Commodity Futures File by Alex Breitinger en-us Say Goodbye to 0% Interest Rates The Federal Reserve announced this week that it was going to begin the process of unwinding its unprecedented stimulus packages implemented during the last decade. After the financial crisis of 2008, the Fed began accumulating a massive portfolio of mortgages and Treasury bonds to lower interest rates and thereby stimulate the economy. The Fed was successful in driving interest rates near zero, but now it wants to allow rates to rise again, which is leading the Fed to begin selling off its... Fri, 22 Sep 2017 21:08:57 -0400 Florida Oranges Decimated As Hurricane Irma swept through Florida, it brought high winds, tornadoes, drenching rain, and flooding, damaging property across the Sunshine State. The loss of life and property were substantial, but damage was not as severe as feared before the storm made landfall. Among those devastated by Irma were Florida’s orange growers, who are already suffering from the malaise of citrus greening, a disease that has reduced production by 70% over the last decade. The storm may have... Fri, 15 Sep 2017 13:38:39 -0400 Hurricane Markets Hurricanes hitting the Southeast U.S. have typically caused extreme swings in commodity markets as they attempt to assess threats and damage to the natural resources that we depend on for our food, fuel, clothing, and shelter. <b>Citrus Crops</b> – The southern half of Florida is famous for serving as a center of citrus production. Consequently, OJ prices virtually exploded all week with frozen juice for November delivery running from $1.30 per pound just before Labor Day... Fri, 08 Sep 2017 13:37:58 -0400 Hurricane Harvey Hits Texas On Thursday, the National Weather Service reported Tropical Storm Harvey had quickly developed into a major hurricane and was aiming for Texas. Expected to reach Category 3, Harvey could be the worst storm to threaten Texas in decades, posing a grave risk to millions of people and homes. The storm could also damage or shut down oil rigs and refineries on the Gulf Coast and inland where the storm was projected to hit land. As traders watched projections predicting winds exceeding 125... Fri, 25 Aug 2017 13:28:35 -0400 Corn Can't Pop Corn prices continued lower this week, dropping underneath $3.50 per bushel for the first time this year after the USDA showed improving corn crop quality on Monday. The USDA was already projecting an ample 14.2 billion bushel crop, and improving quality could boost the crop size to the second-largest ever. Southern states have begun harvesting this year’s crop and are reporting high yields. However, many private forecasters fear that the crop is in worse shape in Midwestern... Fri, 18 Aug 2017 16:00:51 -0400 'Fire and Fury' Unleashed on Gold & Stocks A war of words between President Trump and North Korean leader Kim Jong-un spooked global investors this week. On Tuesday, President Trump warned that the United States would unleash “fire and fury” on North Korea if it made further threats on the United States. Kim Jong-un responded by threatening to bomb the U.S. island of Guam. On Friday morning, President Trump doubled down, stating that the U.S. has prepared military solutions and are “locked and ready.”... Fri, 11 Aug 2017 13:55:39 -0400 Weedkiller Causes War Farmers are facing a superweed and a super problem dealing with it. The terror, known as pigweed, grows rapidly and produces over 100,000 seeds, allowing it to spread like wildfire, sapping crops of much-needed sunlight, water, and nutrients. Worse yet, pigweed has grown resistant to most common herbicides and often needs to be removed by hand, a time-consuming and expensive prospect for farmers who have hundreds or thousands of acres infested with the weed. Pigweed is susceptible to a... Fri, 04 Aug 2017 13:18:55 -0400 Lumber Market on Fire The lumber market roared near a three-month high this week as wildfires threatened forests and sawmills in British Columbia. There are nearly 400 wildfires ablaze in the Canadian province which is one of the world’s largest exporters of softwood lumber. Lumber futures, traded in Chicago, neared $395 per thousand board feet, the highest price since late April, when the market exploded on threats of a trade war between Canada and the United States. At present, the fires are... Fri, 21 Jul 2017 18:52:05 -0400 Grains Take a Nosedive For the past two weeks, grain markets had been exploding higher on fears of hot and dry weather in the forecast, which could threaten this year’s crop yields. But on Wednesday, the USDA stunned markets lower with a revised outlook for this year’s corn, wheat, and soybean crops, raising estimates for global stockpiles of the three major commodities. The report served as a reminder that global harvests should replace any U.S. production losses, forcing the markets quickly... Fri, 14 Jul 2017 13:20:52 -0400 North Korea Sends Rocket Sky High As Americans celebrated the Fourth of July with rockets glaring red, so too did Kim Jong-un’s regime in North Korea. On Tuesday, North Korea test fired an intercontinental ballistic missile that experts believe could reach Hawaii or Alaska, putting American cities at risk for the first time. The test stood as a clear threat to the United States, and U.S. officials vowed a strong reaction. Despite the increased nuclear threat, commodity markets didn’t react. Crude oil and... Fri, 07 Jul 2017 14:42:07 -0400 Storm Cindy Dumps Rain 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,... Fri, 23 Jun 2017 18:27:19 -0400 Oil Dumps on Supply Jump A surprise rise in U.S. oil inventories sent the market tanking when the Department of Energy released its weekly update on Wednesday. Oil had its biggest one-day loss since March, falling to a one-month low near $45 per barrel. U.S. stockpiles of crude oil, gasoline, and diesel fuel are at historically high levels, which is keeping a lid on fuel prices, even as other global producers are reducing oil output. OPEC nations and Russia have largely been holding to their promise to reduce... Fri, 09 Jun 2017 12:46:36 -0400 Weather Worries Farmers This spring was one of the wettest on record, drenching Midwestern fields and slowing down spring planting. At this point, corn and soybean planting is still nearing complete, but is a bit behind schedule. Even as the final acres are planted, some producers are worried about the condition of the corn and soybean crops. Plants that develop during a wet spring typically don’t build a deep root system, which can make them especially susceptible to dry weather if it hits later in the... Fri, 02 Jun 2017 13:49:11 -0400 Budget Cut Takes Aim at Agriculture The White House’s proposed federal budget includes a $38 billion cut for farm support, the bulk of which rests on a $29.5 billion cut of the federal crop insurance program. Many farmers showed their distaste for Trump’s new budget including the American Soybean Association and National Corn Growers Association which said in a statement, “Targeting the federal crop insurance program is extremely short sighted. It is especially harmful during an extended period of low... Fri, 26 May 2017 15:47:27 -0400 Dollar Drops on Trump Scandal The U.S. dollar and stock markets plunged this week as political scandals swirled in Washington, threatening to derail the Trump administration’s agenda. After President Trump’s election in November, the stock market and U.S. dollar have largely been climbing on expectations of a stronger U.S. economy, a friendlier tax environment, increased infrastructure spending, and higher interest rates. However, after the turmoil of this week, investors feared that political chaos may... Fri, 19 May 2017 11:14:47 -0400 Silver Strikes New Low Silver prices have been mining out new lows over the last month but may have finally bottomed out after striking $16.00 per ounce on Tuesday. Prices fell from recent highs near $18.60 as investors grew fearful of further Federal Reserve interest rate hikes as the U.S. economy is showing increasing signs of strength. Higher interest rates make other investments more appealing than metals that don’t pay interest. For the third time in the last year, prices dropped toward $16,... Fri, 12 May 2017 14:41:15 -0400 Wheat Storms Higher after Snow Last weekend, a massive snowstorm dumped up to 20 inches of snow on western Kansas and nearby states. This late-season storm devastated wheat fields as snow smashed emerging plants and below-freezing temperatures threatened to damage plant growth. Kansas grows 20% of the U.S. wheat crop, and this storm could reduce production by over 50 million bushels. The extent of damage is unknown so far, but crop watchers are scrambling to assess the destruction. Markets initially exploded on the... Fri, 05 May 2017 16:17:06 -0400 Beef Slices Higher Cattle futures charged over $1.30 per pound this week, reaching a 12-month high. Cattle are rallying as steer weights decline and beef export sales continue to boom. Alongside rising beef prices, cattle producers received more great news this week as corn prices fell near a six-month low. Cattle are predominantly fattened up on a diet of corn, making grain costs a major concern for producers. This week’s drop, combined with the rise in cattle futures, are creating significantly... Fri, 21 Apr 2017 16:04:18 -0400 Commodities get Trumped Up Virtually all commodity and currency markets shot upward this week as President Trump stated on Wednesday that the US dollar was “getting too strong.” Gold and silver rallied to new five month highs as the President stated he would prefer the Federal Reserve keep interest rates low and left open the possibility of re-nominating Federal Reserve Chair Janet Yellen once her tenure is over next year. His favoring of a weak U.S. currency and lower interest rates should be bullish... Fri, 14 Apr 2017 13:36:29 -0400 Gold Soars on Syrian Strike Gold and silver exploded on the news of Thursday night’s massive missile attack on a Syrian air base. Speculators and investors, recently enamored and enriched by precious metals, scrambled to buy more of the asset group which typically outperforms during periods of uncertainty, inflation, and military conflicts, all of which converged this week. Gold and silver blew over highs not seen since early November, trading Friday for $1275 and $18.35 per ounce, respectively. Though many... Fri, 07 Apr 2017 11:00:00 -0400