Iowa Public Television

 

Wheat prices up; USDA projects low corn and soy prices

posted on February 11, 2000


THE PRICE INCREASES FOR INPUTS AND TRANSPORTATION NEEDS THAT FARMERS RELY UPON MUST SEEM CRUELLY IRONIC. THAT'S BECAUSE THE PROFIT POTENTIAL IN AGRICULTURE HAS SEEMED BRIGHTER IN RECENT DAYS, DUE TO A STEADY INCREASE IN LONG DORMANT COMMODITY PRICES.

RANCHERS, FOR EXAMPLE, ARE SEEING SOME OF THE BEST CATTLE PRICES IN A DECADE, THANKS TO A REVIVED ASIAN EXPORT MARKET AND THE SMALLEST U.S. INVENTORY IN 30 YEARS. CATTLE PRICES IN BEEF-PRODUCING STATES LIKE MONTANA IMPROVED IN SOME AREAS BY AS MUCH AS 30 PERCENT OVER A YEAR AGO.

SOME REALISTS MAY WONDER IF THE INDUSTRY WILL EVER BE MORE THAN THE NICHE IT HAS BECOME. EVEN-SO CATTLE PRODUCERS ARE ENJOYING THE GLOW OF THE MOMENT. FOR THEIR GRAIN AND OILSEED BRETHREN THE MOMENT WAS MORE FLEETING THIS WEEK.

BEFITTING THEIR NAME AND FUNCTION FUTURES MARKETS FOR GRAIN AND OILSEEDS WERE TRADING SHARPLY HIGHER THIS WEEK ON SURGING WHEAT SALES AND WHAT THE TRADE ANTICIPATES WILL BE A BETTER CLIMATE FOR HIGHER PRICES.

THE NEWS OF A BIG SALE TO EGYPT, AND CONTINUED WORRIES OVER THE CONDITION OF THIS YEAR'S WHEAT CROP ON THE PARCHED PLAINS PUSHED WHEAT PRICES HIGHER AT ALL THREE EXCHANGES TRADING THE WHEAT CONTRACTS. THE INTEREST IN THE WHEAT PITS AND WORD FROM WASHINGTON OF A BIG FOOD AID PACKAGE, RECIPIENTS TO BE NAMED LATER, ENCOURAGED HIGHER PRICES IN CORN AND SOYBEAN PITS.

HOWEVER, PRIOR TO FRIDAY'S OPEN THE MARKETS WERE SOBERED BY USDA NUMBERS AND PROJECTIONS. ACCORDING TO THE USDA REPORT STRENGTHENING WORLD DEMAND WILL DO LITTLE THIS YEAR TO LIFT U.S. CORN AND SOYBEAN PRICES.

THE GOVERNMENT PROJECTS FARM GATE PRICES WILL REMAIN AT THEIR LOWEST LEVELS IN 25 YEARS.

ANTICIPATING SLIGHTLY SMALLER SOUTH AMERICAN CROPS, THE USDA HAS RAISED ITS PROJECTIONS FOR U.S. SOYBEAN EXPORTS. HOWEVER, THE GOVERNMENT LOWERED ITS PROJECTION FOR U.S. CORN EXPORTS ON THE BASIS OF A BIG UPTURN IN SALES OF CHINESE CORN.

WHILE THE TRADE MAY CONTINUE TO WORRY ABOUT THE WEATHER, THE GOVERNMENT IS FORECASTING FOR 2000 A $1.90 FOR A BUSHEL OF CORN AND $4.75 A BUSHEL FOR SOYBEANS, HARDLY ENCOURAGING TO FARMERS WHO ARE PREPARING TO PLANT.

Tags: agriculture business commodity prices corn farming markets news soybeans USDA wheat