A pair of ag economists say strong export demand could help tighten grain supplies and provide some price support for farmers.
Dan O’Brien with K-State University says China has fulfilled about 11 percent of its 25 million metric ton commitment for the year. “If China comes to the table, that’s a big issue with regard to soybean prices, soybean futures and then the carry over to the other grains as well.”
On Tuesday, the USDA reported that China purchased soybeans for the second business day for a total of more than 500,000 tons.
Guy Allen says he expects another record year for corn exports to Mexico even with live cattle imports expected to resume. “I think a lot of that feed lotting is going to continue to be done in Mexico, which keeps me pretty optimistic the future demand for corn down there. They’re having a record year of purchases.”
He says the ongoing drought in Europe and a smaller wheat crop in the U.S. will likely reduce exports, but, “I’m pretty optimistic that those export numbers are going to be higher than what they’re currently projecting. That will likely lead to higher wheat prices the last half of the season.”
O’Brien says there’s been an uptick in sorghum sales after China returned to the market and prices have moved higher. “It’s been a good recovery.”
Both economists say that the August supply and demand report will provide additional insight on if the U.S. will meet its export goals.
