Each month, the USDA (US Department of Agriculture) issues a report on the global stocks for key crops including corn, soybeans, and wheat.
This report is widely anticipated, as it holds information that affects prices of crop commodities. In 2016, for the most part, prices were below what they’ve been for the past five years.
The crop index (a median of historical spot prices of key NPK-consuming crops—corn, wheat, soybean, and rice—indexed to 100 on January 1, 2016) stood at 87.5 on January 20, up from 84.1 on December 20. The readings indicate that the crop prices within the index moved higher than last month. Notably, the index is significantly below its peak of slightly over 115 in June 2016, but it’s above its low of 81.7 at the beginning of September.
In this series, we’ll discuss the latest stock-to-use ratios, which the USDA (US Department of Agriculture) released on January 12. We’ll also discuss the prices for corn, soybeans, and wheat.
It’s important for agribusiness industry (IYM) investors to follow prices. Improving crop prices mean an improvement in farm incomes. Price rises are particularly positive for seed and fertilizer companies like Monsanto (MON), Syngenta (SYT), and Archer Daniels Midland (ADM) as well as for renewable energy companies like Pacific Ethanol (PEIX).