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Dow volatility has limited effect on commodities
Farm financial analysts seem unfazed by recent plunges in the Dow Jones Industrial Average. University of Illinois agri-business lecturer Paul Stoddard tells Brownfield steep moves in the Dow get more attention from the media than from him.
“What the stock market does in a single day, or even a week, or a month, in my opinion doesn’t mean much,” Stoddard told Brownfield Ag News at a Farm Credit Illinois beginning farmer Farm Credit College event referred to as Fresh Roots in Springfield, Illinois.
Virginia Tech ag economist David Kohl says there could be further correction, but he considers the drop to be part of a cycle similar to what happens in farm markets.
“It’s just a natural correction,” Kohl told Brownfield. “There’s an old saying, ‘If it grows too fast, it’s a weed,’ well, the equity markets were growing too fast.”
The Dow is still well above where it was a year ago, said Stoddard, and its effect on commodities is limited.
“I don’t think it has any direct impact,” said Stoddard, “other than it changes the mood a little bit.”
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