Talks of Inflation Good for Grain, Bad for Pocketbook

November 1, 2017 12:08 PM

The U.S. economy had the fastest six-month growth period sine 2014, between quarter two and three, according to a new report from the Bureau of Economic Analysis. During the third quarter, the gross domestic product (GDP) increased 3 percent, just shy of 3.1 percent in quarter two.

Between this growth, the Republican push for tax reform and a 4 percent unemployment rate, Americans could soon be seeing inflation on the rise.

While this inflation will be bad for consumers, Jim McCormick, senior broker and market commentator of Allendale, Inc., thinks the funds will come into the grain market.

“They’re already started loading the livestock; they’ve already started loading the crude oil,” he said. “Grains are relatively cheap so they could come in and say, ‘I need to buy something to lock in inflation.’”

A break in the stock market could also pull commodity prices higher.

“The money looks for cheapness, and grains unfortunately are relatively cheap,” said McCormick.

In the long term, McCormick thinks grains could  be bullish commodities, and the catalyst could be the Republican-led proposed tax cuts.

Hear his full thoughts on AgDay above.

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Spell Check

Eastern, NE
11/2/2017 09:34 AM

  If the Rumpster gets his way and the 401(k) is no longer pretax, dollars flowing into the market will slow. Higher interest rates could see people opt for CDs instead of riskier hedge funds. Our traditional buyers protect themselves from the higher dollar. So will inflation help? Didn't help us in the early 80's. I think it will only harm us in higher input costs.


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