Commodity Futures File by Alex Breitinger en-us 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 Record Soybeans to be Planted Soybeans plummeted on Friday following new USDA projections expecting U.S. farmers to plant a record 89.5 million acres of soybeans this year. This news was coupled with relatively high stockpiles of beans, another factor that undercut prices. In the aftermath of the report, soybeans dropped under $9.50 per bushel for the first time since last fall. Meanwhile, corn and wheat prices held steady as acreage projections for those grains were reduced. Unlike corn and wheat, crops that U.S.... Fri, 31 Mar 2017 13:17:02 -0400 Stormy Outlook for USDA Under President Trump’s budget proposal for 2018, the USDA would see a sharp 21% decrease in funding. This news was initially met with trepidation by rural communities, but the plan is unlikely to have as severe an impact as the topline number might suggest. The proposal only impacts the USDA’s discretionary budget, which is less than one-fifth of the USDA’s overall budget, leaving major programs like crop insurance and food stamps largely untouched. However, the... Fri, 17 Mar 2017 13:19:46 -0400 Oil Drills New Low Oil broke to a three-month low on Friday, dropping under $49 per barrel as the market struggles with oversupply. Prices are falling as U.S. shale oil drillers have increased production while U.S. imports of oil rose as well, swelling U.S. oil stockpiles to record highs. 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... Fri, 10 Mar 2017 14:53:19 -0500 Bio-Fueled Grain Rally Corn and soybean prices exploded on Tuesday on rumors of a new deal to change regulations surrounding biofuels. The plan was submitted to the White House by the Renewable Fuels Association and Carl Icahn, a billionaire investor and Trump adviser. The deal would curb foreign imports and boost demand for domestically-produced biofuels like soy-based biodiesel and corn-based ethanol. At the Chicago Board of Trade, the biggest gainer was soybean oil, which is used to produce biodiesel; that... Fri, 03 Mar 2017 13:17:27 -0500 Gold and Silver Streak Higher Gold and silver continued rallying this week, reaching the highest level since early November. Prices are exploding on political uncertainty, both in the U.S. and Europe. Some traders are concerned that President Trump’s economic policies could spark inflation, boosting demand for precious metals, which are typically seen as a safe haven against rising prices. After Great Britain voted to leave the EU last year, other Europeans have been pushing to leave as well. In France,... Fri, 24 Feb 2017 13:10:43 -0500 Heat Wave Deflates Gas Prices Natural gas prices are collapsing, reaching a three-month low near $2.83 per million British thermal units. The market is selling off as temperatures across the U.S. are projected to be 15-30 degrees warmer than usual this weekend, sapping demand for the heating fuel. Overall, this winter was extremely warm; the National Oceanographic and Atmospheric Administration (NOAA), estimates that heating demand for natural gas is nearly 20% below average. Without significant heating demand,... Fri, 17 Feb 2017 13:37:57 -0500 Copper Strikes a New High The copper market is red-hot, nearing a two-year high on Friday at $2.77 per pound. Prices are exploding on news that the world’s largest copper mine is shut down due to a labor strike. Workers at the Chilean Escondida mine are asking for higher wages and have threatened to stop work indefinitely until their demands are met. Chile is the world’s largest copper producer, and this one mine accounts for nearly 5% of global output. While few Americans keep copper as an investment,... Fri, 10 Feb 2017 14:28:18 -0500