|By LINDA McGURK
WEST LAFAYETTE, Ind. — Corn producers are not the only ones entering record contracts in the current bullish agricultural commodities market. Wheat, soybean and sorghum growers are enjoying high prices as well.
Corn and wheat set the trend and the soybeans followed, according to Chris Hurt, agricultural economist at Purdue University. World inventories of soybeans are still large, and the USDA has predicted a record year for the crop, with a production forecast at 3.2 billion bushels and a season-average price of $5.90 per bushel.
But Hurt said there will be a dramatic reduction of the surplus next year, since farmers are expected to increase their corn acreage at the expense of soybeans.
“When will (the price of) beans make a major move to the upside? Maybe not until planting season,” said Hurt. “A year from now, soybeans could be in the same place as corn is now. ... A cash soybean price of $7 is not unrealistic.”
Wheat prices are expected to reach a 10-year high in October due to a devastating drought in Australia and fears of declining world production at a time when global stocks are still at a historical low. USDA currently forecasts wheat at a season-average of $4.35 per bushel.
Ending stocks are estimated at 418 million bushels, 27 percent lower than last year and the smallest stock since the mid-1990s.
Sorghum prices have benefited from low yields, a reduction in acreage and a favorable export market, according to the National Sorghum Producers.
Elevator bids for sorghum, which normally trades around 5 cents under corn, have traded at 10-15 cents higher than corn in some areas, and up to 70 cents more than corn for exports. USDA’s November season-average projections put sorghum prices in line with corn estimates at $3 per bushel.
This farm news was published in the Nov. 15, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.