Want to see what it looks like when “outside markets” push ag commodities off the cliff?
Just look at any of the nearby charts on North American ag commodity exchanges today. (www.cbot.com, www.mgex.com, www.kcbt.com, www.theice.com)
Wheat, corn, soybeans opened with a gap down – soybeans especially – and have plummeted since.
In Chicago corn is down more than 10 cents to $3.52, soybeans at $9.08 – a 47 cent drop. Hard Red Spring wheat in Minneapolis is at $6.24, down more than 11 cents.
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There’s no big ag-specific reason for this. It’s all the fear and panic that still exists in the world markets about the worldwide recession and financial meltdown. Not only has that caused people to liquidate positions in all asset classes again, as they did in the fall, but it has also made analysts lower their food demand expectations for 2009-10.Â
It shows that ag commodities, which have been able to trade on their own fundamentals since breaking loose from equities and other markets in November, will be sucked right back down with them on days of major frights like today.
