The election and the grain markets

After 18 months of build up that included rallies, debates and excessive political advertising, Election Day is finally near. Many were eyeing the polls through all of the rhetoric, accusations and spin, but after a new President is elected, on lookers will still have something to watch — the markets.

“I’ve been doing this since 1995 and I have never seen two candidates that wanted to take such a hard look at trade policy,” said Mike Zuzolo of Global Commodity Analytics. “I don’t think the dollar and currency markets are going to like that very much no matter the outcome at the polls.”

After months of not messing with interest rates, the Federal Reserve will have a decision to make under a new administration.

“Based on who wins, traders are wondering if the Federal Reserve will feel compelled and even pressured to keep quantitative easing in place and keep the dollar and deflation elevation as a result,” Zuzolo said. “That result obviously would not be good for the commodity sector.

“I can’t remember an election time period where the market is on such pins and needles and a stronger dollar is our greatest threat to the storing of corn heading into winter, in my opinion.”

Zuzolo points out that the wheat trades so closely with the dollar in an opposite direction, so that is a commodity that will have his attention after votes have been cast and the transition to a new President begins.

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