While corn, soybeans and wheat have seen some slight rallies in the last few years, prices have stayed relatively low. Record- or near record-breaking crops year after year hasn’t been much help to the price picture.
Demand has been somewhat sluggish, and Brian Basting, commodity research analyst with Advance Trading, Inc., thinks it could be because increased production has overwhelmed growth.
“That’s something that’s flown under the radar is how strong our demand is,” he said on AgDay. “If there’s a worldwide hiccup with supply somewhere, that stage is set for some volatility in the markets.”
The old adage of low prices cure low prices, Basting thinks, is being felt in increased consumption. When the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report last week, Basting said he wasn’t surprised with the demand for corn, soybeans and wheat.
“There’s still for [soybean exports] to come down a bit, so that’s a little bit of a caution note there,” he said. “Corn demand is good—it’s solid, but it’s not stellar.”
Hear his thoughts on the record number of livestock on grain on AgDay above.