$55 Soybeans and $17 Corn? It’s Happened Before!

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By titanoutlet August 14, 2012 15:17

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The hottest July on record came with little rain for relief – which will make grain stocks tight come market time! How high could prices go? If history repeats itself, we could see $55+ soybeans and $17+ corn!

CHICAGO, IL - FEBRUARY 11:  Traders work on th...

From AgWeb.com:

“Roggensack was a commentator on the CME Group’s Aug. 9 conference call ahead of August’s World Agricultural Supply and Demand Estimates (WASDE). He looked at the price highs set in 1973, the last time the world corn and soybean supply situation was as tight as it is today, and extrapolated in constant dollars what prices would need to be today to ration demand.

His answer: $17.59 for corn and $55.09 for soybeans. And that doesn’t factor in inflation.”

Those prices are unbelievable, but it could happen again in a year like this one, and if you’re one of those lucky farmers with a crop, you’ll be sittin’ pretty.

More from the article:

The current supply-driven markets are not a U.S. issue alone. In the past year, the world’s projected supply of grains has dropped by 180 million metric tons. “This is shocking. This is getting people at the United Nations very concerned,” says Basse. “The poor in the world are going to see tremendous pressure on their budgetary expenditure for calories. This has become a very scary situation, particularly for those in the world who are impoverished.”

No longer is this a “what price can you buy the grain for” type of market, says Basse. It is now a “do you have the grain” type of market. “There will likely be a long tail on this drought that will carry into the winter,” he adds. A late frost will be critical to maximize U.S. corn and soybeans production, soil moistures need to be replenished, the winter wheat crop needs to be good, and weather in South America and Australia also needs to be nearly perfect”

It’s kind of crazy to think about what can happen in a year. A gentle winter leading to a warm spring and warm summer, only to be neglected the rain we so badly needed. We sincerely hope luck is on your side this harvest season!

-Al Winmill, Titan Outlet Store Team

 

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titanoutlet
By titanoutlet August 14, 2012 15:17
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