Marty Foreman, an economist with Doane Advisory Service, told Dairy Herd Management and food360 reporters today that corn prices are likely to remain low or drift lower into the harvest season. Foreman says the USDA probably will increase its estimate of the U.S. corn harvest when it releases its Crop Progress report this Friday, probably to around 13 billion bushels. That would represent an increase of 250 million bushels from the August estimate, and would result in a carryover of about 1.8 billion bushels.

Foreman says there has been some concern over the crop’s slow development leaving some areas susceptible to an early freeze. Recent warm weather, however, has helped crop maturity, and current weather forecasts do not indicate any chance of frost in corn-growing areas over the next couple weeks.

Prices might rebound slightly in the short term, but Foreman expects a general trend toward lower prices through harvest.

In the dairy market, Greg Scheer, an economist with Doane Advisory Service says there is still too much milk.   Scheer says there has been some discussion that the government will raise the cheese support price to $1.41 permanently.   The rise in the cheese support would roughly raise milk prices $1 from the temporarily increased cheese support price. “As a rule of thumb, every 10-cent increase in the price of cheese raises milk prices about $1.00,” notes Scheer.

Class III traders are less confident that Congress would make this change, or at least not to the $1.40 level, says Scheer. An increase would definitely have an effect on the market, but we will have to see what the level they decide or if they decide to raise the support permanently.

Scheer also noted that the recent Livestock, Dairy and Poultry reports indicate that there is a continued accumulation of dry milk powder in the European Union. This will likely pressure world prices, further reducing U.S. export prospects.