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By Simon Constable Order Reprints Print Article U.S. corn inventory at the end of the 2020-21 growing season will be 1.3 billion bushels, far lower than the 1.7-billion-bushel level expected Nicolas Tucat/AFP via Getty Images Text size
A drop in corn production will result in reduced supplies of the grain, propelling prices higher over the next few months, experts say.
U.S. corn inventory at the end of the 2020-21 growing season will be 1.3 billion bushels, far lower than the 1.7-billion-bushel level expected by the U.S. Department of Agriculture, says Shawn Hackett, president of Hackett Financial Advisors.
“The USDA’s projection needs to come down,” he says. “The corn market has not priced in a 1.3-billion-bushel carry-over and will have to reprice that reality.”
By Simon Constable Order Reprints Print Article
A combine being used to harvest the corn in a field at the Hansen Family Farms in 2019 in Baxter, Iowa. Joe Raedle/Getty Images Text size
Recent unseasonably dry weather in South America, and worries that the lack of moisture will continue, could propel soybean prices more than 40% higher in the first quarter of 2021.
“South America is a little too dry and uncomfortably dry,” says Sal Gilbertie, founder and CEO of commodity exchange-traded fund company Teucrium Trading. “We could have a serious lowering of the crop estimates over the next three months.”
Such continuing dryness could cause irreparable damage to this year’s Brazilian soybean crop and send futures prices for the grain as high as $18 a bushel, up from $12.43 recently, according to a recent Teucrium report. Brazil is the largest soybean exporter. That would follow an already spectacular rally, up from $8.22 in March, says M