Global demand to keep corn and soybean prices supported

Global corn and soybean prices are likely to remain relatively firm in the coming months, supported by strong demand for grains and oilseeds. At the same time, any deterioration in weather conditions across key U.S. growing regions could provide additional support to the market, according to Chad Hart, professor of economics at Iowa State University.

Although drought conditions persist in parts of the eastern and western United States, the country’s main corn and soybean producing areas have so far avoided severe weather impacts. Localized flooding has occurred in some parts of the Corn Belt, but its scale is not yet significant enough to materially affect overall crop production.

Hart noted that July is the most critical month for determining corn yields, while soybean production will depend primarily on weather conditions in August and September. Should extreme weather develop during this period, grain markets could quickly respond with higher prices. For now, however, weather risks remain relatively limited.

Global demand continues to provide strong market support. Following USDA’s July WASDE report, soybean prices remain near $12 per bushel, while corn is trading in the $4.30–4.50 per bushel range. Rising global demand for animal protein is boosting feed consumption, helping keep prices supported despite expectations for a large U.S. harvest.

According to USDA, U.S. corn ending stocks declined by approximately 125 million bushels from the previous month due to stronger exports to the European Union, the Middle East, and Africa. At the same time, U.S. soybean exports increased by around 30 million bushels, while domestic demand continues to grow on expanding biofuel production.

Despite higher soybean crushing volumes, which would normally pressure soybean meal prices, strong global demand for feed is preventing a significant decline. Hart also noted that even after USDA raised its U.S. soybean production forecast, global ending stocks are expected to remain relatively stable because consumption continues to increase.

According to Hart, a favorable U.S. growing season could put some downward pressure on prices once the new crop reaches the market this autumn. However, resilient global demand and tightening corn inventories are expected to limit the downside, allowing current price levels to remain broadly supported through the end of the year.

Tags: corn, prices, soybean, USA