The “Trump Trade” that buoyed Wall Street after the election is showing plenty of cracks as markets second guess the new president amid a world filled with trouble spots and surprise. One leg of this trade could have a big impact on agriculture, regardless of the policies emanating from Washington.
Hopes for fiscal stimulus from infrastructure spending and tax cuts spurred some on Wall Street to champion commodities as a play to benefit from an untick in inflation and need for raw materials. Instead, inflation slipped in March and commodities have turned tail. The CRB Index, a bushel basket of commodities, broke to new lows for the year on Friday.
Funds appear to be having doubts about commodities, including agriculture. Here’s a look at results from the April 21 Commitment of Traders.