Weak crop prices sour U.S. producer sentiment

Tuesday, 06. September 2016 16:51

Declining prices of agricultural products are weighing heavily on producers' expectations in the United States, according to joint Purdue University Center for Commercial Agriculture and CME Group survey, published on Tuesday.

Producer sentiment fell sharply in August, by 17 points to a reading of 95 points on the Purdue/CME Group Ag Economy Barometer. The Index of Current Conditions dropped from 93 points in July to 80 in August. The Index of Future Expectations also fell sharply from July's 121 to 102 in August.

"Farmer sentiment in late spring and early summer was buoyed by a spring rally in key commodity prices, but near-ideal growing conditions for corn and soybeans this summer helped push yield prospects up and crop prices down sharply," explained Jim Mintert, the principal investigator for the barometer.

Early in September, prices of soybean futures for December were as much as $1.75 per bushel lower compared to the peak prices in June, while corn futures for November dropped by $1 per bushel.

The U.S. Department of Agriculture reported that record yields can be expected for both corn and soybean, and a year of good crop could turn into a year of lowest prices in a decade, according to Purdue/CME Group report.

Image: EPA / Daniel Kiss

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