yolowire.com - U.S. Grain prices are down a combined 17% so far this year and at their lowest level since the onset of the Covid-19 pandemic in 2020.
The Bloomberg Grains Subindex, which tracks futures prices for corn, soybeans and wheat on the Chicago Mercantile Exchange, is down 17% year-to-date and trading at its lowest level since December 2020.
As a group, grains are currently the worst performer among leading commodity sectors, trailing gains seen this year in energy and metal subindexes, according to data from Bloomberg.
This year’s price decline is a reversal from a post-pandemic rally that sent grain prices more than doubling in 2022, fueling food inflation across much of the world.
However, rising supplies and excess inventories have conspired to push prices for corn, soybeans and wheat down in recent months, say commodities analysts.
American corn growers, for example, are currently holding the largest stockpile of that vegetable since 1988 due to high production costs and low prices at which they can sell.
Analysts and market commentators are warning that the steep decline in U.S. grains prices could mean significant financial losses for farmers this year.
A study by the University of Illinois has forecast that farmers could lose as much as $244 per acre of corn and lose $98 an acre on soybeans in 2024.
“Alarm bells should be going off about the scale of potential corn/soybean losses for the 2024 crop in the Corn Belt,” states the university report.
In addition to the excess supply, grain prices have been pushed lower by sluggish global demand, with U.S. exports declining as top commodities buyer China chooses to purchase grains and agriculture products from competing countries such as Brazil.