By Tom Collins
TORONTO — Corn and soybean prices have likely plateaued until December when we’ll know the true size of the U.S. harvest, says a grain merchant for Toronto-based Parrish and Heimbecker.
The record lows in August were probably the worst we’ll see, Steve Kell told Farmers Forum. But don’t expect the highs from 2012 and 2013. Grain corn ranged from $4.29 to $4.59 per bushel at North Gower Grains throughout most of September while soybean prices ranged from $11.83 to $12.52.
The United States Department of Agriculture is expecting a record corn and soybean crop this year and many analysts are expecting a world-record harvest for corn.
“The market will have trouble moving significantly higher or lower until we have some real knowledge of how big or small this crop really is,” said Kell.
Analysts are all over the map when it comes to predicting 2017 prices for corn and soybeans. Some see prices continuing to drop while others see better days ahead.
Dreyfus chief executive officer Gonzalo Ramirez Martiarena told Bloomberg News Sept. 15 that prices will continue to be low into 2017 because of bumper crops across the globe and in the U.S.
“Prices for wheat, corn, soybean will continue going down,” said Martiarena. “Corn yields are so good, productivity is so high in the U.S. that they keep planting despite low prices.”
University of Illinois agricultural economist Darrel Good told the University of Illinois News Bureau that a potential increase in soybean acres in the United States and an increase in South American production could farther drop soybean prices next year.
“With so much production uncertainty over the next 10 months, a strong pace of Chinese buying, and the recent history of smaller than expected year-ending stocks, it is not completely surprising that the market is not yet reflecting the potential for a growing surplus of soybeans during the 2017-18 marketing year,” said Good last month.
Not all projections are doom and gloom. Agrimoney.com reported Sept. 8 that France-based bank Société Générale believes the U.S. corn yield will be less than projected. The bank also called soybeans a value buy, and predicted soybeans will stay above US $10 (CDN $13.09) a bushel for the next year and that export demand will also be higher than the USDA projects.
Purdue University agricultural economist Chris Hurt said Sept. 23 that farmers are in the middle of a five-year period for low prices.
He projected slightly higher average prices in 2018 at US $3.80/bu (CDN $4.97) and $3.85 (CDN $5.04) in 2019.
