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Sharp corn, soybean price drop ahead, firm says

06/13/2013 @ 1:06pm

Goldman Sachs lowered its price forecasts for U.S. corn and soybeans over the next 12 months, saying that domestic supplies will grow unless there is "a significant weather shock."

The firm set its three-, six- and 12-month corn price forecast at $4.75 a bushel, which it said was down from a prior forecast of $5.50.

It lowered its forecast for soybeans during that time period to $11 a bushel. While the firm did not specify its prior forecast, a May research note had projected soybean prices at $12.50 a bushel.

With large South American crops and weak global consumption, stockpiles are likely to rebound under most weather scenarios, Goldman Sachs said.

It added that under its "base case" scenario for supply and demand, it expects corn to fall as low as $4.25 a bushel while soybeans drop to $10.

"As a result, we currently view the downside potential to agriculture prices as the largest opportunity across the commodity markets we cover," the firm said.

Grain and oilseed prices surged after last summer's U.S. drought, which has created historically tight corn and soybean supplies heading into the fall harvest.

July corn futures at the Chicago Board of Trade were recently down 7 1/2 cents, or 1.2%, at $6.43 1/4 a bushel, while December corn was down 3 1/2 cents at $5.34.

July soybean futures were down 28 3/4 cents, or 1.9%, at $15.12 a bushel, while November soybeans were down 19 cents at $12.95 1/4.

Write to Ian Berry at ian.berry@dowjones.com
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(END) Dow Jones Newswires
June 13, 2013 13:52 ET (17:52 GMT)
DJ Goldman Sachs Sees Corn, Soybean Prices Falling Sharply->copyright

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