USDA Forecasts Corn and Soybean Prices Amid Global Market Volatility

The USDA's World Agricultural Supply and Demand Estimates report is due on August 12, and it will include forecasts for corn and soybean cash prices received by farmers. These projections are averages, not a range of possible prices, which can fluctuate between highs and lows.

The government used to publish a range for its estimates, but the system was changed in May 2019 after analysts pointed out flaws in the methodology. However, it's still possible to translate the government's averages into a price range by considering various factors that could drive these extremes.

Bryce Knorr, Contributing market analyst for Farm Futures, has developed a series of variables to create price ranges for both crops. His models project an average cash price for corn of $4.12, with a wide range from $1.80 to $6.44 depending on crop yields and demand.

For soybeans, Knorr's model suggests an average price of $10.24, ranging from $4.54 to $12.41. He considers factors such as China's soybean imports, corn ethanol production, and the health of the livestock industry, which affects corn demand. If times are tough, consumers may opt for cheaper protein sources like poultry or fish instead of beef.