Last week's successful referendum vote for the United Kingdom (U.K.) to leave the European Union rocked the markets on Friday, with the British pound taking a significant hit.
Senior market analyst Neil Townsend of FarmLink Marketing Solutions says the vote's result came as a surprise to the market, creating a nervous contagion, however he says this vote and subsequent market impacts shouldn't create a big reaction in agricultural commodities like corn or soybeans, as they're not necessarily tied to the U.K. — although it did create some movement.
"The market's nervous so they're pulling back and they're taking things down, so I mean, you know at various points (on Friday) we saw corn down maybe four or five per cent, and it's come back a bit, soybeans were down a bit, but I mean the markets were confused. They don't know what to do, they're just in a little bit of a panic," Townsend says.
Townsend says heading into a new week, it's hard to predict what will happen, but he thinks the shock over Brexit will move into the background, with new information and news coming to the market.
"I think the big (factor) for commodities, or the ag commodities, is just the weather patterns," He says. "You know, if the weather patterns continue to look good, if there's good rain, not too much rain, and the heat kind of dissipates a bit, then you could see corn and soybeans continue to kind of trend sideways or down, and vice versa."
Source : Portageonline