As Tropical Storm Cindy made landfall in Louisiana this week, citizens and market watchers braced for its impact.
One big concern was that the storm could flood rice-growing areas of Louisiana, which sent prices to a one-year high at 11.5 cents per pound on Monday as storm watchers warned of flood risks. Luckily, the damage to fields was largely contained, which knocked prices swiftly lower by Friday.
As the remnants of the storm continue inland through Arkansas and into the Corn Belt, the storm will bring heavy rain to Midwestern farmers, which should ultimately help the growing corn and soybean crops, which sent prices for both markets to the lowest level of the year.
As of midday Friday, corn for delivery in December was worth $3.78 per bushel, while November soybeans sold for $9.09.
Oil Prices Slump
Crude oil prices tumbled to a ten-month low as U.S. oil producers continue pumping more oil.
Despite falling prices, U.S. drillers have been adding oil wells for 22 weeks in a row, and are now producing 8% more crude oil than last year. However, many of the U.S. wells are likely running at a loss, so further price drops could force a cutback and eventually shoot prices back higher.
The U.S. and others nations like Libya and Nigeria are counteracting the recent production cuts by OPEC and Russia, neutralizing their effort to raise prices.
As of midday Friday, August crude oil traded for $43 per barrel.
Brazilian Steaks Banned
The USDA announced a ban of Brazilian beef on Thursday, a move that caused a flurry in the global meat markets.
Brazil is one of the world’s largest beef and poultry exporters, but its beef has been tainted by accusations that major companies bribed meat inspectors, which has resulted in increased scrutiny. Since March, the USDA has turned away over 10% of Brazilian beef imports due to quality concerns before putting an all-out ban in place this week.
For now, U.S. futures markets shrugged off the news, trading unchanged on Friday after the story broke. However, if other countries follow the U.S. in banning Brazilian meat, the global supply chain could be affected and drive prices higher.