Corn market could be vulnerable to supply jump
The 2012-13 season average soybeans price is projected at $11.50 per bushel, down from the $11.70 price average in the 2011-12 season.
Wheat planted area for 2012 is projected to increase 3.6 million acres to 58 million acres, up 3.6 million acres from a year ago.
The average price for wheat in 2012-13 is projected at $6.30 per bushel, down about $1 from the 2011-12 season.
Allen said key factors that will influence grain and oilseed prices include current growing conditions for soybean and corn crops in South America, the prices and weather in advance of U.S. spring planting, China’s soybean and corn import growth, global macro economic growth and the value of the U.S. dollar.
Future growth in China’s demand for soybean and corn is a major uncertainty that will affect U.S. prices, supply and demand.
Allen said the Ukraine has seen a “spectacular response” to high corn prices, with corn production there nearly doubling in 2011-12. Brazilian farmers are also expected to increase double-cropping of their land to produce corn, he said.