A Biden victory could result in a price dip, a commodity strategist said
By Diego Flammini
Staff Writer
Farms.com
Americans are heading to the polls Tuesday to decide whether to give President Trump another four years in the White House or give Joe Biden an opportunity to take the country in a different direction.
Does the presidential election affect grain markets?
Maybe not in the early stages. But once the results are in, it could, said Moe Agostino, chief commodity strategist with Farms.com Risk Management.
“There’s no clear direction, as every election is different,” he said. “In 2016, prices fell hard, then had a big rally when we found out Trump won. Who’s in office doesn’t matter; long-term policy and trade matters.”
On Nov. 8, 2016, when Donald Trump defeated Hillary Clinton for the presidency, corn prices were around $3.54 per bushel and soybean prices were around $10.11/bu.
The following day, the commodity prices dropped to $3.41 and $9.91/bu, respectively.
Corn and soybean prices would steadily increase during the end of 2016 and into January 2017.
So, how could the outcome of the 2020 election affect grain prices?
It depends on who wins the White House, Agostino said.
“If Biden wins, short-term commodity prices would be lower,” he said. “But if Trump is re-elected, there is some certainty with him and there could be a relief rally.”
Let’s look at how grain prices fared on and after past U.S. presidential election days.
On Nov. 6, 2012, when President Obama defeated Mitt Romney to win his second term, corn prices were around $7.41/bu. Soybean prices were higher than $15/bu.
By Jan. 22, 2013, two days after inauguration, corn prices had dropped to $7.29 per bushel and soybean prices fell to around $14.52 per bushel.
Going back even further, commodity prices also fluctuated on election day in 2000 when George W. Bush defeated Al Gore for the presidency.
When voters cast their ballots on Nov. 7, 2000, corn prices were around $2.15/bu and soybeans were selling for around $4.86/bu.
Two days after inauguration in 2001, corn prices remained at $2.15/bu and soybeans had dropped to $4.77/bu.