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Oil Drills New Low
Shockingly, oil prices are dropping even as OPEC has maintained its production cuts and geopolitical threats swirl around the world. Under normal conditions, the recent missile tests from North Korea and Iran would spark a major oil rally, but the tests of the past two weeks were received as duds by oil traders.
Crude’s collapse also worried stock market investors and triggered a sell-off on Wall Street, leading to the first weekly decline for U.S. stock markets in over a month.
If oil prices continue dropping, many analysts expect U.S. production to decline, eventually hurting oil-producing communities from Texas to North Dakota, as many drillers need $50 per barrel to turn a profit.
USDA Report Crushes Beans
Soybeans tumbled this week after the USDA raised its expectations for Brazil’s bean crop. Brazil is the world’s second-largest soybean grower and is America’s primary rival for soy exports onto the global market. As Brazil’s crop grows and exports rise, U.S. farmers are forced to lower prices to keep up with our southern competitors.
These concerns knocked beans to near the lowest price of the year, trading down to $9.93 per bushel Friday morning. This price drop comes at a critical time for U.S. farmers who are preparing to plant a record-breaking number of soybean acres this coming season. If prices keep dropping and producers haven’t protected their crop values, some could end up working all year just to lose money.
Data in the report added downward pressure to corn prices also as the Brazilian and Argentinian crops would add to large world supplies. Corn traded to a one-month low on Friday near $3.56 per bushel.
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