Commodities Buzz: US Agri Economy Sentiment Index At Highest Level In 16 Months

The May reading of the Purdue University/CME Group Ag Economy Barometer was 141, 16 points higher than in April 2018 and the highest barometer value since January 2017. The rise in the barometer, a sentiment index derived from a monthly survey of 400 agricultural producers across the US, was driven both by producers improved view of current conditions and, especially, their more optimistic view of the future. The Index of Current Conditions rose to 132 during May, 9 points higher than in April while the Index of Future Expectations climbed to a reading of 145, 19 points higher than a month earlier. This was the highest future expectations reading since February 2017. The increase in the sentiment index was driven both by an improvement in producers perception of current conditions and, especially, by a more optimistic view of future economic conditions. Compared to April, producers were more optimistic about the US ag economy over the course of the next year and the upcoming five years. A relaxation in trade tensions between the US and China could account for some of the increase in optimism about the US ag economy.