ATLANTA, Ga. – Prices paid for current inventories and future deliveries of grain and oilseeds are the highest since July 2008.
University of Missouri agricultural economist Ron Plain said the price signals that the markets are giving to world farmers “clearly call for seeding fence line to fence line.”
Today’s bullishness in the markets comes on the heels of this morning’s release of the U.S. Department of Agriculture’s supply and demand report.
It said American farmers harvested fewer bushels of corn, wheat and soybeans than expected last fall and sowed the smallest wheat crop since 1913.
The markets had already been building in some of today’s rise in prices, but March corn still rose 4.3 percent by lunch time to $6.33 per bushel on the Chicago Board of Trade.
March soybeans surged 4.6 percent to 63 cents to $14.27 per bu., the highest they have been since July 2008. Wheat rose more modestly – 1.3 percent to $7.77.
Plain said livestock are under pressure because of the lowest breeding herd supplies in recent history.
American sow numbers are as low as they were in the 1850s, while cows and heifers haven’t seen numbers in the United States this low since the 1950s.
He said Canadian livestock producers have cut at about the same rates as Americans, and as a result there is no hidden supply in Canada.
He said livestock prices are rising along with grain prices because of higher feeding costs, which might not translate into significantly higher prices at the farmgate for feeder pigs and 500 weight calves.
The USDA said supply vulnerability for 2011 still exists in the market because of La Nina effects on South America and potentially bad weather in the Black Sea region, where weather can be unpredictable.
“Not to mention what we might see in North America and other places,” he told an audience of farmers in Atlanta earlier this week ahead of the report’s release.
