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Analyst says fears of recession are weighing on grain markets

A market analyst says assumptions that an economic slowdown is near are holding commodity prices back.

Virginia McGathey is president of Chicago-based McGathey Commodities.

“There is an expectation of a world recession, and I think that’s why you see all the grain markets kind of stalled out. It could definitely be playing a role across the livestock market (as well). That’s why we’re not seeing any of the screaming markets here.”

She tells Brownfield she’s skeptical a global recession will occur.

“But the worry of it makes everyone play the game that way, so this is what kind of happens in the market. It doesn’t have to happen, but if everyone thinks it’s going to happen, that’s why we get that kind of a reflection.”

McGathey says a potential positive of an economic slowdown domestically would be a weakening Dollar that would make exports more affordable.