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Markets Burdened By Crop Prospects

posted on June 22, 2001


Hello, I'm Mark Pearson.

The index of leading indicators, which is used to project activity three to six months out, suggests the economy is poised to bounce back. That projection may be lost on some who view lower corporate earnings, large-scale layoffs, and anemic manufacturing activity as evidence the economy is sliding into the tank.

But the Federal Reserve, seemingly assured the economy is operating without inflation, is expected to lower interest rates next week. The Fed has already cut rates five times since January. Lower rates assure the business community of capital for expansion. But they have NOT reduced the value of the dollar against foreign currencies. A strong dollar, while good for consumers, is a burden on an export- sensitive sector of the economy that is already confronting a number of challenges.

 

Markets Burdened By Crop Prospects

After brief bumps higher early in the week, grain, oilseed, and fiber markets returned to more familiar lower levels. A strong dollar that effectively adds to the price of American commodities has dampened export sales.

Weak demand and the rapid pace of the nation's wheat harvest, assures the trade of ample supplies, despite the fact 77% of the crop is in fair or weaker condition.

Although autumn harvests are months away soy and corn crops are also reported to be developing well enough to discourage higher prices. Ninety two percent of the soy crop has been planted. 83% has emerged, 58 percent rated to be in good or excellent condition

Sixty three percent of the U.S. corn crop is rated as good or excellent. And 56 percent of the American cotton crop is rated good to excellent, small comfort to fiber growers who're seeing some of the worst prices in years.

The American Medical Association is calling for an end to the livestock industry's non-therapeutic use of antibiotics.

Frequently antibiotics are blended with livestock feed to promote growth. The A-M-A says the practice creates opportunities for bacteria to develop resistance to antibiotics.

The organization acknowledges overuse of antibiotics in humans also is a problem, but insists the unnecessary use of the drugs in livestock production should be phased out.


Tags: agriculture crops markets news