5 Factors That Could Push Corn Prices Down

July 8, 2016 05:00 AM

Will growers have to deal with the pain of corn prices again falling below a break-even point this year?

Unfortunately, yes, according to Scott Irwin and Darrel Good, agricultural economists at the University of Illinois at Urbana-Champaign.

During a farmdoc Daily webinar, they forecast an average price of $3.75 for corn,  which is below the typical break-even price of $4.

“It’s a bear market for corn (and) on the bull side for soybeans,” observed Irwin. The June 30 USDA report “was  definitely a bearish surprise to the market and the main implication (was) for the level of feed and residual use for corn,” he said.

Here are five factors that could push corn prices down, according to the team at farmdoc Daily.

1. Record corn stockpiles of 4.722 billion bushels, roughly 200 million bushels larger than the trade expected.

2. Decreased use of corn to make ethanol, with sorghum taking its place.

3. Bumper wheat crops that compete with corn for livestock feed.

4. Lower feed and residual use.

5. Decreased corn exports due to slowdown in global economy.

The soybean market is relatively bullish, thanks to strong demand from China, with the average price of soybeans forecast at $10.40, according to the presenters.





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Spell Check

Plains, GA
7/8/2016 01:13 PM

  Very insightful article only if it was written two months ago

7/8/2016 07:01 AM

  Amen brother

Bruning, NE
7/8/2016 06:50 AM

  Getting real sick of all the so called expert opinions out there. At the end of the day they know no more than the average 4th grader. They are consistently wrong and have about as much certainty as the weatherman. My advise to these folks is go get a real job and let the markets do as they may. Or at least the direction the government manipulation sways them to go. Those who don't think the gov don't manipulate markets are fooling yourself. Ask yourself why they don't ever use fsa information in their reports. Does that make any sense to anybody?They don't want accuracy. Doesn't leave them enough room for their bs.