Corn and soybean prices declined sharply in mid-November and remained at the lower level through mid-December. From mid-December through early January, the cash price of corn in central Illinois increased by $0.78 while the cash price of soybeans increased by $1.21 per bushel.
One of the factors that has contributed to higher prices is adverse weather in parts of Argentina and southern Brazil during a critical phase of crop development. Periods of extremely high temperatures and well below average levels of precipitation in December have threatened both the corn and soybean crops in those areas. The adverse weather followed very favorable weather conditions in November. The weather pattern in those areas has been similar to that of 2008-09 when corn and soybean production was substantially reduced in Argentina. Some beneficial rainfall in the dry areas is expected this week, but the forecast calls for a return of hot, dry weather next week. It is difficult to assess potential corn and soybean production in Argentina and Brazil, but the pattern of production estimates in 2008-09 might provide some guidance. <Read More>
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