Dividend Slump and Ag Market Signals

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Dividend Slump and Ag Market Signals

By Erik Norland, Senior Economist, CME Group

Investors Expect Dividends to Decline in 2020s

  • ​​​​Investors expect dividends in real terms  to decline 15.4% by 2031.
  • The expectations are based on a compounded inflation rate of 29.4%.
  • Dividends grew by an inflation-adjusted 115% from 2010 to 2020.
  • Higher bond yields and inflation could pose risk to equity valuations.
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Signals from Ag Options and Futures

  • Rebound in global economy, inclement weather rally corn, soy, and wheat.
  • Implied volatility in corn is at the highest since the 2008-2012 period.
  • High volatility in corn, wheat expected to moderate in late 2021.
  • Traders expect wide range in prices: from record highs to the lows set in 2000.
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