Over the next several weeks, corn and soybean futures may continue to trade in a fairly narrow range with cash prices benefiting from some continued strengthening of the basis, said a University of Illinois Extension marketing specialist.
"More significant price variability is possible after the first of the year, with South American crop conditions being of most interest," said Darrel Good.
Good's comments came as he reviewed the corn and soybean markets which are shifting away from concerns about crop size.
"For the past six months, corn and soybean prices have been heavily influenced by the prospective size of the 2005 U.S. harvest," he said. "Now that crop size is pretty well known, other factors will have a larger influence on prices. These include the rate of consumption of the 2005 crop, prospects for Southern Hemisphere crops, and expectations about the magnitude of planted acreage in the United States in 2006."
Little is known at this time about the pace of domestic corn consumption, he noted. Currently, the pace of corn exports trail the rate needed to reach the USDA's projection of total exports for the year.
Through Nov. 17, corn exports totaled about 402 million bushels (estimated from weekly inspections reports). The total is almost identical to the total of a year ago.
"However, the USDA projects a 10 percent year-over-year increase in exports," said Good. "Weekly shipments have averaged about 36.1 million bushels per week. To reach the USDA projection of two billion for the year, shipments from now through August 2006 need to average about 39 million bushels per week.
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