Farmers have been suffering through a few years of low commodity prices and tight margins. Nothing is more welcomed by farm country this holiday season than hope for higher commodity prices. According to Jim Bower of Bower Trading, grain prices will come back.
Exports markets will drive demand, he says. In China for example, there’s a growing demand for grains to fill ethanol plants currently under construction. Bower says the country plans to build 50 more ethanol plants in the next 2-3 years.
“Intermediate to long range, I think grain prices are coming back,” he says. “We just got a rough sledding for another two to six months maybe depending on South America. Long term, I still like the agricultural commodities, coffee, cocoa, sugar, and oranges. Anything that's food oriented, high protein, quality, safe and reliable, I think the world needs and I think the market price will do better.”
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