Despite gloomy outlooks for American farmers last spring, a recent trend of increased optimism has only continued to grow since the fall harvest, according to the latest DTN/Progressive Farmer Agriculture Confidence Index (ACI).
The Agriculture Confidence Index is designed to take the economic pulse of the agriculture industry. It is based on a survey of 500 producers picked at random to reflect the demographic makeup of the 2007 USDA Ag Census. The survey is conducted three times each year: pre-planting, pre-harvest and end-of-year.
The index now stands at 151, continuing the sunny outlook of last September’s survey, which came in at 140. Both index scores represent a far cry from the initial survey in April, whose index reading was recalibrated to 100 to serve as the baseline for future reference.
The Present Situation Index, which reflects current producer sentiment regarding input prices and net income, is a strong 214. The Expectations Index, which measures sentiment 12 months from now, is 117.
For additional information regarding the index, its methodology or other convenient resources, and to view previous ACI results, go to: www.AgricultureConfidenceIndex.com.
Crop prices are continuing their volatility. According to BrownfieldAgNews, corn was higher Dec. 17 on short covering and speculative buying, finishing near 28-month highs. The hot dry conditions in Argentina were supportive as the crop is in the pollination phase and any loss of supply would further raise demand for U.S. corn.
Soybeans were higher on technical buying and short covering. The big issue - South American weather outlook is mixed, better for Brazil than Argentina with more hot, dry weather in the forecast for the world's third leading producer of beans.
The wheat complex was higher on technical buying and short covering. The Southern Plains will get some precipitation, but it should be light and scattered and there's early talk of some producers needing to re-plant.
In any event, the near term fundamentals may be bearish, but world crop weather concerns have the long term outlook trending bullish.
Informa sees total U.S. acreage up on the year but it was still lower than many were expecting, so there's some thought traders will bid up for acreage.