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·         The Link Between the Dow Drop and Grain Markets

·         USDA Lowers Corn Stocks, Prices Rise



The Link Between the Dow Drop and Grain Markets


By Andy Eubank, Hoosier Ag Today

Feb 7, 2018


The historic record-setting one day point drop for the Dow Monday was largely hailed as positive, a needed correction. It has also been called healthy even though there was certainly fear in the market and an associated drop in 401K’s. Economist Arlan Suderman says the stock market had gone too far, too fast without a correction.


“The underlying economic numbers are still strong, they’re still solid,” he told HAT. “There was a sense that this was eventually going to come and that fear that it was going to come almost help precipitate it. The algorithmic traders kicked in, the computer traders in other words, and it just accelerated down. Usually when you get a big flush like that but you have underlying, solid fundamentals you get a healthier recovery.”


Suderman says the bloom is off the rose, as in the stock market, but he does feel it will continue to recover and possibly over time to new highs. In the meantime, commodities can benefit.


“You’ll probably see some money rolling into alternative investments now. That does include government securities, but the commodities are also well poised to capture that. A healthy economy creates demand for commodities, and if the dollar in particular continues to trend lower, I think that sets up the commodities to be a very attractive alternative now for the equities.”


The chaos ultimately did impact the grain markets. Monday night the VIX index spiked to its highest level in two and a half years…





USDA Lowers Corn Stocks, Prices Rise

U.S. soybean, wheat stocks build.


By Mike McGinnis, Successful Farming - 2/8/2018


DES MOINES, Iowa -- The U.S. soybean and wheat ending stocks are getting bigger, while the corn stocks tighten, according to the USDA.


As a result, corn market reacted positively, while soybeans and wheat markets dropped, following the release of the data.


In its February Supply/Demand Report Thursday, the USDA pegged the U.S. 2017/18 corn ending stocks at 2.352 billion bushels vs. the average estimate of 2.45 billion bushels and the government’s previous estimate of 2.47 billion.


For soybeans, the USDA set the U.S. 2017/18 ending stocks at  530 million bushels vs. the average trade estimate of 496 million bushels and the USDA’s January estimate of 470 million bushels.


The U.S. 2017/18 wheat ending stocks were pegged at 1.009 billion bushels vs. the average trade estimate of 989 million bushels and the USDA’s previous estimate of 989 million.


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