THE grain market does not always operate in isolation.
What happens in other markets has an impact, especially in areas that have an effect in the broader economy.
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Agricultural commodities are impacted by the wider economy.
When there is a buoyant economy, spending increases, which can flow into agricultural commodities.
An indicator of a strong economy is crude oil.
The two charts show the relationship between canola/wheat and crude oil, which over time they tend to display similar trends.
Crude oil has been downward since the middle of the year, but there is a great deal of uncertainty in the wider macro environment at the moment.
There are, however, major concerns for the broader economy.
If we look across the lead indicators, we can see a declining Baltic Dry Index, Crude oil and copper.
These are some indicators which are somewhat a lead indicator of economic prosperity.
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