Depressed Prices Ups Farmer Hedging, CME Says
As farm markets tumble, does this cause farmers to use the futures market more or less?
Since the USDA's June 30 Crop Production Report, corn prices have fallen 25% and soybean prices 11%. And although this week's monthly WASDE Report's U.S. corn yield estimate came in below trade expectations, the 2014 corn and soybean crop sizes are still marching toward record levels. As a result, the futures markets remain under heavy pressure, pushing already to four-year lows.
Dave Lehman, CME Group Managing Director of Research and Product Development, says price volatility remains the theme on the board.
Lehman says it's likely more farmers will see hedging as a way to navigate through the "bearish waters" this year.
The CME Group leaders attended the Iowa State Fair Tuesday to promote Commodity Carnival, a joint effort with the 4-H Foundation to help educate children on how to grow and sell a steer.