Political factors can greatly influence soft commodity prices. Grain subsidies in US states – as a way to sweeten a huge voting bloc ahead of an election in an agricultural state – can drive one price down at the expense of a less politically favoured commodity, as the policy creates an excess of supply and deflates the price.
Six things to consider when trading soft commodities
Political factors can greatly influence soft commodity prices. Grain subsidies in US states – as a way to sweeten a huge voting bloc ahead of an election in an agricultural state – can drive one price down at the expense of a less politically favoured commodity, as the policy creates an excess of supply and deflates the price.