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Both good and bad implications from the Grain Stocks report

Ag economists from the University of Illinois say the USDA’s recent Grain Stocks report has both good and bad implications for corn and soybean prices.

Todd Hubbs says their balance sheets for the 2017/18 marketing year indicate a smaller corn crop and much larger soybean crop.  “We expect the corn stocks to decline modestly and the soybean stocks to become a surplus,” he says.  “We’re looking at unchanged to higher corn prices in 2017/18 and what looks to be significantly lower soybean prices for the same marketing year.”

Darrell Good says a price rally in corn could entice farmers to switch back to planting more corn acres – but it would have to happen sooner rather than later.  “At this juncture the market still favors soybeans over corn in many locations,” he says.  “And unless we see those ratios change dramatically – I don’t think price will be the deciding factor.  I think it will be weather more than anything else.”

The USDA’s Prospective Plantings report showed 4 million fewer acres of corn and 6 million more acres of soybeans.