Online S/D Balance Sheets Give Price Forecasts

A good web site for grain producers to bookmark is Robert Wisner’s home page, www.econ.iastate.edu/faculty/wisner. Wisner is an extension ag economist at Iowa State University.  Among the many useful links on Wisner’s web site is the link “Balance Sheets” as a PDF.   Here, Wisner keeps track of corn and soybean (limited wheat) supply/demand numbers, and gives different price scenarios that might be possible during the course of the marketing year under a below-average crop, average crop, and above-average crop.

Wisner updates his balance sheets monthly. The following table sums up his S/D-based price scenarios as of July. Bear in mind that these ranges – like any price forecasts – are just projections, highly dependent upon unknown and changing market factors such as weather, supply, and demand.

	Below Avg S/U	Avg S/U	Above Avg S/U
Corn, 2005-06
Harvest price central Iowa	$2.10	$1.70	$1.60
Dec futures @ harvest	$2.55	$2.18	$2.10
Long-term prob. of these price forecasts	18%	60%	22%
Soybeans 2005-06
U.S. wtd avg price	$7.90	$5.90	$5.70
NC Iowa harvest price	$7.80	$5.60	$5.35
Nov futures @ harvest	$8.25	$6.05	$5.80
Historical probability	20%	65%	15%
Wheat 2005-06
Production	2.144 bil	2.208 bil bu	2.237 bil bu
USDA July production estimate: 2.208 bil bu
Total Supply	2.759 bil bu	2.818 bil bu	2.841 bil bu
USDA July total supply estimate: 2.818 bil bu
Total Use	2.128 bil bu	2.139 bil bu	2.150 bil bu
USDA July total use estimate: 2.118 bil bu
Carryover	631 mil bu	679 mil bu	691 mil bu
USDA July carryover estimate: 700 mil bu (619 mil bu in June)
Avg U.S. farm price	$3.10	$2.95	$2.90
USDA July estimate avg U.S. farm price: $2.60 –3.10