Prices for organic grains decline in October and November.
Kansas City According to Mercaris, an organic and non-G.M.O. trading platform and market information organization, prices for hard red spring wheat, durum, and soybeans that are suitable for organic food were lower over the two-month period of October to November than they were a year earlier and in the previous two two-month periods.
Mercaris reports that during the most recent period, trade in food-grade organic durum wheat grew while trade in other wheat classes was primarily stagnant.
According to Ryan Koory, senior economist at Mercaris, “Organic hard red spring wheat prices fell again in November, almost falling below the $15 per bu mark.” Although total wheat supplies are rising annually, food-grade wheat is nevertheless struggling under several layers of adverse pricing pressure due to a usually declining protein content. Until winter wheat crop conditions are understood and purchasers begin to form an opinion about what wheat supplies will look like during the second half of 2019, wheat prices are likely to remain low.
Mercaris did not quote prices for either soft or hard red winter wheat for the months of October through November. However, it did quote prices for durum in the most recent period, as the previous two periods’ trade volume was insufficient to warrant quotes.
According to Mr. Koory, “the purchase of organic durum wheat increased in November, with the price level down only slightly from the end of quarter two.” “The price of organic durum wheat has stayed mostly stable between $16 and $17 per bu through the second half of 2018.”
Prices for food-grade organic corn and soybeans decreased during the most recent period, even though there wasn’t enough corn trading activity to provide a price quote.
According to Mr. Koory, “the number of reported transactions was too small to quote a price, and organic corn contracting slowed to a crawl over November.” Over the course of the month, the price of organic food-grade maize generally decreased; the market average price stayed between $10 and $10.25 per bu, down from $9.83 per bu a year earlier. It seems unlikely that organic food grade corn contracting would increase before the start of the new year, with December now well under way and holiday breaks looming for the second half of the month. Anecdotally, there is still a significant amount of maize in the bins of farms. When the first quarter of 2019 comes to a finish, buyers should keep an eye out for price fluctuations and opportunities to buy as operators try to makefinancial flow prior to planting.
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During the most recent period, soybean prices also decreased, but trade volume remained relatively constant until November.
According to Mr. Koory, “the average market price for October and November dropped to its lowest level since quarter one of this year.” Organic soybean prices have been steadily decreasing through quarter four. It seems that Mercaris has been correct in his previous discussion of food grade soybeans’ potential to reach their fourth-quarter bullish window. In contrast to organic corn, there was no discernible decline in organic soybean contracting activity during November. However, during the following few weeks, buying activity is anticipated to decline seasonally, much like organic corn.
The demand for organic soybeans (food- and feed-grade) was “remarkably strong” through 2017–18, according to Mercaris’ monthly market update. Over 29 million buses were anticipated to be in supply, including both imports and locally made goods. 2018 had a 15% increase in domestic output of organic soybeans, or little over one million buses, compared to the previous year. According to Mercaris, this represents “progress toward meeting U.S. market needs.” However, “it will require many more years of double-digit acreage growth for the U.S. to curtail its reliance on imports,” given that imports of organic soybeans were 22 million tons in 2017–18.
Buyers unquestionably choose sourcing organic soybeans grown domestically, according to Mercaris. “The industry needs to figure out how to relate this preference back to growers in a way that produces more acres.”Based in Silver Spring, Maryland, Mercaris provides a comprehensive source of market data and online trading for organic and non-GMO commodities that are feed- and food-grade.