Iowa Public Television


Grain, Oilseed Markets Begin To Rally

posted on December 15, 2000

Another Democrat who might have found a seat in the cabinet is Louisiana Senator John Breaux. Breaux met with the President-elect on Friday to discuss a possible appointment as Secretary of Energy. The Louisiana Senator is considered to be an advocate of renewable fuels like ethanol. However, early word is Breaux is reluctant to leave an evenly divided Senate.

Having an advocate in the next administration is critical to the ethanol industry, and to corn producers who see the blended fuel as an important sector of a market that continues to carry the weight of burdensome supplies.

Losing government support for ethanol would be a serious blow to the farm economy just as markets for grain and oilseeds are beginning to strengthen.

Grain, Oilseed Markets Begin To Rally After enduring four successive years of low prices, including this year's bin busting record harvest of corn and soybeans, some commodity analysts think the descent to 15-20 market lows may be ending.

The question that remains is whether grain and oilseed prices will now wallow in a virtual market trough for the next several years.

One bright spot is a spike in the soy complex. European demand for soymeal jumped sharply in the wake of the EU's ban of the use of animal offal in livestock feed in response to the outbreak of Mad Cow disease. More recently, the Europeans having been buying beans. In the last six weeks bean futures prices have climbed nearly ten percent.

By USDA estimates the EU will need an additional 900-thousand tons of soybeans and 600-thousand tons of meal to replace the bone meal European livestock farmers usually fed. The USDA has upped its forecast for soybean exports by 2.6 percent.

Despite concerns over Starlink corn the USDA reports stronger export sales. Notably, Japan one of the biggest customers of U.S. corn, as well as the most fearful about Starlink was back in the market, accounting for more than 40 percent of weekly corn export sales. Some analysts suggest Japan's return to U.S. corn does not signal its confidence in G-M-O corn nearly as much as the fact there is a dearth of alternative sources of the grain.

Tags: agriculture corn crops markets news soybeans