HOW BIG ARE THE CORN AND SOYBEAN CROPS NOW?
Corn and soybean prices continue to move higher in anticipation of yield reductions due to adverse weather conditions in the U.S. Soybean prices are also being supported by indications that acreage in the U.S. fell short of March intentions, by crop concerns in China and India , and by a rapid rate of consumption of the 2004 crop. Corn price strength has been much more modest than the increase in soybean prices due to large current stocks and indications that U.S. acreage exceeded March intentions. As prices move higher, it is useful to try to estimate the U.S. crop size that is reflected by current prices. Obviously, a precise estimate cannot be made because other factors are influencing price. In addition, the relationship between crop size, consumption, and price varies over time. Still, prospective crop size is a useful question to pursue. As a starting point, USDA’s current projection of the level of stocks at the beginning of the 2005-06 marketing year and the magnitude of consum
