If nothing else, we can all agree that the markets are fickle. They move wherever the winds of change blow them. Sometimes it doesn?t even need a wind, a breeze will be just as volatile. Whether it is input costs, weather, geopolitical conflicts, or even government activities, something is always affecting our grain prices.
Since 2020, it seems that the movements have been more volatile. Even as we enjoy higher prices, we know that it isn?t taking much to move our prices quickly and substantially in another direction.
This year one of the two biggest movers have been the dry weather across much of the nation, especially in the cornbelt. But we aren?t the only ones that are dealing with a dry weather pattern. Mike Zuzolo of Global Commodity Analytics says it is a global weather phenomenon that has the market?s attention.
India has been one of the bigger stories in the dry weather discussion. Their drought is greatly affecting their ability to produce all the wheat and rice they need.
The next biggest watchpoint for the grain markets is the value of the dollar. Zuzolo says that it continued strength in the midst of a global economic downturn has kept downward pressure on the grains.
Zuzolo says that if the value of the dollar starts to weaken, we could see an increase in commodity trades and exports.
