Crop Prices Rally Over Supply Concerns

Corn, soybean and wheat prices have experienced an impressive rally over the past month, but a price rally of this magnitude may be difficult to sustain, said a University of Illinois Extension agricultural economist.

“From the lows in late June to the high on August 2, December 2010 corn futures rallied nearly $.75, November 2010 soybean futures rallied $1.40, and September wheat futures rallied $2.55,” said economist Darrell Good.

The increase in prices was triggered by the June 30 USDA reports showing smaller-than-expected June 1 domestic inventories of corn and soybeans and smaller-than-expected planted acreage of corn, he said.

According to Good, June 1 wheat inventories were larger than expected, but prices increased based on prospects for smaller crops outside the U.S.