On-going crop concerns could add to recent price strength in both corn and soybeans, and higher prices should probably move pricing strategies to less storage and more harvest-time pricing, according to University of Illinois Economist Darrel Good.

December 2009 corn futures have increased by about $.65 per bushel form the early September low. November 2009 soybean futures have rallied more than $1.00 per bushel from the low of earlier this month.

"These higher corn and soybean prices have come in the face of larger USDA crop forecasts," Good adds.

In the Crop Production report released on October 9, the USDA forecast the 2009 corn harvest at 13.018 billion bushels, based on conditions around the first of October. That forecast is 63 million bushels larger than the September forecast, reflecting the potential for a record U.S. average yield of 164.2 bushels per acre.

The yield forecast is 2.3 bushels above the September forecast, but the projection of harvested acreage was reduced by 713,000 acres. Acreage forecasts were reduced for a number of states, but the largest reductions were for Illinois (300,000) and Nebraska (250,000). The forecast of harvested acreage was increased for Kansas (270,000) and Texas (150,000). The largest month-over-month increase in state average yield forecasts was for Nebraska, up 9 bushels.

For soybeans, the 2009 harvest is now forecast at 3.25 billion bushels, about 5 million larger than the September forecast. The U.S. average yield is forecast at 42.4 bushels, 0.1 bushel above the September forecast. The projection of harvested acreage was reduced by 148,000 acres. The largest changes were in Illinois (up 300,000 acres) and Iowa (down 200,000 acres).

"The U.S. corn yield forecast is about equal to the average of a forecast based on crop condition ratings and a forecast based on growing season weather. The U.S. soybean yield forecast is still lower than the forecast based on crop condition ratings and the forecast based on growing season weather," Good says.