Minnesota Farmer


Corn, soybean price prospects

I was at a marketing meeting this morning and I can tell you the picture painted of the future of corn and soybean prices was bleak.  We have too much corn and soybeans in the world, and the news just keeps getting worse.

Although soybean prices are currently about $12.20, futures prices for January 2015 are at $10.50.  With the world glut of soybeans prices are expected to drop even more.Soybeans MonthlyNow soybeans are not that low historically.  They are still trading over $10 per bushel when I remember them trading at more like $5.00 for most of my life.   Still they are down from the rarefied air of $15.00 plus.

Current corn prices are not so friendly with both current and January prices near $3.50.  Corn news is also bad.  China is supposed to have most of the corn stocks on hand since they purchased so much in the last few years and are holding on tight.  That means that we cannot count on China to buy anymore corn soon, and they might even start selling some of their stocks.corn monthlyCorn has really dropped being less than half of its historical high of only two years ago.  Some are wondering if it will even stop when it gets below $3.00.  This would get them back to my lifetime memories of selling corn around $2.00 or less.  That would be a real drop.

There is an old adage that the cure for high prices is high prices, and that is indeed true.  Currently corn and soybeans are being grown in places it has no business being grown.  High prices pushed out other crops and even some grass and forest land.  Now, with no drought in sight, and a good supply of corn and soybeans on hand, some people are going to go out of business.  There will be pain, but when it is all over, things will be much better for all.  The gung-ho, fencerow to fencerow, plant every acre available times are over.  These lower prices are going to push corn and soybeans back from the fringes and return it to those who can grow it best.  I just hope I’m still here when it all shakes out.

Michael

 

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