Corn and Soybean Price Drop Unrelated to Executive Orders
The Claim
Biden’s executive orders lowered soybean and corn price.
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Emerging story
A tweet shared or liked almost 100,000 times claims that executive orders issued by President Biden caused a sudden drop in corn and soybean prices in the U.S., creating financial hardship for grain farmers.
Misbar’s Analysis
According to Misbar’s investigation, the prices of both commodities did drop significantly at approximately the same time that President Biden was taking office.
However, according to David Mershon, of Andersonsgrain.com, in his January 22, 2021 daily closing comments about the drop in prices, President Biden’s executive orders had little to do with it. According to Mershon: “The sharp losses in prices around that time period were most likely a result of an improved weather forecast in South America which triggered heavy selling in the market.” The biggest drops in the prices also happened before the end of the week, which Mr. Mershon believed it may have to do with investors not wanting to leave money in the market over the weekend. Mershon also believes the sudden price drops point to an even bigger picture: “The fluctuations show how fickle the markets can be.” And, according to Agriculture.com, bullish trends are sometimes vulnerable to self-correction.
There is some nervousness in the agricultural community about President Biden eventually renegotiating the Phase I trade agreement with China and what canceling the Keystone pipeline permit will do to grain prices. However, his initial actions did not address agriculture or trade directly. According to the Federal Register, in his first few days of office, most of President Biden’s executive orders were related to COVID-19.
It is also important to note, that in the time since the steep drop in prices at the end of January, the prices of both corn and soybeans have returned back up to near five year record levels.
