Platinum & Palladium White Hot

Platinum and palladium had a searing start to 2017, each gaining over $70 per ounce in the first four days. The two metals are tied closely to the auto market, as they are predominantly used in catalytic convertors to reduce pollution from trucks and cars.

This week, news broke that U.S. auto sales revved higher again in 2016, climbing for a record seven straight years. Americans flocked toward new vehicles as gasoline prices stayed low again last year, often selecting larger SUVs and trucks over more fuel-efficient models.

This rising sign of demand helped boost platinum prices to a two-month high at $980 per ounce, while palladium has rocketed near an 18-month high at $750 per ounce.

Wheat Rises but Beans Fall

Reports of trouble on the Great Plains served as a leavening agent for wheat prices this week, sending the market to new monthly highs.

Oklahoma and Kansas are both major wheat-producing states and their hard red winter wheat crop is suffering from too-dry conditions, which make the crop especially susceptible to the cold temperatures that hammered the states recently. This may result in a lower-quality crop this spring when winter wheat emerges from dormancy across the Midwest.

Hard red winter wheat, traded in Kansas City, fell to a 10-year low in 2016, which makes it the dark-horse favorite among commodity traders for a big move in 2017 if weather conditions worsen.

Meanwhile, soybean prices have been tumbling. Soybeans were one of the few agricultural commodities to climb in 2016, which has encouraged many Midwestern farmers to increase soybean acreage this upcoming spring.

Thanks to the futures markets, they were able to lock in profitable prices for the upcoming crop, which allowed them to confidently commit to planting more beans instead of corn and wheat. However, this projected increase in acreage and farmer pre-selling on the futures markets has already driven prices to a two-month low.

While prices near $10 per bushel are still profitable for most producers, there is concern that prices could fall further if even more acres are committed to soy. One prominent analyst is expecting prices to drop below $7, a ruinous price if his prognosis comes true.