DENVER, CO – Volatility is expected to remain a key component of grain markets throughout the remainder of this year according to economists with CoBank.
During the second quarter of 2021, corn, soybean, and wheat prices all hit 9-year highs on hot weather, widespread drought, and inconsistent swings in Chinese grain purchases.
Those elevated price levels wouldn’t hold, however, as speculative buyers stepped back from the exposure of potential widespread inflation and with the elevated level of volatility in this new phase, CoBank suggests that grain elevators and merchandisers will need to maintain excess liquidity during this period.
Wheat has been the most stable, on a local basis level, while corn price swings have been in a 56¢ range (-40¢ to +16¢) and soybeans have moved within a 44¢ range (-34¢ to +10¢).
CoBank also suggests that the Biden administration’s changing signal on biofuel policy, crop issues in South America, and logistical bottlenecks will continue to drive the volatile nature of the markets.
(SOURCE: All Ag News)