- The basis principle of Econ 101 is Market Price = the Intersection of Supply and Demand curves.
- Given this, if we use the National Cash Indexes for the 5 major grain markets we can see what the relationship is between supply and demand at any time.
- This doesn't tell us metric tons or bushels, but as it turns out, the actual (or imaginary) numbers are irrelevant.
It’s always interesting to see people struggle with the idea we can supply and demand in the Grains sector any day of any week of any month of any year simply by looking at the National Cash Indexes for the various markets. It’s not rocket science, but rather Econ 101, a course I’m sure almost everyone took at some point in their academic career. As I’ve said countless times over the years, I’m no economist (and extremely proud to remind folks of that fact), nor do I play one on television. I also didn’t stay at a well-known hotel chain last night, but I do remember the basic economic equation:
