Ag Informer – Fall Commodity Price Forecast

Blog by Gary Schnitkey, Krista Swanson, and Nick Paulson, Department of Agricultural and Consumer Economics, University of Illinois and Carl Zulauf, Department of Agricultural, Environmental and Development Economics, Ohio State University

Corn and soybean prices for 2022 fall delivery are at high levels. During the first two weeks in May, fall delivery bids in central Illinois averaged $7.39 per bushel for corn and $14.52 for soybeans. Significant changes in prices going into fall are possible.

History suggests that there is a 5% chance that cash prices for corn in October will be below $4.60 per bushel. There is a 5% chance of cash prices below $10.56 per bushel for soybeans. Conversely, there also is a chance of higher prices. There is a 5% chance that October cash prices exceed $10.50 per bushel for corn and $18.49 for soybeans.

Framework Used to Evaluate Possible Price Changes
Our objective is to present possible fall prices for corn and soybeans. To do this, we evaluated changes in both futures and cash prices from May to October. The analysis provides a perspective on both futures and cash markets. While futures and cash prices are highly correlated, cash prices tend to move down more in years of falling prices. Analyses are first presented for corn in the following section and then for soybeans in the second.

Table 1 shows historical prices from 2001 to 2021. The panel labeled “May” gives average prices during the month of May and includes three columns. The “Dec CME” column shows the average settlement prices of the December Chicago Mercantile Exchange (CME) contract. From 2001 to 2021, futures prices averaged $4.00 per bushel. For the first two weeks of May in 2022, the December contract has averaged $7.39, well above the historical averages.

The $7.39 average was the highest of all prices since 2001. In May, the fall delivery price for central Illinois averaged $3.74 per bushel from 2001 to 2021 as shown in the “Fall Delivery Bid” column. The “Basis” column shows the difference between the futures and fall delivery price averaged -$.26 per bushel. There is variably in the basis, ranging from -$.50 in 2008 to -$.13 in 2012. In 2022, the basis is -$.29 per bushel.

To view the complete report, click here.

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