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Pulse Price Report: Crop Prices Rally

In what is typically a time of crop price declines, the spring season has brought about massive gains for farmers growing corn and soybeans. The fear of crashing corn prices early in 2016 never materialized amid the volatility of Brazil’s government and crop health. The commodity’s strength could push a higher food cost toward consumers.

Soybeans have seen a nearly 25 percent increase this year, soaring above $10 per bushel. Meanwhile, corn has seen modest but consistent gains, earning more than $4 per bushel.

Spring is typically a time for lower crop prices. The weather is getting warmer and farmers are optimistic they will yield a big crop at the start of planting. These high expectations infer high production, which usually keeps prices down.

But low production expectations in South America means high exports to the continent, dwindling the corn and soybean reserves in the United States and driving up the price.

As these prices rise, other companies are reaping some benefit. The maker of John Deere tractors, Deere & Co., and the agrochemical giant Monsanto have both seen gains in their stock prices.

The United Nations food agency reported that global food prices have risen for the fourth straight month.

 

Crop prices (June 6)

Rio Creek Feed Mill – Algoma

Commodity Price (per bushel) Basis
Corn $3.73 -0.45
New-Crop Corn $3.70 -0.50
Soybeans $10.52 -0.80
New-Crop Soybeans $10.10 -0.75
Wheat (SRW) $4.27 -0.70

 

Fox River Valley Ethanol – Green Bay

Corn $3.80/bushel -0.38
New-Crop Corn $3.77/bushel -0.43

 

Basis: The difference between the local cash price for a commodity and the Chicago cash price (where the Board of Trade sets national futures price).

 

Gas Price Averages

United States: $2.36

United States one year ago: $2.75

Wisconsin: $2.40

Wisconsin one year ago: $2.72

Northern Door: $2.53

Sturgeon Bay: $2.49

 

Other Commodities

Gold: $1,248.40/troy ounce

Silver: $16.48/troy ounce

Oil: $49.70/barrel

 

Sources: aaa.com, agweb.com, gasbuddy.com, cnn.money, The Wall Street Journal, Agriculture.com

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