Webinar panel: Uncertainty for grain, oilseed, sugar markets

KANSAS CITY — Commodity ingredient markets face uncertainty next year, according to a panel of featured speakers who took part in the 2024 Purchasing Seminar Winter Webinar hosted by Sosland Publishing.

Josh Sosland, president of Sosland Publishing and editor of Milling & Baking News, chaired the online event Dec. 4, sponsored by AB Mauri, Amber Wave, Miller Milling and StoneX. The webinar presented a six-month update to the Sosland Publishing Purchasing Seminar, held in June in Kansas City. The three-day summer event brings together hundreds of professionals from food and ingredient companies and saw record attendance in 2024. The next seminar will take place June 8-10, 2025.

Webinar participants included Steve Freed, consultant at Freed Consulting; Drew Lerner, meteorologist and president of World Weather, Inc.; Alex Norton, president of Beeson & Associates, Inc.; and Ron Sterk, senior editor, markets, Sosland Publishing.

Grains

Next year will bring plenty of unknowns to the global grain market, from geopolitical conflicts to currency issues, Freed said. The most talked about unknown will be any new tariff situation that evolves under President-elect Donald Trump, who has promised to implement changes to the way the United States handles trade with key partners, including China, Mexico and Canada.

China’s economic development also will be key, Freed said, noting China is the biggest buyer of commodities in the world and that its economic growth rate is expected to decline over the next decade, according to US Department of Agriculture projections.

Major grain and oilseed prices declined from 2023 to 2024, including wheat, corn, rice, soybeans and the overall soy complex. Whether that trend continues in 2025 will depend on a variety of factors, from domestic and global political developments to South American weather patterns.

One oilseed that looks likely to maintain its price skid is soybeans, Freed said. World soybean production continues to increase and could be up as much as 30% next year. Foreign production is leading the way, with Brazil’s soybean output expected to increase another 16% in 2025 to a record high.

Edible Oils

Edible oils are entering a period of renewed uncertainty in 2025, Norton said. Bearish signs include strong US and South American supplies and potential tariffs, while bullish indicators include continued unrest in the Black Sea region and the possibility of a new trade war cutting off US imports of used cooking oil (a major feedstock for US renewable diesel production) from China.

“Overall, we’ve got really big stocks of soybeans, and we’re crushing a lot,” Norton explained. “So we’ve got more capacity to make oil, but we’ve got really tight soybean stocks domestically because we’re using so much for growth in the renewable diesel space.”

Norton called 2024 “a pretty mild year” for soybean oil prices, predicting that could remain true through the beginning of 2025, while longer-term signs of volatility persist. For example, he said, the last trade war with China in 2018, under the first Trump administration, saw Chinese imports of US soybeans cut almost in half.

US soybean crush has increased to record levels, with US renewable diesel capacity expected to reach 6 billion gallons in 2025 and over 7 billion gallons by 2026. That should mean an excess of soybean meal in 2025, with soybean meal prices continuing to fall.

Palm oil interests, meanwhile, are keeping an eye on tighter stocks in Malaysia and better demand for biodiesel emerging in Indonesia, Norton said.

Weather

This winter could bring cooler-than-average temperatures to portions of the United States, if historical weather patterns offer any clues, Lerner said. He looked at similarities between this year’s weather and that of 1952 to forecast the remainder of 2024 into 2025.

In North America, winter temperatures likely will be cold in the Midwest, central plains and especially the Northeast, while spring 2025 could bring wetter-than-usual conditions to much of the country, including the Upper Midwest into southern Canada. Lerner expects summer to be drier in the central Plains and Midwest, while remaining wetter in the northern Plains and Great Lakes regions.

“The bottom line here is that we may have some problems with crops in the central part of the United States,” he said, “but it looks like the Midwest in general should do relatively well.”

Lerner predicted South American weather patterns are likely favorable to what is expected to be record or near-record crop production for soybeans and corn in Brazil and Argentina. Globally, other hotspots to watch are dryness in North Africa, unfavorable weather in Russia’s southern wheat areas, moisture deficits in Turkey and a drier-than-usual winter in parts of India.

Sweeteners

Food manufacturers can expect lower sugar and corn sweetener prices in 2025, with price direction for 2026 still unclear, said Sterk, who is editor of the Sosland Sweetener Report.

Refined sugar prices have declined since peaking in 2022-23. Record-high domestic sugar production in 2023-24, followed by strong production again in 2024-25, will ensure ample supplies that likely will keep pressure on prices and provide buying opportunities for food and confectionery manufacturers, although most have the bulk of their 2025 needs covered. Mexico also is recovering from two years of drought and should have ample supplies for export to the United States if needed in the US market.

Winter weather will be imported to keep northern US beet piles frozen as processing of the large beet crop will run well into spring 2025 for some processors.

Corn sweetener contracting for 2025 began later than usual this year and will run through yearend. Prices appear to be flat to lower compared with 2024 contracted levels because of ample corn supplies, lower corn prices and reduced demand from Mexico in 2025.

Sweetener demand remains the difficult area to assess, although recent trends indicate some combined negative impact from GLP-1 drugs, reformulation and alternative sweeteners mostly offsetting increased demand from population growth.