Odds Favoring Lower Corn and Soybean Prices Ahead

URBANA, IL – Agricultural economists at the University of Illinois are trying to determine the potential for lower harvest time prices on corn and soybean futures contracts.

Current harvest-time futures contracts have been well above $6 per bushel for corn and $14 for soybeans for the past few months, a welcome relief from lower prices since 2013.

Unfortunately, nothing cures higher prices like higher prices so some farmers are concerned about the potential of price declines through the growing season. According to the FarmDoc web-based tool, the economists determined a 9 percent chance of corn prices declining by more than $2 per bushel and a 20 percent chance of soybean futures falling by more than $2 per bushel.

The Price Discovery Tool calculates a 30 percent chance of a decline of more than $1 in both corn and soybean prices in 2021.

Current market conditions suggest that downside price risks for 2021 are larger compared to recent years. Still, according to the FarmDoc report, the chances of having good prices in 2021 are high, especially if there is any yield shortfall for either crop.

Read more at FarmDoc Daily.
(SOURCE: All Ag News)