ½ cents.

Click below to hear C.J. Miller’s news report for Michigan Ag Today.


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