2014 mock says “Agricultural commodities typically provide an expected offset to losses in such assets as conventional debt instruments in times of unexpected inflation”
Does that mean agricultural commodities can hedge inflation? I thought non-storable commodity cannot hedge inflation.
Tricky as it’s not seldom happening. The past year agreeement on the above sentence is that however the agricultural still provide some kind of sufficient hedge to unexpected inflation. No good.
Probably the assumption is that unexpected inflation is caused by the volatile factors like energy and food (which ultimately relates to agriculture). Expected inflation might generally considered as core inflation which strips volatile factors like the above. Since food (agriculture) might be the cause for unexpected inflation, they tend to be a hedge.