Energy, El Niño and Geopolitics Fuel Bullish Grain Market

Corn, soybean, and wheat markets have seen on-and-off volatility, with several factors driving US grain prices higher. Owen Wagner, grains and oilseed analyst with Rabobank, has insight on what is behind this movement.

“We've seen volatility in energy markets is not new. Talk to any trade energy trader about that, and you know, as a growing share of US ag commodities have been roped into the energy complex, we sort of have to have to take the good with the bad. So, I would say that's that's probably the biggest aspect of it. You know, I do think that the commodity markets have become a little less focused on the day to day headlines related to sort of the brinksmanship in trade negotiations, so that's a positive, but you know, again, there's there's no turning our back on, you know, $120 oil falling back to, you know, oil prices below 80 bucks, that's just gonna, that's just gonna instill a ton of volatility in ag commodity markets.”

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In addition, weather is adding to the bullish tone of the markets. US production concerns are mounting, with excessive rainfall slowing progress in the east, while drought continues to deepen across the west. Globally, crop worries are expanding as the strengthening El Niño pattern threatens to disrupt growing seasons in multiple regions, and with geopolitical uncertainty, with the US-Iran peace agreement being signed, but for a limited time, and weather turning more problematic, market players continue to be cautious.