Monday’s stock market dip may have sent shivers down the spines of most investors but one agriculture market analyst is offering some words of comfort.
Jon Driedger with FarmLink said grain markets have been relatively unaffected by the markets' turmoil
"To some extent there is some spillover influence where grain markets are not completely an island onto themselves but if you look at really the volatility we've seen in outside markets and quite frankly in crude oil and the Canadian dollar, really grain markets are largely unscathed," Driedger said.
Spring wheat closed on Tuesday at 608-2s, up 6-4 from the morning. Wheat, Oats and Soybeans also saw increases.
Dridger noted the grain markets were down a bit on Monday but he attributed the drop to some fundamental reasons such as better rain in Argentina and trader positioning.
"Given the volatility we have seen in outside markets, grains have largely traded as you might expect for the most part based on the fundamental news coming into the market," he said.
Finance Minister Bill Morneau played down Monday’s massive selloff, saying essentially the economy is in good shape. Looking ahead, Driedger said grain markets are relatively benign as most crops are well supplied globally even though there is some caution about dryness in the prairies. He added large old crop stocks also act as a buffer.
"Unless something changes in a really dramatic way that should continue to be the trend," Driedger said.
On Twitter: @nigelmaxwell
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