Farming fundamentals

While the ailing global economy is pressuring industrial commodity prices, the agricultural grains markets have some very different fundamental drivers, some of which appear fairly supportive, finds Pauline McCallion

A fter a five-year bull run, agricultural markets took a nose-dive last year nearly as spectacular as that of the much-talked about drop in oil prices. In the grains markets - among the most liquidly traded agricultural markets - wheat lost 28.15% between July 2008 and the end of the year, corn lost 43.40%, and soybeans 40.29%. The Standard and Poor's (S&P) GSCI Agriculture Index dropped by 28.88% in 2008.

Many of the losses seen in the grains markets were due to the mass exodus of speculators