Melvin Brees
Farm Management Specialist
University of Missouri Extension




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February 23, 2001

Early Looks at 2001 Crops

$1.65 or $2.40 corn? $4.05 or $6.00 soybeans? These are among possible prices, suggested by some market analysts, depending upon what happens with weather (supply) and demand during the upcoming year. That's a range of 75 cents for corn and nearly two dollars for soybeans--they ought to be in there somewhere!

FAPRI (Food and Agricultural Policy Research Institute) at the University of Missouri recently issued their February baseline report that includes their projections for 2001 crops. They expect a shift of about 1.5 million acres of corn to soybeans compared to last year (2000). Assuming average weather and yields of about 136 bpa corn and 39-40 bpa soybeans, FAPRI baselines project a slightly smaller corn crop in 2001 and another record soybean production year. In spite of somewhat smaller production, total corn supply would still be large at nearly 11.6 billion bushels and record setting soybean supplies would be more than 3.2 billion bushels. FAPRI expects demand to remain strong with record use for both corn (9.863 bil. bu.) and soybeans (2.875 bil. bu.). The corn demand numbers include a reduction in feed use along with stronger industrial use and increased exports. Both domestic and export increases are anticipated for soybeans.

What's the bottom line? FAPRI expects ending stocks for corn to drop about 130 million bushels (estimated 1.719 bil. bu.) resulting in somewhat higher prices averaging about $2.05. Soybean ending stocks would continue to grow (393 mil. bu.) and prices would average about twenty-cents less or about $4.53. Other market analysts are coming up with similar numbers and price projections ($1.85-$2.10 corn, $4.30-$4.50 soybeans) assuming normal weather and no demand surprises.

Excellent weather producing larger crops or disappointing demand would result in much lower prices. Some analysts believe total corn supplies could rise to over 12 billion bushels and, with increased yield and/or a larger acreage shift, soybean supplies as large as 3.6 billion bushels could occur. These increases lower average corn price estimates to $1.65-$1.80 and might depress soybean prices to near $4.00.

Poor weather and/or unexpected increases in demand could produce higher prices. Slightly lower ending corn stocks are already anticipated with average weather. Most agree that poor weather, with lower yields, could result in significantly tighter corn supplies and potential average prices near $2.40. While soybean supplies remain large, record consumption is also using up much of the supply. Any reductions in production expectations, in the face of strong demand, could quickly cause volatile prices which some say could reach $6.00.

While there is a wide price range and a lot of uncertainty in these projections, they provide a starting point for new crop marketing plans. Higher prices are possible and no one wants to miss them, especially if weather reduces yields, but they don't appear likely. Early season plans need to be very flexible to deal with potential surprises, but targeting early sales at prices above the expected averages (more than $2.05 corn or $4.53 soybeans) is probably a good place to start. --Melvin

University of Missouri ExtensionDecisive Marketing - February 23, 2001 -- Revised: April 20, 2004