How the Brexit Vote Affects Southern Minnesota Agriculture
The financial markets, grains, livestock, currencies, you name it, was in turmoil after the United Kingdom voted Thursday to leave the European Union. The results were announced Friday morning and all the agricultural commodities instantly dropped sharply. It was a roller coaster Friday as the markets went back and forth as traders tried to figure out what the impact would be. As I understand the news reports, the plan for the United Kingdom to leave the European Union will not even be developed until their elections this fall. Then it will take two years to slowly implement the plan.
The polls on Wednesday indicated that the vote would be close, but the United Kingdom would stay in the Union. I suppose that is why the markets reacted as they did. Traders were "caught" by surprise with the results. In the big picture I am not sure that this vote will affect farmers much in the United States. However, if their is uncertainty there may be a "flight to quality" and that may result in the dollar index increasing in value. That is what we saw Friday with the dollar index up sharply. Hopefully with the weekend things will calm down and we can get back to focusing on demand and the weather!