This last year was one of the most turbulent trading periods since 1980, with many markets setting new record highs. Corn, cattle, hogs, gold, silver, copper and cotton all made record high prices this year, driven by a myriad of crises.
Feeding the Cattle Bull Market
The United States was ravaged by bad weather this year, with severe flooding across the Midwest and persistent drought in the Southern Plains. Flooding delayed the planting of this year's corn and soybean crops, with millions of acres submerged and left unplanted this spring. Drought damaged pastureland across Kansas, Oklahoma, and Texas, further limiting the food supply for cattle. Record high corn prices, high soybean prices and a lack of pastureland all hurt the livestock industry this year, pushing live cattle and lean hog prices to record highs this fall.
Middle East Springs Crude Rally
Protests, uprisings and outright revolutions spread across the Middle East this year, creating uncertainty about the future supply of crude oil from that region. The "Arab Spring" resulted in numerous regime changes, including the toppling of Muammar Gaddafi, the dictator who had ruled over oil-rich Libya for 41 years. The uncertainty created by the uprisings, as well as continued concerns about the stability of Iraq and Iran pushed crude oil prices sharply higher, reaching nearly $115 per barrel in May. By year's end, some of the crises had subsided, but crude oil prices remained elevated near $100 per barrel, up $20 per barrel since 2010 (+25 percent).
Debt Crises Shatter Confidence
Overwhelming debt levels in European nations like Greece, Spain, Portugal and Ireland created insecurity in the global financial system, causing investors to fear that those nations would be unable to repay debts. Likewise, the debt ceiling quagmire and ever-growing debt in the United States was a cause for major concern this year.
The primary beneficiary of the European and U.S. debt debacles were the precious metals. Investors worldwide poured into the gold market, pushing the yellow metal to a record high at $1920 in September. By year's end, global fears had subsided, but gold had retained its "safe-haven" reputation, trading near $1580 per ounce (+11 percent).