Aug 20, 2014
Home| Tools| Events| Blogs| Discussions Sign UpLogin

The $4-Corn Train Gains Speed

February 23, 2013
By: Sara Schafer, Farm Journal Media Business and Crops Editor
money train
  

It may be time to bid farewell to $6 and $7 corn. USDA’s estimates are showing support for much lower prices.

An average corn price near $4 is a great contrast to recent prices of $6 and $7. But, that’s what seems to be in the cards.

During its annual Agricultural Outlook Forum this week, USDA released estimates showing a dramatic drop in corn and soybean prices.

Here are the agency’s crop price predictions for 2013/14:

  • Corn: $4.80 (-33.3% drop from 2012/13)
  • Soybeans: $10.50 (-26.6% drop from 2012/13)
  • Wheat: $7.00 (-11/4$ drop from 2012/13)
  • Cotton: $15.20 (+2.0% increase from 2012/13)

 

Jerry Gulke, president of the Gulke Group, reminds producers that to have an average price of $4.80 this year, prices could drop even lower.

"We’ve been talking $4 for quite a while now," he says. Based on Friday’s market close, he believes the markets are starting to believe these price predictions.

A key reason prices will drop is the possible return to normal production. Joe Glauber, USDA Chief Economist, says the outlook for 2013 calls for a rebound in crop yields. "This will result in record production levels for corn and soybeans, and by autumn 2013, lower prices for most grains and oilseeds."

Here are USDA’s forecasts for 2013 acreage mix:

  • Corn: 96.5 million acres (-0.7% from 2012)
  • Soybeans: 77.5 million acres (+0.4 from 2012)
  • Wheat: 56.0 million acres (+0.5% from 2012)
  • Cotton: 9.8 million acres (-19.0% from 2012)
     

"High grain and oilseed prices support another year of large plantings for wheat, corn and soybeans. Combined acreage for those crops topped 230 million acres in 2012, the highest since 1982, and will likely approach similar levels for 2013," Glauber says.

READ MORE
Previous 1 2 Next

See Comments


 
Log In or Sign Up to comment

COMMENTS (1 Comments)

verbatime
Oh, sure I've seen the subsoil moisture regenerate over night out of thin air before... I see no reason why folks couldn't raise trend line yields. lol
7:47 AM Feb 23rd
 



Name:

Comments:

Receive the latest news, information and commentary customized for you. Sign up to receive the AgWeb Daily eNewsletter today!.

 
 
Enter Zip Code below to view live local results:
bayer
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions