Dollar Weakness Supporting Commodities

October 20, 2009 07:00 PM
 

Linda Smith, Top Producer Executive Editor
 
Weakness in the dollar is likely causing new speculative money to move into commodities, leading to price improvement, says Ann Duignan of JP Morgan. The U.S. dollar index is at its lowest level since early August 2008. Corn, soybeans, wheat and crude oil futures all are rising modestly.
 
The theory is that the dollar is losing its status as the safe haven investment of choice. "Banks are dumping their dollar reserves in favor of the Euro, Yen and gold,” says Canadian grain trader Ben Currelly of NorAg Resources in Port Hope, Ontario. "The dollar is a commodity and as supplies grow its value drops more.”
 
That creates a cycle of further investments in commodities and other sectors. "If crude oil futures can close above $80, it would spark more near-term commodity sector investment by speculators,” says Chip Flory of ProFarmer.
 

 
You can e-mail Linda Smith at lsmith@farmjournal.com.
 

Back to news


Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close