The coronavirus pandemic led to a wild year for the Ag sector and the economy. A market analyst believes things are looking positive for grain and livestock markets heading into 2021.
Bill Moore is a senior account executive with Price Futures Group in Chicago. He recently told the Iowa Agribusiness Radio Network that the COVID-19 vaccine developments are expected to help strengthen the economy, which in turn should benefit farm markets in 2021.
?The bullish wildcard to me on the grains would be the economy,? Moore said. ?The three stock indexes have made record highs and COVID still has got us by the throat. It may be worse cases in a lot of states than it was the whole time since it started in February.?
?Despite that,? he continued, ?the Dow Jones, NASDAQ, and S&P 500 are at record highs. So, what happens when the economy really starts to get going when this vaccine starts to kick in? I just think 2021 is going to be a great year economically and I believe that will spread to the grains and meats. I?m real optimistic off of that going into 2021.?
For the short term, Moore says a lot of focus is on South American weather. Reports say rains look to favor central Brazil and northern Argentina, with northern Brazil getting the short end of the stick.
?South America has gotten some rains in Argentina,? Moore said. ?But it?s just not enough. They never seem to get enough rain. That?s a big deal. These stocks are on four or five-year lows. Unlike back in February when we were talking about record stocks and record crops everywhere, the game has changed since then big time. It?s not going to take a full-fledged drought in South America to impact these markets.?
On Wednesday, Jim McCormick, branch manager of Ag Market Net, said the weaker dollar is another factor to keep a close eye on as it could help drive prices higher in 2021.
