Dan Gramza gives Picking Alpha a brief review of the USA grains markets and how May 2017 political and other events can affect the market.
Q.: How did French elections affect grain trade in USA and globally? Do you think the second round will have a different effect?
D.G.: The Primary French elections did not seem to have a great impact on grain trade in the US and globally. The outcome of the second round French election implies stability and membership continuation in the EU. This implies stability for the euro. My expectations for the US dollar is that it will strengthen and will make US grains higher-priced than European product.
Q.: How do ongoing volatile NAFTA negotiations affect grain markets?
D.G.: At the moment, it is only talk and innuendo regarding the NAFTA agreement. There is no clear resolution of how this agreement will look going forward. Until specifics are agreed to is difficult to assess the impact. If the agreement is eliminated, the expectation is the US dollar would get stronger and the Canadian dollar and Mexican peso would get weaker. This could have an impact on the attractiveness of US grain products to the global marketplace.
Q.: Which of the grains futures is most volatile this May? Most stagnating?
D.G.: I am looking for the greatest volatility in the July wheat contract, followed by the July corn contract and the July soybean.
Q.: How is USA planting season situation affecting the grain markets?
D.G.:The US planting season are estimates and it is difficult to assess the true impact. They do provide a measure of what is intended but the reality is there’s a lot that can happen between intention and what is planted and what it yields.
Dan Gramza is President of Gramza Capital Management Inc. and DMG Advisors, LLC. He provides daily market updates from around the globe on subjects ranging from the Nasdaq and currencies to crude oil and grains.