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Wednesday, Sep. 17, 2014

Oats Roll Upward

Posted Friday, February 4, 2011, at 1:57 PM

Although oats are often thought of as horse feed or hippie food, they suddenly have become mainstream, both among consumers and investors. Rising corn, wheat and soybean prices are forcing grain consumers to look for cheaper alternatives, like oats. Health advocates have begun touting oats' ability to prevent heart disease, and a prominent fast food chain has even begun offering oatmeal on their menu.

This renewed interest in oats has pushed prices sharply higher, sending them to the second-highest price in history. Over the last eight months, oat prices have risen $2.26 per bushel, or 120%. As of midday Friday, oats for March delivery were trading at $4.14 per bushel.

Petroleum Spikes Higher

After giving consumers a brief reprieve last week, the energy markets rocketed higher yet again. Crude oil, gasoline and heating oil prices all rose sharply over the last week, driven by freezing temperatures and uncertainty in the Middle East.

Fearing that the crisis in Egypt could spread to other oil-rich authoritarian regimes in the Middle East like Saudi Arabia, crude oil prices pushed near two-year highs again Monday. There has also been speculation that the conflict in Egypt could threaten the Suez Canal, which serves as a gateway for crude oil from the Middle East to Europe and the United States. Around 4.5% of the world's crude oil passes through Egypt, and further conflict there could force shippers to travel around Africa, delaying shipments and increasing expenses.

As of midday Friday, crude oil was trading near $89.50 per barrel, up $4.50 (+5%) in 7 days. Some analysts warn that prices could decline just as quickly if the risk of problems in the Middle East diminishes.

Copper is Red-Hot

The copper market made new all-time highs again Friday morning, reaching $4.61 per pound. Copper has risen 68% in the last seven months amidst tight worldwide supplies, as global demand is outstripping production.

Copper gained this week on the news that the U.S. unemployment fell to the lowest level since 2009 as the manufacturing sector has been expanding, indicating increased demand for the red metal. Copper is essential to the automobile, electronic and housing sectors, where it is used for conducting electricity and piping. As of midday Friday, copper for March delivery was trading at $4.58 per pound.



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Commodity Futures File
Alex Breitinger
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Alex Breitinger, a 2009 graduate of DePauw University, is a commodity futures broker with Breitinger & Sons, LLC in Valparaiso. He can be reached at 800-411-FUTURES (3888) or online at www.indianafutures.com.
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