KANSAS CITY — Prices for organic food-grade hard red spring wheat, durum and soybeans in the two-month October-November period declined from the prior two two-month periods and from a year ago, according to Mercaris, the organic and non-G.M.O. trading platform and market information company.
Trading of food-grade organic durum increased over the latest period, while trading of other wheat classes mostly was slow, according to Mercaris.
“Organic hard red spring wheat prices fell again in November, almost falling below the $15 per bu mark,” said Ryan Koory, Mercaris senior economist. “Food- grade wheat continues to struggle under multiple layers of bearish price pressure with overall wheat supplies higher year over year, but protein content generally lower. Wheat prices will likely struggle until winter wheat crop conditions become known and buyers start to form a perspective of what wheat supplies will look like over the last half of 2019.”
Neither hard red winter wheat or soft red winter wheat prices were quoted by Mercaris for October-November, but durum was quoted in the latest period after not having sufficient trading volume for quotes in the prior two periods.
“Organic durum wheat purchasing increased in November, with the price level down only slightly from the end of quarter two,” Mr. Koory said. “Through the last half of 2018, organic durum wheat prices have remained mostly steady between $16 and $17 per bu.”
Food-grade organic corn and soybean prices were lower over the latest period, although corn trading volume was not sufficient for a price quote.
“Organic corn contracting slowed to a crawl over November, with the number of reported transactions too few to quote a price,” Mr. Koory said. “In general, the price for organic food-grade corn continued to fall over the month, with the market average price remaining in the $10 to $10.25 a bu range (compared with $9.83 a bu a year ago). Now, with December fully underway and holiday breaks looming for the second half of the month, it is unlikely organic food grade corn contracting will increase before the start of the new year. Anecdotally, farmers still hold a good amount of corn in their bins. Purchasers should watch for price volatility and buying opportunities toward the end of first-quarter 2019 as operators look to make cash flow ahead of planting.”
Soybean prices also declined in the latest period, but trading volume held about steady through November.
“Organic soybean prices have continued to fall through quarter four, with the October-November average market price declining to its lowest level since quarter one of this year,” Mr. Koory said. “Previously, Mercaris has discussed the potential for food grade soybeans to their fourth-quarter bullish window, and now it appears that this has been the case. Unlike organic corn, organic soybean contracting activity remained steady through the month of November. But, like organic corn, purchasing activity is expected to slow along seasonal lines over the next several weeks.”
In its monthly market update, Mercaris noted that organic soybean demand (food-grade and feed-grade) remained “remarkably strong” through 2017-18. Supplies were estimated in excess of 29 million bus, comprising both domestically-produced supply and imports. Domestic organic soybean production in 2018 was up about 15% from a year earlier, equal to just over 1 million bus, “which is progress toward meetings U.S. market needs,” Mercaris said. But with organic soybean imports at 22 million bus in 2017-18, “it will require many more years of double-digit acreage growth for the U.S. to curtail its reliance on imports.”
“Without question, purchasers prefer to source domestically produced organic soybeans,” Mercaris said. “How to relate this preference back to growers in a way that produces more acres is a question the industry needs to answer.”
Mercaris is a comprehensive source of market data and online trading for feed-grade and food-grade organic and non-G.M.O. commodities based in Silver Spring, Md. For more information visit www.mercaris.com.