Hope for higher

Demand for corn, soybeans and other commodities is strong and global stocks are down meaning lower supplies.

In the bleak mid-winter there is still hope because we know that the longer days and warmer temperatures of spring are on the way. For farmers, there is hope because a new crop year will soon begin with spring planting.

In many ways the entire year of 2020 was a bleak mid-winter of the soul because of the pandemic, fiercely partisan politics and violence in our nation’s biggest cities. Unfortunately, so far 2021 isn’t looking much better with the Coronavirus still raging and a political divide that isn’t getting any better.

What’s needed now more than ever is hope. And there is hope for farmers for the crop year to come: Demand for corn, soybeans and other commodities is strong and global stocks are down meaning lower supplies. This is fueling hope for higher prices and a generally optimistic, bull market for 2021.

USDA says U.S. stocks of corn and soybeans will shrink to their lowest levels since 2014. USDA estimates the average farm-gate price for corn and soybeans this marketing year will be the highest since 2013/2014. USDA also sees strong economic growth, low interest rates and low inflation this year which will help build demand and better prices for farm commodities.

Worldwide demand has been strong for corn and soybeans with Brazil and Argentina struggling with dry weather. Global buyers are showing more interest in U.S. corn and soybeans which is helping the price outlook. In short, 2021 is expected to be a profitable year for corn and soybean farmers. There is also hope for cotton with a low stocks-to-use ratio expected to help prices.

What is desperately needed is cooperative weather throughout the growing season across the Southeast and bumper crops so farmers can take full advantage of the higher prices. After so many challenging weather years and years of depressed commodity prices, this would give farmers much needed hope in 2021.

FarmProgress

Tags: corn, soybeans, cotton