Farmers have seen a boost in corn and soybean prices since harvest finished and an Iowa State University Extension specialist says indications are the upward trends will continue.
Chad Hart says a couple of things have impacted prices. “We saw sort of the combination of the drought and the derecho lowering supplies here for corn and soybeans — along with a definite surge in international sales for both commodities — that has led to a significant price rise here in the past few months,” Hart says.
Hart says farmers may want to consider locking in a price on the futures exchange and begin selling a portion of the yet to be planted 2021 crop. Hart says the big debate is if there will be an additional increase in prices in the next couple of months and he believes the potential is there. He says it is a good time to lock in some prices — but if you want to wait and see how the market develops you could at least put in some price floors utilizing some options that allow you to take advantage if there is an increase this spring.
Hart soybeans have the biggest potential for an increase, but says we haven’t seen the last increases for corn. “Looking forward I think we could see corn continue to rally here as well,” according to Hart. “What has been fascinating about the corn market is that it has been beyond just China — and you are also seeing growth in places like Mexico, Japan, South Korea that is helping push that market along.”
Hart says it’s not just soybeans that the Chinese are purchasing. He says they have an interest in acquiring many other types of commodities. He says they have tripled their purchases compared to last year with corn purchases up 18-thousand percent this year compared to last year. He says they are very active too in the wheat, pork, beef, and broiler markets.
Hart says given the current predictions, U.S. farmers may find themselves with low inventory supplies with corn and soybeans later in the year.
(By Dennis Morrice, KLEM, Le Mars)