Some decline in northern hemisphere coarse grain and wheat production from the record levels of 2011 would not be surprising, but the South American corn crop is expected to be much larger. A decline in total foreign grain production could give U.S. exports a boost, Good said.
“A bigger issue for export demand, however, may be the state of world economic and financial conditions. A slowdown in growth in Asian markets could be troublesome for demand, whereas broader European financial problems could be generally disruptive to commodity demand,” he said.
As always, there are so many unknowns that price prospects for the year ahead cannot be formed with a lot of confidence, he noted.
“Current prospects point to some further weakness in corn and perhaps soybean prices, but a price collapse is not expected. After the sharp decline this year, wheat prices look to be more stable in 2012,” he said.