Crop Prices Climb Alongside Uncertainty

Some crop prices are vaulting higher as massive disruption on U.S. farms raises concerns about the size and quality of this year’s harvest.

Prices began taking off in mid-May, after inclement weather put farmers well behind in their planting schedules and raised worries that swaths of farmland wouldn’t be sown at all. The surge continued after the U.S. Department of Agriculture confirmed that farmers had planted a fraction of what they have typically done by this time of year.

Corn futures leapt more than 14 percent in May, putting them on course for their best month since June 2015. They reached a three-year high of $4.38 a bushel last week. Wheat prices have jumped 13 percent, on track for their biggest one-month rise since April 2018.

Soybeans remain hamstrung by the trade dispute between Washington and Beijing and an epidemic afflicting China’s pig herd, which has reduced global demand for animal feed. They have risen less than 2 percent.

The crop rally marks a turnaround after a yearlong downturn in prices brought about by the trade tension and fears of a slowdown in the world economy. Booming exports from Latin America, which often compete with U.S. crops on global markets, have also weighed on prices.

Over the past five years, U.S. farmers had planted 96 percent of their corn crop on average by this time. This year, that figure has dropped to 67 percent as of Monday, the USDA said.

The price rally could help farmers who are behind on loans.

Source: Wall Street Journal