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A farmdoc daily analysis reviews USDA's May 10 new-crop corn and soybean forecasts and sizes up downside risk. It warns that if optimism about U.S. biofuel demand fails to materialize, processing capacity could create an oversupply of corn and soybean feedstocks.
The author notes the 2005-2010 biofuel boom as a precedent and says the potential price impact is likely smaller than typical production shocks.
A shortfall in biofuel demand would cut feedstock use and weigh on corn and soybean prices. The analysis frames this as a downside risk rather than a current price driver.
farmdocdaily.illinois.eduHongxia JiaoMay 14, 2024After 788 past bearish report events, Soybeans moved a median -0.3% over 5 sessions (47% higher; middle half -2.0% to +1.5%), and -0.9% over 20.
After 1,102 past bearish report events, Corn moved a median -0.2% over 5 sessions (47% higher; middle half -1.8% to +1.3%), and +0.0% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
