Commodity prices have been on a downward trend since earlier this summer, but ag economists say that they are watching other changes as well.
According to Joe Janzen with the University of Illinois, “Obviously, the one that I think everyone who follows grain markets is aware of is that prices are lower than they were back in May and June. That’s the first one, but the second thing and what tends to happen when we move into a lower-price environment is the market tends to reward people for storing grain. It ups the incentives to hold some grain back because the markets well-supplied in the short run. So, how it does that is by widening out or increasing the spread between delivery at different dates. So, think about delivery next March relative to delivery now at harvest, for example. Those spreads have widened out significantly in the last three to four months both for corn and soybeans.”
Weather has also been a major driver over the last several weeks across global markets.
Economists say that they are watching Brazil’s top-producing states. Moisture has taken a major hit there as the country prepares for record crops in the coming season.
