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Good: Corn, soybeans have some unfinished business

By Darrel Good
Department of Agricultural and Consumer Economics
University of Illinois
USDA's September corn and soybean production forecasts were reasonably close to the average trade guesses reported before the release of the September Crop Production report, according to Darrel Good, University of Illinois ag economist.
Prices will likely continue to be unsettled as harvest reports become more numerous and the market forms expectations about the October production forecasts.
At this juncture, there is a high probability the 2013 U.S. corn crop will be large enough to result in a meaningful increase in stocks by the end of the current marketing year. Prospects of ample supplies point to an average marketing year farm price in the mid $4.00 range. Cash prices would be expected to follow a typical large-crop pattern of establishing lows at harvest time followed by modest increases that would about cover the cost of storage.
Soybean prices are expected to remain high relative to corn prices, with a marketing year average farm price in the high $12.00 range. The price pattern for soybeans may follow more of a short-crop pattern, however, particularly if the production forecast declines in October. Such a pattern would point to the highest prices at harvest and declining prices as consumption adjusts and the South American crop advances. Read more ...