May 04, 2022

Commodity Prices Improve Producer Sentiment in April

High cost of inflation, difficulties procuring inputs continues to hold back farmer sentiment

The Purdue University-CME Group Ag Economy Barometer improved in April to a reading of 121, which was 8 points higher than a month earlier.

Despite this month’s increase, the ag sentiment index remains 32% lower than its April 2021 reading.

The Index of Current Conditions rose 7 points to a reading of 120 while the Index of Future Expectations rose 9 points to an index value of 122. Similar to the barometer, both the current conditions and future expectations indices remain well below year ago levels.

Commodity prices stronger

Ag producers financial performance expectations improved in April, largely as a result of strengthening commodity prices. In turn, expectations of stronger financial performance provided support to farmer sentiment, helping to push the Ag Economy Barometer up by 8 points in April.

Despite this month’s improvement in sentiment, however, the index was still 32% lower than a year earlier indicating producers remain troubled regarding the uncertainty surrounding input prices and availability.

Looking ahead to 2023, over half of crop producers expect input prices to rise above 2022’s inflated level and one out of five crop producers expect input prices to rise 20% or more compared to this year.

Just over one-third of crop producers reported having some difficulty purchasing inputs for the 2022 crop season while 11% of crop producers said that an input supplier told them they would be unable to deliver an input previously purchased for use this season forcing them to search for a substitute.

it also appears the war in Ukraine has exacerbated concerns among producers about input price levels and made availability even more uncertain.

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Marketwatch: Jul, 03

US Corn Price Idx: ZCPAUS.CM

open: 7.1488
high: 7.3886
low: 7.0173
close: 7.0525

US Soybean Price Idx: ZSPAUS.CM

open: 15.7324
high: 16.5525
low: 15.3323
close: 15.3637

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 9.0002
high: 9.0773
low: 8.5501
close: 8.6212

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 8.1033
high: 8.308
low: 7.749
close: 7.8078