October 1, 2014 / 2:48 PM / 3 years ago

Goldman Sachs lowers CBOT soy, corn, wheat price forecasts

Oct 1 (Reuters) - Goldman Sachs lowered its three- and six-month price forecasts for Chicago Board of Trade soybeans to $8 a bushel, below the current spot price near $9, the investment bank said in a note to clients dated Tuesday.

Goldman said CBOT soybeans are overpriced relative to corn, and overpriced given an expected jump in U.S. soy ending stocks in the 2014/15 marketing year.

“Our price modeling and our updated soybean and corn U.S. ending stock forecasts point to the 2014/15 CBOT soybean-to-corn price ratio trading at 2.6 in coming months. We therefore lower our three- and six-month soybean price forecasts to $8.00 per bushel, well below the current forward curve,” Goldman said.

The bank forecast a 12-month CBOT soybean price at $8.75.

In its previous price forecasts dated July 28, the bank projected the three-, six- and 12-month soybean price at $10.50 a bushel. Front-month CBOT soybeans were trading above $12 a bushel at that time.

Goldman also cut its price forecasts for CBOT corn and wheat, citing strong U.S. corn yields and a lower corn export forecast compared to the U.S. Department of Agriculture’s current view.

Goldman forecast a three- and six-month CBOT corn price of $3 per bushel and a 12-month price of $3.75. The figures compare to the bank’s July 28 forecasts of $4 per bushel for all three time periods.

The bank put the U.S. 2014 corn yield at 175 bushels per acre and production at 14.552 billion bushels, above the USDA’s estimate of a 14.395 billion-bushel crop with a yield of 171.7.

For wheat, Goldman lowered its three- and six-month price forecasts to $4.50 per bushel and its 12-month forecast to $5.30.

“(O)ur wheat price modeling and latest USDA data, which point to higher 2014/15 U.S. wheat inventories, point to wheat prices trading at a 50 percent premium to corn prices, implying a $1.50/bu differential,” the bank said.

On July 28, the bank forecast a three-month price of $5.60 and six- and 12-month prices at $5.75. (Reporting by Julie Ingwersen in Chicago; Editing by Meredith Mazzilli)

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