Massive crops to pull down market prices for year ahead
Corn, soybean and wheat growers will see the lowest farm-gate prices for their crops in several years, says USDA in its first forecast of the fall harvest. The soybean crop would the the second-largest ever and the corn crop would be the third-largest. They come on the heels of record-setting corn and soybean crops last year. The result will be huge stockpiles that will weigh on prices through next fall.
This year’s soybean crop will sell for a season-average soybean price of $9.15 a bushel, the lowest in nine years, said USDA. It forecast the 2015 corn crop will fetch an average $3.65 a bushel and wheat, $5.10 a bushel. The corn and wheat prices would be the lowest in six years.
The forecasts underline the cloudy outlook for commodity prices for the near future and, by extension, continued pressure on farm income. USDA has forecast net farm income will fall by 32 percent this year from its 2014 level because of low crop prices. USDA will update its farm income forecast on Aug 25.
USDA’s forecasts for corn and soybeans were much larger than traders expected while its cotton forecast was much smaller. “U.S. agriculture markets went wild today,” says Quartz in a chart that shows sharp gyrations in futures prices.