Traders blame much of the recent steep decline in prices for soybeans and corn on the intensifying trade quarrel between the U.S. and China. They’re right, but it’s a dispute that may eventually feed still more demand for the grains, reports Market Watch.
“There can be little doubt the U.S.-China trade dispute is one of the reasons grains prices are falling so precipitously, because it is keeping investors on the sidelines while they wait for the dust to settle,” says Sal Gilbertie, president and chief investment officer at Teucrium Trading. However, “there is little lasting price impact that can result.”
“The Chinese, and everyone else for that matter, must still feed their people, herds, and flocks, which means demand for grains won’t be seriously affected by the imposition of tariffs,” said Gilbertie, whose longer-term outlook is for a rebound.
Read the full report here.