A leading global provider of organic and non-GMO grains sees a price divergence between organic soybean and corn prices continuing for the balance of 2020.
The Jacobsen says the supply of organic soybeans is expected to decline due to slowing imports while organic corn imports are expected to rise.
U.S. demand is reliant on organic grain imports into the United States, The Jacobsen says. About 20% of the organic corn used for feed in the U.S. is imported while about 70% of the organic soybeans and organic soybean meal that is consumed in the U.S. is imported. Most of the organic grain imports are from India.
Organic corn price forecast
Imports of organic whole corn and organic cracked corn are expected to rise during the balance of the 2019/2020 season by approximately 8%, climbing to 16.2 million bushels.
With demand expected to remain unchanged year over year, the stock-to-use ratio is expected to climb, generating headwinds for organic corn prices. For the 2019/2020 season, The Jacobsen sees organic corn prices for Midwest farms averaging $8.3, down from $8.60 seen during the 2018/2019 harvest season.
Organic soybean price forecast
During the 2018/2019 season, imports of organic soybeans dropped by nearly 3.7 million bushels and were replaced by a similar volume of organic soybean meal.
The decline in organic soybean imports into the U.S. reduces the number of organic soybeans available to crush. Organic soybean prices have hit multi-year highs and are likely to continue to remain buoyed as imports of organic soybeans to the U.S. continue to slow. The Jacobsen expects organic soybean imports from India to decline by 40% to 50% during the 2019/2020 season due to a poor harvest.
The Jacobsen expects the stock-to-use ratio of organic soybean meal to decline substantially during the 2019/2020 season. In addition, the U.S. organic soybean harvest declined by about 22%. This puts the average price of organic soybeans for the harvest season up to $21 per bushel, with prices likely topping out for organic feed grade soybeans at $23 per bushel.
Source: The Jacobsen, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.