A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Pierre Pagesse.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
A look at the news

A chill on agricultural commodities

16 May 2011


It was first the dollar that rose considerably in early May, then oil collapsed, taking with it precious metals and agricultural commodities.

Corn, wheat and soybeans fell by 2% to 3% for the single day of 5th May, and in total, the commodity index has plunged 5%. We are witnessing its greatest depression since the beginning of the financial crisis in 2008 and according to experts, one of the most serious in its history.

Financial players have been quick to react. Following the meeting of Thursday 5th May, they described the fall as a "crash" and the trading session as "historic". Some brokers have even predicted that the speculative bubble that has formed over two years on all raw materials will burst. However, a few days later websites specializing in financial advice were already advising: "Do not miss the new phase of rising raw materials". A sign that the crash is already over for financial players?

Clearly, this dramatic drop is a characteristic of agricultural commodities markets. And as we already pointed out a few weeks ago1, this volatility is not simply due to imbalances on physical markets, but to new factors that have turned agricultural markets into complex markets of anticipation.

In the case of the "crash" of 5th May, according to the President of the European Central Bank, Jean-Claude Trichet it was simply a variation in euro/dollar exchange rates that caused the problem. A sign which confirms yet again that price volatility on agricultural commodities is increasingly linked to decisions on financial markets. The next G20 summit, which deals with this issue, is eagerly awaited.

1 Cf article momagri du 02/05/11 : http://www.momagri.org/UK/a-look-at-the-news/The-Weather-Market-when-speculators-play-with-the-weather_899.html
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