Grain Prices Continue to Move Higher
UNDATED -- Experts claim the war in Ukraine, a late planting season, and high transportation costs have driven grain prices higher.
Local farmers can lock in prices not seen in a decade.
Al Kluis, managing director at Kluis Commodities says the market seems determined to test historical highs.
I think on my (corn) chart, you go back to 2012. And the high on the nearby contract that year was 844. And it came in August when we had that mega drought come in. So that's the next target on my longer term chart. As far as soybeans, they have the target there in 2012. We hit a high rate up at 1790. And so it looks like we're just on a mission to get up there and test those all time highs which were made in 2012.
Kluis says the trend will continue as long as end users can make a profit.
The old axiom that cure for high prices is high prices is still true. It's basic economic law. But the end users right now are still doing okay, the people crushing corn into ethanol are breaking even making a small profit, livestock farmers are profitable. The crushing of the soybeans into meal and oil are making about $2 A bushel, and we're not really seeing any pullback in demand yet for soybean oil or soybean meal. We will, but we may not be high enough to see that demand destruction occur yet.
This year’s planting continues to run behind normal. The next USDA Crop Progress Report is due out May 2nd.