Soybean price projections up 90 cents

WEST LAFAYETTE, Ind. — The U.S. season-average soybean price is forecast at $9.25 per bushel, up 90 cents from last month, according to U.S. Department of Agriculture estimates.

Corn prices were raised 40 cents to $3.50 per bushel.

Soybean production is projected at 4.3 billion bushels, down 112 million on a lower yield forecast of 51.9 bushels per acre. Yield is down 1.4 bushels per acre from the August forecast.

Corn production is forecast at 14.9 billion bushels, down 378 million from last month. Corn ending stocks were lowered 253 million bushels from last month.

“The ending stock chart for soybeans really looks encouraging,” said James Mintert, professor and director of the Center for Commercial Agriculture at Purdue University.

“As a soybean producer, you have to like the trend on that chart in terms of the improvement in reduction on ending stocks.

“The USDA did raise their marketing year average price forecast by 90 cents a bushel today. That’s a big number, a big move, in one month. It has changed the profitability picture.”

In order for corn prices to get above $3.50 per bushel there would need to be one of three scenarios, Mintert said.

Corn yields would need to be lower than USDA forecasted, exports would need to strengthen or ethanol would need to recover more rapidly than anticipated.

Although it’s unlikely for corn prices to rise significantly, it’s possible, Mintert said.

“The storage opportunity and the storage returns at this stage look better for corn than soybeans,” he said. “The bottom line is, if you’re thinking about whether to store corn or soybeans, right now it looks like returns would favor corn.

“If you haven’t done much pricing, this looks like an opportunity to lock in at least a portion of your sales on soybeans, based on this rally.”