Money Flow Drives Grain Markets

May 24, 2016 01:47 PM
 
Money Flow Drives Grain Markets

Just like weather and production influence the grain markets, so can investor funds and currencies, Chip Nellinger of Blue Reef Agri Marketing, told AgDay Tuesday.

“We often get caught in the trap and we think, ‘Well, it’s all about weather and production,’ but I think the last couple of months (that) the amount of fund money that has flown into our grain markets and commodities in general has people scratching their heads,” Nellinger said.

“It’s a big factor going forward probably for the next few months,” along with the dollar’s strength, he said.

For example, after the most recent Federal Reserve meeting, there was a big selloff of commodities because the dollar strengthened in response. But of course, if the dollar dropped, it could lift commodities “regardless of crop size,” Nellinger said.

Listen to the full interview here.

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