The world's most famous and busiest commodity trading pits in Chicago and New York will close later this year, per an announcement from the CME Group earlier this week.
For over 150 years, colorful traders crowded together to buy and sell commodities with a combination of shouting and hand signals, but the pits have largely gone quiet in recent years. In the last two decades, 99% of trading shifted to online platforms, meaning that the closure of the pits won't affect most investors. Today's speculators, now on computers, fill the vital economic role of hedging, buying, and conserving resources on the expectation that society will need them later.
Nonetheless, the loss of the iconic meeting places of both farmers and gamblers will certainly leave a void in traders' hearts. Some described the pits as the embodiment of capitalism and the image of wild traders screaming and shoving has been memorialized in numerous films.
Strikes Fuel a Rally in Gasoline
Gasoline and diesel fuel prices exploded higher as US refinery capacity dropped sharply this week.
Over 10% of US refining capacity is offline due to widespread strikes by refinery workers. Meanwhile, other refineries are shut down for seasonal maintenance as they prepare to make more gasoline for the summer driving season.
As a result of the limited short-term supply, the refined product markets are shooting higher, with gasoline gaining over seven cents and diesel firing up by fifteen cents per gallon.
Meanwhile, crude oil continues to gain steam, despite the short-term cutback in demand from refineries, trading Friday at $53 per barrel.
Pork Grinds Lower
Hog prices fell to a five-year low per pound this week as US pork supplies flood the market.
Last year, hog herds were ravaged by a disease that killed off piglets, but vaccines and herd immunity have helped turn the tide against the disease. As farmers rebuilt their inventory and fattened the animals up on cheap corn, the former shortfall turned quickly into an overwhelming surplus, plunging prices toward 60 cents this week.
The average weight of a market-ready hog has recently climbed to 288 pounds, another factor that is tipping the scales toward lower prices.