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December 11, 2012

Will corn and soybean prices return to pre-drought levels?

March 2013 corn futures dropped below $5.50 in early May 2012 and were drifting lower when U.S. drought conditions turned prices higher starting in mid-June.  The price of that contract peaked in early August, just short of the $8.50 mark.  March 2013 soybean futures dropped below $11.50 in December 2011before South American drought conditions and then U.S. drought conditions sent that contract above $17.25 by mid-September 2012.  Corn prices have declined by more than $1.00 since the late summer peak, while soybean prices have declined by more than $3.00.  The general expectation has been that prices of both commodities would return to pre-drought levels as early as 2013 as consumption adjusted to the lower supplies and as production rebounded in both South America and the U.S.  Read More

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