Purdue University Agricultural Economist Chris Hurt says corn prices could go up in 2016 but soybean prices may not follow. Hurt says there is potential for a stronger market for corn after early-season flooding in 2015.
Hurt’s analysis in the Purdue Agricultural Economics Report says cash could reach the low-$4 range per bushel at processing plants in the coming months and could go as high as $4.40 per bushel next summer. He says soybean prices are likely to remain flat or slightly decline, especially if there is a strong harvest in South America and U.S. farmers devote more acreage to soybeans next year.
"Corn prices are expected to increase in the winter and next spring by at least enough to cover on-farm storage costs," says Hurt. "Eastern Corn Belt basis levels are expected to remain very strong, especially in Indiana where low yields were dominant in the northern two-thirds of the state. Greater soybean acreage in 2016 may keep soybean prices depressed, maybe at levels that are not much different from the 2015 crop. Soybean prices are thus expected to stay well below total production costs."
Hurt says a strong dollar could hold grain prices in check because the currencies of foreign buyers are weak and have reduced buying power for U.S. farm products. He adds the currencies of the country’s export competitors are also weak which makes their corn, soybeans and wheat more price-competitive.
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