Ag Report: soybean prices strengthen

Why are the numbers doing so well lately?

Grain and soybean prices have shown some price strengthening in recent weeks, and an Iowa State University Agricultural Economist says farmers should take advantage of the situation.
 
There are a number of reasons for the increase in commodity prices, including hot weather concerns, a poor South American crop, increased demand, and a weaker dollar have all contributed to the increase in our commodity prices.
 
"We have seen exports strengthen up here, as you have mentioned, the dollar has gotten weaker," says Dr. Chad Hart, Iowa State University's Agriculture Economist. "Its made our corn and soybeans, even our livestock products a little cheaper to the rest of the world and we've seen more sales that way."
 
Hart says July 4th has in the past, been a good indicator as to what the commodity grain prices will be like for the remaining crop season. 
 
He says the markets are showing similar signs as to what farmers saw at this time last year.
 
"It may have been pushed up a little bit this year, If you think back to last year, what we did see was a little run, sort of like this last year, it wasn't quite as strong or as long, but we did see a run in late June into early July that helped push prices higher, but then they fell back again," says Hart. "I'm wondering if we are going through that same process this year, but if you will, a little longer and a little stronger this year that what we saw last year."
 
The Iowa State University agricultural economist believes farmers may want to look at taking advantage of the present opportunity and market some of their corn and soybeans that is in storage, and possibly look at selling some of their new crop.
 
"Well I think as you look at the old crop, you know, the crop that is in the bin, now is a great opportunity to be moving that along," says Hart. "As we look at new crop sales, the crop that is growing out in the fields, I would say this does represent a marketing opportunity. Not that they necessarily have to sell the crop at the cash market, but they may want to look at putting in some price floors, using maybe minimum price contracts, or options contracts, to help put in a little price, if you will, and if prices continue to rally, try to benefit from that as we move further through the summer."
 
So does it look like farmers may see a long-term price rally with their commodities?
 
Hart says through out the Midwest, right now, we have signs of having a good crop production.  If that is the case, then he says prices will start to drop. 
 
On the other hand, if the summer turns out to be hot and dry, then grain and soybean prices may continue its rally.
 

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