It is the opposite for supply. If you are a seller, you will reduce supply today if you expect higher prices in the near future.
See Farmers Stockpiling Corn in Response to Tough Growing Conditions by Kirk Maltais and Jacob Bunge of The WSJ. The article shows what is happening to supply and demand right now in the corn market (big companies are offering farmers more now for corn, indicating demand is increasing in addition to supply decreasing).
Also, the article mentions that meat prices might go up. This is because supply of meat will decrease since corn, a resource used to make meat, is increasing in price. Livestock need to eat corn.
Excerpts from the article:
"Agribusiness companies, including Cargill Inc., Archer Daniels Midland Co. ADM -0.22% and Smithfield Foods Inc. are dangling hefty premiums to buy bushels of corn in places where unrelenting rain this spring prevented farmers from planting millions of acres.
Some farmers, though, are opting to sit on their unsold grain, banking it in case of a diminished harvest this fall—and the potential for still-higher prices ahead.
“For now, we’re waiting,” said Ben Klick, whose family raises corn, soybeans and wheat near Navarre, Ohio. “You don’t want to be greedy, but guys don’t know what to do.”
The persistent wet weather that swamped U.S. farmers’ fields this spring is now upsetting U.S. grain markets. Corn futures contracts traded at the Chicago Board of Trade have climbed by more than 22% over the past three months on fears that poor planting conditions would cut the U.S. corn harvest to the lowest level in years.
The U.S. Department of Agriculture on Thursday projected 2019 corn production at 13.88 billion bushels, an 8% drop from the agency’s estimate in May.
Higher prices for grain—the main cost of raising livestock and poultry—could help propel meat prices, which are already increasing after a fast-spreading hog disease in Asia led to the deaths of hundreds of millions of pigs, according to industry estimates. Supermarket data compiled by the USDA showed retail pork prices are more than 9% higher versus this time last year, while beef prices are up 2%.
In a normal year, farmers haul the prior year’s crop to grain elevators and to buyers throughout the winter, spring and summer to make room in their storage bins for corn, soybeans and other crops planted in the spring.
This year is different. The wettest 12 months on record in the continental U.S. put many farmers far behind on planting, giving corn plants less time to reach full maturity and upping the risk that an early frost could kill off crops."
"In a normal year, farmers haul the prior year’s crop to grain elevators and to buyers throughout the winter, spring and summer to make room in their storage bins for corn, soybeans and other crops planted in the spring.
This year is different. The wettest 12 months on record in the continental U.S. put many farmers far behind on planting, giving corn plants less time to reach full maturity and upping the risk that an early frost could kill off crops.
The USDA this week estimated that only 57% of the U.S. corn crop is in good or excellent condition, down from 75% at this time last year.
“One thing a farmer learns is that if you can’t grow a crop in the new year, you hold on to your old crop to tide you over,” said Dave Marshall, a farm-marketing adviser with Nashville-based brokerage First Choice Commodities.
In response, grain buyers are boosting offers to entice farmers to open up their bins."
"“End users are in a panic,” said Tanner Ehmke, industry research manager for agricultural lender CoBank. Crop traders, ethanol plants and livestock producers “want corn now because of the unknowns on this crop.”
The rain and flooding is making farmers “tighter-fisted,” according to Jason Britt, president of Central States Commodities Inc."
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