MU Extension market outlook sees downward price trend for crops
With good weather in 2013 crop production could increase, pushing prices down.
“I think corn and beans are going to ratchet lower,” said University of Missouri Extension agricultural economist David Reinbott during the MU Spring Ag Marketing Conference.
“However, I would say between now and next July or August we’re probably going to get some opportunities to sell some crop with some spikes in prices, and if it does, I would be all over selling it, selling it hard,” he said.
The recent USDA crop report predicted 97.3 million acres of corn, down from the 99 million acres Reinbott projected in January.
“With the wet April and maybe even May, plus the snow and wet conditions in the Dakotas and upper Midwest, we might even lose another million or two,” Reinbott said.
USDA placed soybean acres at 77 million, which was below trade estimates, and 2 million less than Reinbott’s January projection.
“We could see some switching around, though,” Reinbott said. “Some of these corn acres that don’t get planted will go to soybeans, so it may go back up. Also, some of these wheat acres, especially spring wheat acres, could also go to soybeans.”
Ending stocks to use for corn are pretty tight, but Reinbott says the outlook is for a big crop that could push stocks up. Soybean ending stocks are also very tight, leading to a sideways trading range on the futures.
Following last year’s drought in South America, Brazil and Argentina have rebounded and are expecting large corn and soybean crops. Brazil is predicted to have a record corn crop, and both countries’ export numbers are expected to be up.
There have not been any major changes in wheat production, although feed use has dropped. World and U.S. ending stocks are down, but Reinbott says there is an ample amount of wheat compared to the last few years.
“We’re still in that down-trending market,” he said. “It’s sort of like a broken record. I’ve said it for the corn market, the bean market and the wheat market. We’re going to continue to trend lower.”