Corn and wheat demands on the decline

The prices of corn, wheat and soybeans dropped recently after the U.S. Department of Agriculture announced that high prices and tight supplies would hurt exports of the products this year.

Soybean exports are projected to total 40.7 million metric tons this year, which is lower than the original estimate of 42.2 million, partly because of a smaller crop and more competition from South American producers. Corn exports are forecast to dip from 48.5 million metric tons to 46 million due to high prices and tight supplies. Wheat exports are expected to increase from 34.8 million metric tons to 35.2 million, but producers will face stiff competition from foreign markets such as Russia and the Ukraine.

Part of this decline may be due to the weather in the Midwest, the largest U.S. growing region for corn and soybean crops. The area is suffering from arid conditions and will have a fairly low chance of significant rain over the weekend, reports Bloomberg.

According to the the news source, an MF Global report on the future of corn demand stated that "it is easier to substitute Argentine and Brazilian corn exports for U.S. exports. As long as the U.S. weather pattern remains dry, it could be supportive” to corn and soybean prices.