Farmers are watching agricultural production in South America this winter as they try to predict the direction corn and soybean prices will take in coming months.
Minnesota farmers had good harvests of each crop last summer and have a lot of grain to sell. Brandon Marshall with Northstar Commodity in Minneapolis said grain prices have drifted lower in recent weeks, partly because of what grain traders are hearing about crop progress in the southern hemisphere.
"The perceived production increases that are coming out of South America," Marshall said. "Brazil and Argentina are a couple of the largest producers of corn and soybeans in the world. And so far they're off to a great start."
Corn and soybean prices reached record levels last summer as drought reduced U.S. production. Prices are lower now, but remain at profitable levels.
Minnesota farmers harvested an average of 165 bushels of corn per acre last year, much higher than other states where drought cut into yields. Iowa, the nation's largest corn producer, saw yields of 137 bushels an acre. Minnesota's total production for 2012, nearly 1.4 billion bushels of corn, was the most ever harvested in the state.