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Strong demand offers relief for oversupplied crop markets

Strong demand offers relief for oversupplied crop markets

The patterns within crop agriculture have been incredibly persistent for the past few years. We’ve experienced a multi-year string of record production and record demand. Supplies have overwhelmed the demands and crop-ending stocks have been building, while prices worked their way down.

The early projections for the 2017 crop year show that corn and soybeans will continue to garner the lion’s share of acreage, as other commodities are still finding it difficult to compete for land. However, there seems to be more optimism in the markets for the upcoming year.

Over the past few months, the markets bounced off of the harvest lows, demand continues to build, and futures prices are offering a better outlook than we had a year ago.

As we enter 2017, we have more than 12 billion bushels of corn and 2.9 billion bushels of soybeans in storage in the United States. Both of these totals are higher than they were a year ago.

Demand from many sources

But crop disappearance during and after harvest accelerated. So while there is more crop hanging over the markets as we start the year, market participants also see more opportunities to move the crops for higher prices.

Marketing year

For Iowa, 2016 was another record-setting year. The...




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