Economy’s impact on commodities
There are more signs of an improving economy that are supporting commodity values. This isn't just in the United States, but around the world. The global economy has rebounded 5.6% this year and is expected to show another 4% of growth next year. As a result, more consumer spending is expected.
One sign of the improvement is an increase in energy product demand. Gasoline demand in the United States last week was the highest of the past year as more travel restrictions from COVID-19 are lifted.
There are now thoughts that by summer we will see gasoline demand approach 2019 levels as more easing of restrictions takes place. In turn, this is elevating ethanol demand. If gasoline demand rebounds as much as estimated, it could add as much as 200 million bushels of corn demand to the current projection.
This improvement is also raising projections on meat demand. Consumers are starting to travel more, and as they do, they are eating out more as well.
Typically, when consumers dine out, they buy higher ...
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