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Rabobank report forecasts long-term price increases

A new Rabobank report suggests commodity prices will drop some before 2024 but move higher through 2030.

Economist Stephen Nicholson tells Brownfield he sees some changes and some trends in corn, soybeans, and wheat markets that are overall supportive of prices in the long term. “You do see them trending down over that ten years, and that’s part of the function of the model itself. It’s also a function that we continue to see continued growth in yields, but if you had looked at those price graphs every six months in the last two years, you’ve seen those price ranges continue to move higher.”

Nicholson says that trend is partly because it’s more difficult to build stocks because of growth in domestic demand.  “Because domestic demand is so strong, and you have this huge domestic demand base that’s in place, that’s going to be supportive to prices, and because of that, both corn, soybeans, and wheat are all fighting for those acres along with lots of other crops, and as they fight for those acres, that’s going to support prices as well.”

Nicholson says increases in soybean crushing capacity will increase soybean demand, and corn for feed demand keeps going up.  He says corn will have the most acreage for now, but soybean demand for renewable diesel will bring soybean acres up as new crushing plants come online.

Nicholson says the big mystery for U.S. commodities will be exports since China’s needs are unknown, and production in Ukraine is expected to fall because of war damage to fields and infrastructure.