USDA’s August crop report painted the possibility of higher corn and soybean prices ahead, according to Bill Tierney, Kansas State University economist.
The report’s revisions from the July outlook boosted the midpoint of USDA’s price range forecast by $0.10 per bushel. Within hours of the report’s release, December corn futures contract prices had traded as high as $2.28, says Tierney.
USDA revised projections for 2003-2004 soybean supply-demand raised the midpoint for that crop’s expected price range by $0.20 per bushel to $5.05.
The supply-demand situation for both crops has some tricky questions, the biggest of which may be export demand, says Tierney. Corn exports are currently about 339 million bushels behind the 27-year average for the date and 50 million bushels under USDA’s July estimate.
In contrast, USDA raised its projection for soybean export demand to 1 billion bushels. Early August’s “new crop” sales, combined with the “old crop” commitments to be rolled over, already added up to 238 million bushels. That’s 23 percent of USDA’s export projection for the year, while the average for early August is 14 percent. It’s also 158 million bushels ahead of last year’s pace.