Well, if you’re feeding cattle, there’s good news for your feed bill total: corn and soybean prices are dropping.

Corn and soybean prices have dropped sharply over the past two weeks, continuing the slide from the early summer peaks. The decline in December 2008 corn futures now exceeds $3.60 and the drop in November 2008 soybean futures is nearly $7.00.

Some of the recent decline reflects the larger supplies revealed in the USDA’s September Grain Stocks report. That report revealed September 1, 2008 inventories of soybeans of 205 million bushels.

That is about 55 million more than expected after the release of the Census Bureau estimate showing August 2008 crush about 15 million bushels lower than expected. The large year ending inventory resulted in a 91 million bushel increase in the estimated size of the 2007 crop. The increase reflected more acres and higher yields than earlier estimated.

While supply issues are at play, much of the recent decline in prices reflects concerns about the current and future demand for corn and soybeans. There is substantial concern about the implications of the current meltdown in U.S. credit markets on the potential for economic growth in the U.S. and the rest of the world. See the full report for future estimates by Chris Hurt, a Purdue University Extension Economist.