RubinBrown Food & Beverage Update 2015

Commodity Pricing: Major Field Crops

Weather a Major Culprit for Crop Price Volatility Corn prices rose from June 2010 to December 2010 due to unfavorable weather conditions in the U.S., which is the world’s largest producer of corn. Severe drought in China and Argentina also contributed to a corn shortage globally. The low corn stockpile in 2011 and a small crop yield in 2012 helped maintain the elevated corn prices through 2011 and 2012. The subsequent decreases in corn prices in 2013 and 2014 were helped by good weather conditions, “with 74% of the crop rated in good or excellent condition [..], the best in two decades.” (Bloomberg) From July 2010 through 2011, wheat price increases were due to world wheat shortages caused by a severe winter drought in China and record-breaking heat waves and floods in Ukraine, Russia, Canada, and Australia. Since October 2012, the price of wheat has exhibited a steady downward trend, boosted by investors’ pessimistic outlook on demand in combination with the steady climb of the U.S. dollar over the same period, which has made the grain less affordable for overseas buyers.

Price Received – Major Field Crops

$18.0

$16.0

$14.0

$12.0

$10.0

$8.0

$6.0

$4.0

$2.0

Source: USDA National Agricultural Statistics Service

$0.0

Corn, Grain ($ / BU)

Soyeans ($ / BU)

Wheat ($ / BU)

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Food & Beverage Industry Sector: 2015 Mid-Year Update

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