Can Commodities Separate from the Financial Market’s Meltdown?

“I think ultimately we'll be able to find [separation]," he says. "But the problem to get into right now is we declared this thing a pandemic on Wednesday and typically what we've been seeing over the last two weeks, and I think the metal markets are a good example of this, is a sell everything first, ask questions later approach.” 

( Farm Journal )

Financial markets have fallen drastically over the last few weeks on coronavirus concerns. So far, the commodity markets have followed suit. Will they be able to separate themselves from the financial market’s meltdown? Sam Hudson with Corn Belt Marketing says commodities “won’t go to zero.”

“I think ultimately we'll be able to find [separation]," he says. "But the problem to get into right now is we declared this thing a pandemic on Wednesday and typically what we've been seeing over the last two weeks, and I think the metal markets are a good example of this, is a sell everything first, ask questions later approach.” 

Hudson says eventually commodities could find “a safe haven.” Still there are challenges ahead. 

“We already had enough of a uphill climb to figure out what fair value was on some things with this phase one agreement, with the trade war and everything else going on,” he said. “This just adds several more wrinkles into the story. And let's not forget about the oil war to going on with the Saudis and Russians.”

At some point fundamentals will take over, Hudson adds. 

For more analysis watch the video below:

 

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