As expected, corn and soybean prices continue to move erratically in a very wide range. Just in the past week, both May 2011 corn and soybean futures had a 56¢ trading range. As the markets make the transition from old-crop to new-crop dominance, a lot of factors are influencing price expectations, says Darrel Good, a University of Illinois agricultural economist.
"For soybeans, the Census Bureau soybean crush report released on April 28 revealed that the March 2011 crush was about 10% smaller than that of March 2010. Through the first seven months of the 2010-2011 marketing year, the crush was 7.4% smaller than the crush during the same period last year," Good says.
For the year, the USDA has projected a decline of 5.8%. Last year, the crush was unusually large in the first half of the year and declined rapidly from April through August. The seasonal decline may be less pronounced this year. Still, the crush for the year may fall marginally short of the current USDA projection of 1.65 billion bushels, he notes.
"The pace of soybean exports and export sales has declined sharply, and export inspections during the weeks ended April 21 and 28 fell below the weekly rate needed to meet the USDA projection of 1.58 billion bushels for the year. Reports of ongoing measures in China to cool economic expansion, along with large South American supplies, suggest a continued slow rate of exports," he says.
Expectations about the 2011 U.S. soybean crop have centered on some planting delays for corn and the implication for soybean acreage. With corn planting likely to continue through May if needed, there is no strong indication yet that planted acreage of soybeans will deviate substantially from March intentions, Good says.
For corn, weekly export inspections remain well below the pace needed to reach the USDA projection of 1.95 billion bushels for the year ending on Aug. 31, 2011. Inspections need to average 42.9 million bushels/week to reach that projection. For the five weeks ended April 28, weekly inspections averaged 38 million bushels, he says.