If you’re looking for a bull run forget Wall Street; instead check out Iowa. U.S. corn futures hit record highs on Friday, propelled by excessive rains in the Midwest which are threatening to cut crop production amid robust global demand and surging crude oil prices.
Analysts said the grain market is likely to extend gains in the weeks ahead as the dollar continues to weaken and rains reduce output.
"The dollar is going to remain on the down trend and it's good for the prices of commodities that are priced in dollars," said Greg Smith, managing director of London-based commodities analyst Fat Prophets.
Sure those high commodity prices are good for farmers but what about consumers. Just how much will be passed along? For insights we turn to Tyson CEO Richard Bond.
Following is a summary of the main points he made on Fast Money.
Are you able to pass along your costs at Tyson?
"Our business is tough especially on the chicken side," says Bond. "With corn and soybeans going up as much as they have ,we haven’t been able to pass those costs through to the consumers. So I’d say meat inflation hasn’t really even hit the consumer. We’re working on putting through as many increases as we can but it hasn’t been easy."
Any thoughts on how to curb the problem?
"It’s difficult to anticipate costs given in a week we can see corn move $1 a bushel. I’m hoping that corn is near its top so we can catch up. Ethanol policy and CFTC policy would help. They would curb inflation from an input standpoint," replies Bond.
To see the entire interview with Tyson CEO Richard Bond please watch the video.