Please note the date -- This was published Oct. 7, prior to the extreme volatility seen in gold since. But still relevant...
Canada Markets
Gold's Reserve Currency Status Suggests Grains Are Grossly Undervalued
10/7/2025 | 10:54 AM CDT
By Mitch Miller, DTN Contributing Canadian Grains Analyst
Gold's record-breaking push over $4,000 per ounce Tuesday has gathered a lot of attention and interest -- and so it should. It could be simply speculation out of control; but it suggests something more serious -- a lack of confidence in currencies around the world and concern over real inflation. That has certainly appeared to have restored its reputation as the ultimate reserve currency... to many anyway.
But this post is not about the gold fundamentals or a debate over its fair market value. It's about pointing out how grossly undervalued grains and oilseeds are in comparison to that ultimate reserve currency.
As you can see from the accompanying chart, as of Tuesday, you can buy almost 950 bushels of corn with the value of one ounce of gold (using nearby futures prices for both). To demonstrate how undervalued that is, as recently as early 2022, you could only buy about 235 bushels. But more importantly, comparing difficult financial times to each other -- during the price stresses found at the end of the last decade, only 600 bushels of corn could be purchased with an ounce of gold. And much worse yet, when the ag economy almost collapsed along with many individual farms in the mid-1980s, an ounce of gold could only buy 289 bushels of corn at its lowest value. In other words, corn is worth less than a third of what it was relative to gold during the mid-1980s agricultural crisis.
It doesn't get any better when you consider the same comparisons for soybeans. One ounce of gold on Tuesday could buy a record 392 bushels of soybeans, the latter is so cheap relatively speaking. When soybeans hit their high in early 2022, an ounce of gold could only buy 110 bushels. But comparing the bad to the bad -- prior to the price of soybeans climbing at the start of the decade, you could only buy 225 bushels with an ounce of gold. And as seen in corn, the agricultural economic crisis of the mid-1980s had one ounce of gold only being able to purchase 89 bushels of soybeans. And yet it can buy 392 bushels now.
Wheat shows the same story of a grossly undervalued staple of life. One ounce of gold can now buy almost 785 bushels of wheat compared to just 170 bushels during the peak price tied to the initial days of the Russian invasion of Ukraine. In the mid-1980s, an ounce of gold was only able to buy 181 bushels of wheat at its lowest value.
Looking at canola for my Canadian followers, it is obviously not much better. An ounce of gold can now buy over 6.5 metric tons (mt) of canola compared to just 1.6 mt in early 2022. Comparing bad apples to bad apples, the least value seen in gold terms was in early 2020 when just over 4 mt of canola could be purchased with an ounce of gold.
I realize this does nothing to help morale or the difficulty of the situation; but it does highlight just how grossly undervalued grains and oilseeds are when compared to the ultimate reserve currency. Something that may soon gain the attention of financial money managers that have a vested interest in hedging against inflation. And maybe even gain the attention of those who were convinced most of the summer that a big crop should have meant lower crop prices. Maybe that is not so any longer in this light.
**
I welcome feedback along with any suggestions for future blogs. My daily comments can be found in Plains, Prairies Opening Comments and Plains, Prairies Quick Takes on DTN products.
Mitch Miller can be followed on social platform X @mgreymiller
(c) Copyright 2025 DTN, LLC. All rights reserved.
Regarding image -- If gold truly is the ultimate reserve currency, then comparing grains and oilseeds to gold shows how grossly undervalued they are. This shows almost 950 bushels of corn can be purchased with the value of one ounce of gold compared to just 235 bushels at the start of 2022. (DTN ProphetX chart)?
Canada Markets
Gold's Reserve Currency Status Suggests Grains Are Grossly Undervalued
10/7/2025 | 10:54 AM CDT
By Mitch Miller, DTN Contributing Canadian Grains Analyst
Gold's record-breaking push over $4,000 per ounce Tuesday has gathered a lot of attention and interest -- and so it should. It could be simply speculation out of control; but it suggests something more serious -- a lack of confidence in currencies around the world and concern over real inflation. That has certainly appeared to have restored its reputation as the ultimate reserve currency... to many anyway.
But this post is not about the gold fundamentals or a debate over its fair market value. It's about pointing out how grossly undervalued grains and oilseeds are in comparison to that ultimate reserve currency.
As you can see from the accompanying chart, as of Tuesday, you can buy almost 950 bushels of corn with the value of one ounce of gold (using nearby futures prices for both). To demonstrate how undervalued that is, as recently as early 2022, you could only buy about 235 bushels. But more importantly, comparing difficult financial times to each other -- during the price stresses found at the end of the last decade, only 600 bushels of corn could be purchased with an ounce of gold. And much worse yet, when the ag economy almost collapsed along with many individual farms in the mid-1980s, an ounce of gold could only buy 289 bushels of corn at its lowest value. In other words, corn is worth less than a third of what it was relative to gold during the mid-1980s agricultural crisis.
It doesn't get any better when you consider the same comparisons for soybeans. One ounce of gold on Tuesday could buy a record 392 bushels of soybeans, the latter is so cheap relatively speaking. When soybeans hit their high in early 2022, an ounce of gold could only buy 110 bushels. But comparing the bad to the bad -- prior to the price of soybeans climbing at the start of the decade, you could only buy 225 bushels with an ounce of gold. And as seen in corn, the agricultural economic crisis of the mid-1980s had one ounce of gold only being able to purchase 89 bushels of soybeans. And yet it can buy 392 bushels now.
Wheat shows the same story of a grossly undervalued staple of life. One ounce of gold can now buy almost 785 bushels of wheat compared to just 170 bushels during the peak price tied to the initial days of the Russian invasion of Ukraine. In the mid-1980s, an ounce of gold was only able to buy 181 bushels of wheat at its lowest value.
Looking at canola for my Canadian followers, it is obviously not much better. An ounce of gold can now buy over 6.5 metric tons (mt) of canola compared to just 1.6 mt in early 2022. Comparing bad apples to bad apples, the least value seen in gold terms was in early 2020 when just over 4 mt of canola could be purchased with an ounce of gold.
I realize this does nothing to help morale or the difficulty of the situation; but it does highlight just how grossly undervalued grains and oilseeds are when compared to the ultimate reserve currency. Something that may soon gain the attention of financial money managers that have a vested interest in hedging against inflation. And maybe even gain the attention of those who were convinced most of the summer that a big crop should have meant lower crop prices. Maybe that is not so any longer in this light.
**
I welcome feedback along with any suggestions for future blogs. My daily comments can be found in Plains, Prairies Opening Comments and Plains, Prairies Quick Takes on DTN products.
Mitch Miller can be followed on social platform X @mgreymiller
(c) Copyright 2025 DTN, LLC. All rights reserved.
Regarding image -- If gold truly is the ultimate reserve currency, then comparing grains and oilseeds to gold shows how grossly undervalued they are. This shows almost 950 bushels of corn can be purchased with the value of one ounce of gold compared to just 235 bushels at the start of 2022. (DTN ProphetX chart)?
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