The stocks-to-use ratio for corn used to be a very good indicator of average corn farm prices in years past.
High stocks-to-use ratios would normally result in lower prices and vice-versa.
The relation between stocks to use and prices have become less useful in recent years with the renewable fuels boom and recent short crops resulting in very slow stocks-to-use ratios and very high prices. In fact now prices trade a much higher levels given certain stocks-to-use ratios than was the case in the past (1970’s thru 1990’s).
Part of the reason is that ...