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.