After being wrapped up in the day-to-day movement of grain prices, I often find it helpful to take time out and look around at how other markets are doing. Getting a larger perspective helps one see the ebbs and flows of the world's wealth and where grain markets fall in the scheme of things. Among financial assets, holders of 30-year U.S. Treasury bonds gained 12% as of July 15, 2016 while stocks represented by Morgan Stanley's All-Country World Index were up 3%. Bonds' benefited from slow growth throughout most of the world and in the U.S., which is also allowing the Federal Reserve to stay cautious when it comes to raising interest rates. Numerous warnings from world leaders that Brexit would further slow world growth also added to bonds' appeal early in 2016.
In the world of commodities, it would be easy to guess from corn's new contract low in early-July that things haven't gone well, but actually the landscape has been more bullish than one might guess as 18 out of 25 commodities I track were higher on July 15 than where they started the year. Of the 18 commodities that were higher, 10 have out-performed T-bonds with silver and soybean meal posting gains of 46% and 40% respectively. Like bonds, silver prices are being helped by the Fed's slow approach to raising rates, but are also benefitting from increased industrial demand.