The volatility in the grain market can be credited to an infusion of government money into the economy. That’s the word from StoneX Chief Commodities Economist Arlan Suderman. “We’ve increased money supply in our economy by about $5 trillion due to fiscal and monetary stimulus since the pandemic started; a lot of that money is making its way into the market, looking for the best story to trade.” The equities have been trading at record levels, but the momentum has slowed with talk of tax hikes and the risk of inflation. The energy sector has been stressed by COVID-related issues around the globe. That leaves agriculture as the primary market left. After grain and oilseed prices reach eight-year highs, Suderman says this is a time of reassessment. “Every time we pull back, we see end-users come back and we get those roller coaster effect.”
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