UIUC Weekly Outlook: Early Price Peak for Corn and Soybeans?

The ethanol blender tax credit is due to expire at the end of 2011 so that ethanol production above the mandated level will require favorable blending margins, he added.

"Still, there is a lot of uncertainty about demand for U.S. corn and soybeans. These uncertainties include corn demand from China and the size of the upcoming South American crops," he said.

Although a lot of unknowns persist, it now appears that smaller supplies will push corn and soybean prices even higher in the short run, with prices peaking early in the marketing year and moving erratically lower into the winter, he said.