Tridge summary
The US Department of Agriculture reports that while key markets are responding to lower corn prices, demand for soybeans remains weak. Additional demand for 50 million bushels of corn from the 2023-24 crop is expected for animal feed and ethanol production. The markets have responded to the supply glut created by high prices over the past few years, with livestock farmers and other buyers making more efficient use of existing supplies. However, the USDA may be underestimating the growing demand for soybeans for biodiesel production. The next round of decline in prices for agricultural products is expected to last another year or two, unless weather or geopolitical events cause disruptions. The conflict in Ukraine could lead to higher prices for commodities, especially wheat, while China's pressure on Taiwan could reduce Chinese imports of U.S. corn and soybeans, causing prices to fall.
Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.
Original content
Increased demand should not cause prices to rise unless there are disruptions due to bad weather or geopolitical conflicts Key markets have already begun to respond to lower corn prices, but demand for soybeans is still weak, according to a report prepared by the US Department of Agriculture (USDA). An additional 50 million bushels of corn from the 2023-24 crop is expected to be used for animal feed and ethanol production, the report said. While the updated demand data came earlier than some economists and traders expected, StoneX chief commodities economist Arlan Suderman said it was not a complete surprise. Markets tend to move in cycles, Suderman said. Over the past few years, high corn and soybean prices have encouraged producers around the world to expand production, leading to a supply glut. Now, months of falling prices have prompted livestock farmers and other commodity buyers to make more efficient use of existing supplies - at least for corn. “Thanks to lower feed ...
Source: Zol
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