Grain markets have dropped sharply in the last week.

"They've certainly been on a rollercoaster ride over the last month. We hit new contract highs a couple of weeks ago and now in the last week we've seen a steep decline in the futures prices. Certainly the cause of this downturn was the political uncertainty in the Middle East," says Bruce Burnett, Director of Weather and Market Analysis with the Canadian Wheat Board. "

"Our basic feeling is that is probably a temporary market factor and the market will turn around and resume trading more on the fundamentals in the coming weeks," he says.

He notes Libya is not a large grain importer so the situation in Libya does not change the supply and demand fundamentals of the grain market.

"When one examines it closely in terms of ag commodities, it's really, much like the Tunisian and Egyptian scenarios, going to be a non-event in terms of the import disruption caused by the unrest. People in this region still need to eat. We should see imports resume shortly, and again, they're not a large country in terms of imports anyway," he says.

~ Monday, February 28, 2011 ~