For the second time this week stock markets around the world are panicking. Chinese stock exchange opened and promptly locked limit down (7%) in 29 minutes today. I am already bored of these stories relating to grain imports. It is my belief that China will eventually increase their imports when their economic issues create bargains for them. We are talking about food here, not luxury condominiums, Demand is not all that elastic. At any rate, trouble there is at least somewhat priced into grains already. Some traders will even move out of higher risk stock market or currency investments and into hard commodities which actually reverses the influence on oil, metals and grains to supportive. “Risk off” would be the buz word to listen for.
The relationship of all of this to our net prices is real, but by the time you work it through the economic chain of events it will hardly be measurable here other than a couple possible immediate shock waves. Don’t get caught up in the panic when it comes to grain sales. If you are in a position of investing in areas outside ag though, you might want to call you broker.