Corn prices dove to a five-year low this week, driven lower by heavy supplies of the grain. On Tuesday, the USDA released its quarterly grain stockpile report, showing a whopping 1.236 billion bushels of corn leftover from last year.
Meanwhile, as farmers begin harvesting this year's crop, conditions are better than had been anticipated, indicating that this year's record-breaking crop is likely larger than previously thought, seemingly confirming an old trader's adage "big crops get bigger, small crops get smaller."
The pending flood of grain onto the market knocked corn prices as low as $3.18 per bushel this week, the lowest price since 2009. Longer-term, some farmers are concerned about their ability to stay afloat if prices remain depressed, although many have pre-sold their crop at higher levels, giving them some protection from recent declines.
As corn prices declined, so too did Kansas City wheat and soybeans, which fell to multiyear lows at $5.51 and $9.04 per bushel, respectively.
Gasoline and diesel fuel prices slid lower this week, each hitting multiyear lows. The markets are dropping as the summer driving season ends and cheap crude oil is keeping costs for refineries low.
US crude oil prices fell near $88 per barrel on Thursday, the lowest price in over a year, pulled downward by rising domestic crude oil production that stands at a 28-year high. Meanwhile, despite conflicts in the Middle East, OPEC's production remains strong, creating a glut of crude oil in the global marketplace. Saudi Arabia, which has acted to keep prices higher, signaled that they are willing to leave world supplies at record levels.
For gasoline users, the drop at the pump is being aided by falling ethanol prices as well. Produced primarily from corn in the US, ethanol fell to a four-year low this week, trading Friday for $1.49 per gallon.
Copper Melts Lower
The once-red-hot copper market has turned ice-cold, tumbling beneath $3 per pound this week. Just three years ago, prices pushed over $4.50 as the Chinese economy was rapidly expanding, but recent signs of slower growth have undercut the red metal as Chinese stockpiles are reportedly overflowing.
Meanwhile, global copper production continues to rise as mines developed over the last few years come online, damaging prices further. For consumers, this price drop may lead to lower electronics and housing prices, as copper is a major cost component in electrical and plumbing systems.