Despite Drought-Diminished Yields, Grain Prices Endure Drops

Traders and crop analysts are expecting Tuesday’s Crop Production report and World Ag Supply and Demand Estimates update to again reduce yields for this season’s corn and soybean harvest, with drought a key culprit.  The drought’s impact is reflected in the updated baseline projections released last week by the University of Missouri’s Food and Agricultural Policy Research Institute.  However, Director Pat Westhoff notes that even with the prospect of reduced production, prices haven’t risen and instead, are trending lower.

Worse, the baseline projection for corn receipts is tumbling, with FAPRI now projecting an average cash price of $4.94 over the next year, down $1.64 per bushel from last year, with a further drop to $4.47 predicted for the following year.  Soybeans are projected to slide $1.32 per bushel to $12.88 this fall, followed by a larger slide for 2024 to $10.94.  Westhoff says the pain of those slides are compounded by rising input costs.

University of Missouri FAPRI Director Pat Westhoff notes that increased production in Brazil and China are helping to place downward pressure on cash grain prices.