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Grain prices have been highly volatile – but quite strong – during most of 2011, with a fairly significant decline in corn and soybean prices during the last three months of the year. On Dec. 16, nearby CBOT corn futures closed at $5.83/bu., compared to $5.96 a year ago. January CBOT soybean futures closed at $11.30/bu., compared to $12.98 in mid-December 2010. The near-term CBOT prices on Sept. 12 were $7.45/bu. for December corn futures and $13.96 for November soybean futures. The rise in corn and soybean prices during the first nine months of 2011 were driven by steady domestic grain demand for the renewable fuel industry and for livestock feed needs, along with very strong export demand. The fairly sharp decline in grain prices since mid-September is due to slightly increasing grain stocks, financial uncertainty in the U.S. and abroad and a softening of export markets.
Local cash bid prices for corn in southern Minnesota were near or above $6 at many locations throughout much of 2011, until the past couple of months, reaching $7 on several occasions during the summer months. However, local corn prices have now declined to near $5.60/bu., as of Dec. 16. Cash soybean prices stayed near or above $13/bu. until mid-September, and have declined ever since down to the current level of about $10.85. By comparison, at this same time in recent years, local cash corn prices were near $5.50 in 2010, $3.50 in 2009 and 2008, and around $4 in 2007. Local cash soybean prices were about $12.70 in mid-December 2010, $9.80 in 2009, $8.25 in 2008, and $10.85 in 2007.
The higher level of grain prices during much of 2011 has helped most crop producers have a fairly profitable year in 2011. Many producers forward priced a significant portion of their 2011 corn and soybean crop prior to the price drop this past fall. Grain farmers were also able to capture some very favorable prices on their remaining 2010 corn and soybeans that were stored after harvest, and sold during 2011.