Commodity Futures File
Opinions are solely the writer’s. Derrick Hermesch is a commodity futures broker with Pinion. He can be reached at 785-338-9605. This is not a solicitation of any order to buy or sell any market.
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Threading the Economic Needle
Posted Friday, July 12, 2024, at 2:50 PMThe U.S. payroll report released last week revealed that the unemployment rate had risen to 4.1 percent, the highest since November of 2021. A fair-enough number in most any economic time, but if rising unemployment continues to be the trend, it will start to be a concern. That was the bad or mediocre news... -
Hurricane Beryl: Friend or Foe?
Posted Friday, July 5, 2024, at 1:38 PMHurricanes are not typically a welcome sight, and for a few islands in the Caribbean, Hurricane Beryl was a train wreck. But as Beryl steamrolled across the Atlantic into the Caribbean as a Category 5 storm, it weakened considerably as it hit the Gulf waters and alternate wind shear, taking it from a Category 5 to a Category 2 hurricane early Friday morning as it made landfall over the north end of the Yucatán Peninsula... -
Take Me Home, Consumer Price Index
Posted Friday, June 14, 2024, at 3:38 PMThe May 2024 CPI numbers were released on Wednesday, and monthly CPI was unchanged month-on-month and up 3.3 percent over the last 12 months. That is the lowest monthly inflation number in two years. It also marks exactly one year of stable yearly inflation that has stayed between three and four percent. ... -
Pork Price Collapse
Posted Friday, June 7, 2024, at 1:51 PMThe month of May can be a frustrating month for hog traders. The basic seasonal pattern for hog prices is higher in the summer months (June-July) and lower in the fall/winter (October-December). As temperatures heat up in the summer, hogs spend more energy keeping cool and eating less. Cold winter temperatures have less of an effect as most finishing operations are confined, allowing the pigs to pack on the pounds with ease... -
Sell in May and Go Away?
Posted Friday, May 31, 2024, at 2:34 PMThere are many old trading sayings. “Sell in May and go away” is one of the well-known ones referring to stock market investors who bail on stocks in the summer months, when returns tend to moderate, and reinvest in the fall. Of the three main stock indices, the Dow Jones took the biggest hit to the downside this week. ... -
Crazy Ivan
Posted Friday, May 24, 2024, at 2:50 PM1Wheat futures have rallied in the last month, gaining $1.50/bu (28 percent) in both the front month KC and Chicago wheat futures. In that same timeframe there have been corrective dips of 4.5 percent or greater three separate times for the July KC wheat contract. April 29-May 1 was a three-day drop of $.41/bu high to low, May 7-May 9 incurred a two-day price drop of $.325/bu high to low and May 13-May 17 was a four-day drop of $.37/bu high to low... -
Small Victory in Stability
Posted Friday, May 17, 2024, at 2:06 PMMonthly Consumer Price Index (CPI) numbers were released Wednesday. The April CPI rose 0.3 percent, below estimates of 0.4 percent, with annual CPI at 3.4 percent, down from 3.5 percent last month. Core CPI (all items less food and energy) rose the same 0.3 percent last month, bringing the annual Core CPI to 3.6 percent down from 3.8 percent last month... -
Weather or Not
Posted Friday, May 10, 2024, at 1:39 PMWheat futures have rallied over $1/bu in the last month, a nearly 20-percent increase in total contract value. Depressed prices from December through March left room for a positive bounce should something bullish begin to percolate. Drought-stricken wheat country in the western plains was a big reason for the rally early on, but there have been rains touch down in some key spots over the last three weeks. ... -
Mayday: This is Cocoa, We’re Going Down
Posted Friday, May 3, 2024, at 3:05 PMThe mystery knock on cocoa’s door this week did not leave a bouquet of flowers or candy. Cocoa prices have plummeted nearly 30 percent in just two weeks, topping out at almost $12,000 per ton back on April 19 for the most-active contract and falling to a low this week of $6,990 per ton before recovering Friday morning. A 40-percent drop from the all-time high to the most recent low... -
Flour Power
Posted Friday, April 26, 2024, at 2:06 PMWheat futures were up across the board this week with a strong move that broke through several technical resistance levels. July KC Wheat futures were trading around $6.50 Friday morning, up 11 percent on the week. July Chicago Wheat futures were trading near $6.25 and up 10 percent for the week as well. ... -
Tit for Tat
Posted Friday, April 19, 2024, at 2:31 PMIran and Israel traded missile/drone fire in the last week which could be the beginning of a more serious geo-political issue, with the effects reaching far beyond the Iron Dome. Or it could just be another brick in the wall of Middle East scuffles that bring pain and discomfort in the short term for those immediately affected, but change nothing fundamentally in the long term for themselves or the rest of the world... -
Interest Rate Daze
Posted Saturday, April 13, 2024, at 7:29 PMInflation numbers reported this week showed the Consumer Price Index (CPI) was up 0.4 percent in March, which was higher than expectations and higher than February’s pace, putting the annual rate of inflation at 3.5 percent above last month's reported 3.2 percent. Core (CPI) was up 0.4 percent as well, though the annual figure remained unchanged at 3.8 percent... -
Gold Bugs Big Day
Posted Friday, April 5, 2024, at 2:36 PMThe front-month gold future contract reached $2,300/ounce this week, a new all-time high and a gain of 11 percent since the start of the year. To put things in perspective, if you pull up a monthly chart of gold you can see a steady climb in value from the early 2000s that accelerated in 2008 after the home mortgage crisis and the government bailout packages that came with it... -
Cocoa Can’t Stop, Won’t Stop
Posted Friday, March 22, 2024, at 12:54 PMMay cocoa futures traded as high as $8,900/metric ton this week, which is more than double the value of where it started the year at an already historically high level. The short supply story due to adverse weather impacting the West African nations of the Ivory Coast and Ghana are well publicized at this point and have been for some time. It was first reported here on Feb. 9 and was a widespread discussion at the time in media spaces that follow commodities... -
Interest Rate Cut Parties Postponed
Posted Friday, March 15, 2024, at 1:21 PMThe March Consumer Price Index (CPI) report covering the month of February was released this week. Core CPI was up 0.4 percent month on month (MoM) and 3.8 percent year on year (YoY). That is an increase from the 0.3 percent shown for the month of January... -
Commodity Boom
Posted Friday, March 8, 2024, at 2:19 PMIt has been a strong two weeks–two months for most commodity futures that are actively traded. Gold led the precious metal band higher this week, making new all-time highs and closing above $2150/oz on Wednesday for the first time ever... -
No Fear for Record Fund Grain Shorts
Posted Friday, March 1, 2024, at 2:36 PMThe Commitments of Traders report from last Friday, Feb. 23 revealed that managed money was short 340,732 contracts of corn. This was a new record short position for the funds, passing the old record of 322,215 contracts set back in late-April 2019. ... -
Equities Pause and Reflect Positive Nvidia Earnings Report
Posted Friday, February 23, 2024, at 2:37 PMThe S&P, Dow Jones and Nasdaq indices have moved sharply higher since last November, with all three markets making new all-time highs in the month of February. Equities took a step back from new highs last week and had the look of a market that might have peaked temporarily and due for a break. ... -
The Softs Will Rise Again
Posted Friday, February 16, 2024, at 2:39 PMA majority of the soft commodities, the label applied to the basket of commodities including cocoa, sugar, coffee, orange juice and cotton, have exhibited a significant increase in price since the start of the year. The futures rally has been the most significant in the cocoa and sugar markets, with both seeing a 20 percent-or-better increase in total price since the first of the year and cocoa trading to all-time highs of $6,039 per metric ton this week... -
Chocolate Kisses New All-Time Highs
Posted Friday, February 9, 2024, at 2:36 PMCocoa futures prices made new all-time highs on Friday, with the March Cocoa futures soaring to $6,030/metric ton before reversing course and trading lower. Abnormally dry conditions in West Africa, where more than half of the world’s cocoa is produced in the Ivory Coast and Ghana, is the fundamental push behind this price move. ...
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