Corn and soybean prices move to new highs on the reports of crop conditions from the Pro Farmer Midwest Tour, less production from South America.
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Prices jumped after reports from the annual Pro Farmer Midwest Tour gave analysts and traders more bad news on the state of the crops.
"Crops in western Ohio and eastern Indiana were far below the norm," said Pro Farmer analyst Brian Grete.
Yields in South Dakota meanwhile were called "stunningly low."
"The Pro Farmer tour sparked the rally" Tuesday, said Frank Cholly of RJO Futures.
"They have a pretty good peg at final yields," he said.
The Pro Farmer estimates were significantly lower than the US Department of Agriculture's sharply slashed forecasts from last week.
"We are getting less production from South America, so that forces buyers to go to the US," driving up prices, Cholly added.
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The drought has also hit feeds for livestock like hay, forcing ranchers to trim their herds, which analysts expect could push up the price of meat in the coming year.
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The high prices in these agricultural commodities will likely abate in the months ahead. However, will the price increases that from the increase in the commodities also retreat? In addition, the culling of herds will likely result in a rise in price of protein later this year and into the next, as supply is reduced. It is a good thing that food prices are excluded from inflation rates.
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Prices jumped after reports from the annual Pro Farmer Midwest Tour gave analysts and traders more bad news on the state of the crops.
"Crops in western Ohio and eastern Indiana were far below the norm," said Pro Farmer analyst Brian Grete.
Yields in South Dakota meanwhile were called "stunningly low."
"The Pro Farmer tour sparked the rally" Tuesday, said Frank Cholly of RJO Futures.
"They have a pretty good peg at final yields," he said.
The Pro Farmer estimates were significantly lower than the US Department of Agriculture's sharply slashed forecasts from last week.
"We are getting less production from South America, so that forces buyers to go to the US," driving up prices, Cholly added.
----------------------------------------------
The drought has also hit feeds for livestock like hay, forcing ranchers to trim their herds, which analysts expect could push up the price of meat in the coming year.
---------------------------------------------------------------------------------------------------------
The high prices in these agricultural commodities will likely abate in the months ahead. However, will the price increases that from the increase in the commodities also retreat? In addition, the culling of herds will likely result in a rise in price of protein later this year and into the next, as supply is reduced. It is a good thing that food prices are excluded from inflation rates.
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