Corn and soybean prices continue to be influenced by a wide range of fundamental factors.  

Currently, those factors include prospects for the rate of economic growth and commodity demand in China, prospects for the size of the current South American crop, and prospects for the 2012 growing season in the Northern Hemisphere, according to University of Illinois agricultural economist Darrel Good.

“The USDA’s March 30 Grain Stocks and Prospective Plantings reports will also provide important fundamental information for both markets,” Good said.

“Anticipating the level of March 1 stocks has become increasingly difficult over the past year or more.

For corn, the difficulty lies in the erratic levels of implied quarterly feed and residual use since the spring of 2010. Stocks reports since then have provided a number of surprises.

“In the newsletter of March 5, some estimates of corn consumption during the December-February quarter this year and implications for March 1 stocks were outlined. A case can be made for stock levels in a wide range, but inventories within a few million bushels of 6.35 billion bushels would be consistent with the USDA’s projection of feed and residual use for the year,” he said.

Good explained that in the case of soybeans, the difficulty in anticipating stock levels is less pronounced but stems from the discontinuation of the monthly Census Bureau report of the domestic crush. Estimates of the monthly crush are reported by the National Oilseed Processors Association for its members, but not all processors are members.

“With exports for the quarter known, the quarterly stocks estimate will reveal total domestic disappearance, including seed, feed, and residual use, as well as the crush,” Good said.

“We anticipate March 1 stocks near 1.365 billion bushels. For both corn and soybeans, stock levels that deviate substantially from market expectations would have at least a short-term price impact.”

The Prospective Plantings report will contain important information about the potential size of the 2012 crops even though actual plantings may deviate from intentions, Good said.