CHICAGO: Investment bank Goldman Sachs lowered its three and six month price forecasts for Chicago Board of Trade corn futures to $4 per bushel from $4.25 and forecast prices would fall to $3.75 in 12 months.
Goldman, in a note to clients dated Monday, cited "our expectation for US corn inventories near 2.0 billion bushels."
The bank left its three-month price forecast for CBOT soybeans at $12.50 per bushel and its six-month forecast at $11.50, and cut its 12-month forecast to $9.50 from $10.50.
The bank forecast that US soybean plantings would rise in 2014 to a record 83 million acres from 76.5 million in 2013. It forecast US 2014 corn plantings at 92.5 million acres, down from 95.3 million in 2013.
"While US planting margins will decline in 2014, they remain sufficiently high to incentivize record soybean planting," Goldman said.
"We believe that this holds even if new-crop corn and soybean prices decline another 10 to 15 percent by spring time, given the large decline in input costs, especially fertilizers."
Goldman projected 2014/15 US corn production at 13.881 billion bushels, with an average yield of 164.0 bushels per acre and harvested area at 84.6 million acres.
It projected 2014/15 US soybean production at a record-high 3.686 billion bushels, with a yield of 45.0 bushels per acre and harvested area at 81.9 million acres.
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