The weather, global economic conditions and government polices are the primary variables that impact Cargill grain prices in addition to other suppliers. In North America, grain futures prices are determined by commodities traders who use those variables to speculate about the values of specific crop harvests.
In the United States, pricing and trading occur through commodity exchanges, including Chicago Mercantile Exchange, the Winnipeg Commodities Exchange and the New York Mercantile Exchange. At these exchanges, traders buy and sell future crop yields to generate a market driven price.
The weather is generally one of the most important factors used by traders in evaluating future grain prices. They use current soil moisture content in specific growing regions as well as short and long term weather forecasts to predict shortages or excess harvests, and these predicted fluctuations in supply form the basis for fluctuations in price.
Producers export a significant amount of grain grown in the United States to other countries. Global economic conditions, such as the strength of the U.S. dollar against other world currencies can also impact grain prices. If the dollar is stronger than other currencies, it makes U.S. grain more expensive, which reduces demand, and vice versa. Additionally, while most governments employ some sort of price support programs, these programs set artificial grain prices that do not necessarily represent their true market value.