Post-election markets have no surprises
November 4, 2020 By Larry Lee Filed Under: 2020 Events, Ag financial planning/succession planning, News, Risk Management
A broker says the commodity market hasn’t really moved much because of the election.
John Heinberg is with Total Farm Marketing. He says, “The commodity markets are actually sitting in pretty good shape today. We’re higher in the majority of them this morning. You know, really, the election is probably more of an equity market type reaction as we’re dealing with our own separate issues.”
He tells Brownfield markets are mixed today as the harvest gets close to wrapping up with good demand and a lot of questions about what the corn supply will look like.
Heinberg says there was some downward push on the stock market futures Tuesday night, but commodities are just doing what they usually do. “Today, we’ve had decent buying strength come back in as we’re back to the fundamentals and focusing on South American weather and the demand side of the equation. You know, you can go look back at the 2016 election. We had the stock market moving eleven hundred points on the futures during that time window, but the grain markets really didn’t move a whole lot.”
Heinberg says the markets do not like instability, and not knowing who the President is going to be and what policies will change contributes to that. “They’ll probably come and play more within that equity market, you know, but you’ve got a lot of markets here that are pretty elevated, and if we start seeing some profit-taking on the equity side, you’ll see some money flow coming out of the grains and the livestock side of the equation.”
Heinberg says farmers should pay attention to the headlines, look again at their risks, and to take advantage of some of the recent price rallies.
Addendum: Brownfield’s John Perkins has this summary of Wednesday’s markets at the close:
There was a higher finish on beans and corn because of demand expectations and dry weather in the forecast for parts of Argentina and Brazil, wheat mixed (Chicago mixed keeping an eye on soft red winter conditions, Kansas City up on dry weather in the forecast for the southern U.S. Plains, Minneapolis supported by expectations for continued solid demand for higher protein varieties). Live and feeder cattle higher and lean hogs all higher – the meats were up at midday and there was spillover from the broader market, with big gains in the major stock indices despite the lack of a declaration for the presidential race.
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