Agricultural producer sentiment about the industry's economy improved substantially in November, in part because of rallies in soybean and corn futures prices, according to a Purdue/CME Group Ag Economy Barometer report released last week.
The barometer, which is based on a monthly survey of 400 U.S. agricultural producers, jumped to 116 – the highest reading since October 2015, and up 24 points from the October 2016 reading of 92.
The shift was largely driven by the Index of Future Expectations, one of the barometer's components, which climbed to 130 in November, up from 95 in October. The index of current conditions increased only slightly, from 85 in October to 87 in November.
"Producer sentiment about the future climbed partly because of a significant rally in futures prices for corn and especially soybeans this fall," Jim Mintert, barometer principal investigator and director of Purdue's Center for Commercial Agriculture, said. "The rally included not just nearby futures contracts, but extended to prices for both the 2017 and, to a lesser extent, 2018 harvests."
Recent November 2017 soybean futures prices were as much as 13 percent higher than August lows. Despite record corn and soybean harvests this fall that were expected to cause prices to decline, strong export demand and uncertainty around the South American crop offered support in November.
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