2013-14 Corn and Soybean Ending Stocks Heading in Different Directions
Corn and soybean projections are heading in opposite directions, creating shifting market dynamics
According to a news release from the American Farm Bureau Federation, the USDA’s September World Agricultural Supply and Demand Estimates (WASDE) report forecasts a large corn crop paired with smaller projected ending stocks for soybeans, causing the two crops to head in opposite market directions.
If realized, the 2013 projected corn crop of 13.84 billion bushels would be a record, and an increase of more than 3 billion bushels from 2012. The report predicts 2013-14 corn ending stocks to drastically increase to 1,855 million bushels, from 661 million bushels for 2012-13.
Similar results are not being projected for soybeans however, as the 2013 U.S. soybean crop is projected at 41.2 bushels per acre. “The projected marketing-year average price for soybeans is expected to decline from $14.40 per bushel for 2012-13 to $12.50 per bushel for 2013-14,” according to the release. Differing from recent years, soybean prices will be heading in a separate direction from corn projections.
Todd Davis, American Farm Bureau Federation economist, says in the release, “Market dynamics are changing compared to what farmers have seen over the last three years or so. Soybean prices have been following the corn market the last three years but are now poised to separate from corn. As corn stocks are projected to increase, the corn price will have limited upside potential as the market has to clear. Soybeans are projected to continue to have tight stocks, which will keep prices high enough to ration use throughout another marketing-year.”
A projected record corn crop paired with declining soybean estimates has created shifting market dynamics, as soybean prices are expected to separate from corn, according to the American Farm Bureau Federation release.