Commodity Futures File by Alex Breitinger http://www.bannergraphic.com/blogs/1500/ en-us Stormy Outlook for USDA http://www.bannergraphic.com/blogs/1500/entry/68540 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 http://www.bannergraphic.com/blogs/1500/entry/68492 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 http://www.bannergraphic.com/blogs/1500/entry/68441 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 http://www.bannergraphic.com/blogs/1500/entry/68396 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 http://www.bannergraphic.com/blogs/1500/entry/68331 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 http://www.bannergraphic.com/blogs/1500/entry/68281 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 Lumber Knocks Higher http://www.bannergraphic.com/blogs/1500/entry/68222 The trade in wood has been good to the bulls recently, with lumber futures reaching a two-year high this week. Prices are exploding as the U.S. wrestles with a looming shortage of the building material and rising construction demand. Much of the lumber used in the United States normally comes from Canada, the world’s largest exporter. That supply could be threatened by an expiring trade deal, resulting in tariffs being levied against Canadian lumber. So far, the U.S. and... Fri, 03 Feb 2017 10:06:43 -0500 Border War Escalates with Mexico http://www.bannergraphic.com/blogs/1500/entry/68164 This week, President Trump reaffirmed his plan to construct a physical wall along the Mexican border and proposed using a 20% tariff on Mexican imports to pay for it. These statements caused Mexican President Enrique Peña Nieto to cancel an upcoming visit to the United States, where the two leaders were expected to discuss the North American Free Trade Agreement (NAFTA). A tariff would cause prices for imported goods to rise, including Mexico’s major exports, vehicles and... Fri, 27 Jan 2017 13:31:30 -0500 Beans Explode http://www.bannergraphic.com/blogs/1500/entry/68066 The USDA updated its estimate of last year’s soybean crop on Thursday morning, revising the crop size downward by 1.1% to 4.307 billion bushels. This news was especially jarring to the market, which expected this estimate to show an even larger harvest. While the 2016 soybean crop was still the largest in history, this downward revision sparked concerns that U.S. supplies may not be as ample as once thought. These fears sent beans on the largest one-day rally in months, gaining nearly 30... Fri, 13 Jan 2017 12:39:21 -0500 Platinum & Palladium White Hot http://www.bannergraphic.com/blogs/1500/entry/68015 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... Fri, 06 Jan 2017 13:47:40 -0500 Winter Beverages Warm Up http://www.bannergraphic.com/blogs/1500/entry/67929 As families circle around Christmas trees, fireplaces, and tables this weekend, they will likely have a warm drink in their hands. As a wonderful year-end gift, commodity markets are delivering lower prices for these drinks, as coffee, cocoa, and sugar prices are all falling just in time for the holidays. Cocoa prices are leading the way down, touching 3-year lows as global supplies are vastly outpacing demand. The Ivory Coast and Ghana, which account for 60% of global cocoa output,... Fri, 23 Dec 2016 18:34:18 -0500 2017: The Year of Rising Rates? http://www.bannergraphic.com/blogs/1500/entry/67881 On Wednesday, the Federal Reserve raised interest rates in a move that was widely expected, taking the short-term Federal Funds rate up to 0.75%. More surprisingly, the Fed raised its long-term expectations for interest rates, indicating that they expect to raise rates another three times in 2017, essentially doubling short-term rates. The Fed is returning interest rates to normal levels after years of near-zero rates that were in place to stimulate the economy by making borrowing... Fri, 16 Dec 2016 17:19:51 -0500 Hog Market Sizzles http://www.bannergraphic.com/blogs/1500/entry/67827 After bottoming at a 14-year low in October, the hog market has begun smoking higher. Prices have rallied nearly 40%, with December lean hogs topping 57 cents per pound Friday. Some of the rally has been sparked by investors taking advantage of rock-bottom prices, but supply and demand factors are boosting values as well. Prices are warming up as the temperature sinks; cold weather makes it harder for animals to gain weight, limiting the supply of meat. Meanwhile, meatpackers have... Fri, 09 Dec 2016 13:48:44 -0500 Oil Booms on OPEC Cuts http://www.bannergraphic.com/blogs/1500/entry/67768 After months of wrangling, the Organization of the Petroleum Exporting Countries (OPEC) announced that its members had agreed to collectively reduce oil output by 1.2 million barrels per day (-3.6%). This announcement, made early Wednesday morning, started the biggest one-day rally in nearly a year and rocketed prices back over $51 per barrel. Despite the market’s initial reaction, some are skeptical that the individual countries will each follow through with their promise to cut;... Fri, 02 Dec 2016 14:53:34 -0500 Give Thanks for Low Food Prices http://www.bannergraphic.com/blogs/1500/entry/67704 As Americans give thanks this year, they should include lower food prices in their list of blessings. A record-breaking corn and soybean harvest and large global supplies of wheat have helped pull grain prices to multi-year lows, making most foods less expensive this season. Low-cost grain especially helps lessen the price of most animal products, as livestock are widely fed a diet of corn and soybeans. Cattle, hog, and milk futures all recently dropped to the cheapest price in years.... Thu, 24 Nov 2016 16:56:06 -0500 Turmoil Follows Trump Triumph http://www.bannergraphic.com/blogs/1500/entry/67609 This week marked one of the wildest and highest-volume trading periods in US history, with booms and busts surrounding Tuesday night’s election results. In the first few hours of vote counts, Wall Street boomed on the expectation that Hilary Clinton had strong results in exit polling, which was followed by a fierce collapse in stocks and explosion in gold once early vote tallies showed an extremely close race. Late Tuesday night, before any swing states had been called, Dow futures... Fri, 11 Nov 2016 17:14:48 -0500 Election Presents Golden Opportunity http://www.bannergraphic.com/blogs/1500/entry/67551 As Election Day nears, markets are on edge, as there is increasing uncertainty about Tuesday’s results. Polls are suggesting that more than a dozen states could be in play this year for the presidential race, while numerous Senate races are hotly contested, leaving the balance of power there up for grabs as well. Worries about the future direction of taxes, spending, trade and other policies has led investors to pull out of stocks in favor of gold and silver, which many perceive as a... Fri, 04 Nov 2016 13:17:48 -0400 Oil Market Slides Down http://www.bannergraphic.com/blogs/1500/entry/67480 Less than a month after OPEC announced a plan to collectively reduce oil production to boost prices, it appears that the deal may be falling apart. Originally, all 14 member nations and Russia had agreed to work together to reduce production, but now nations are asking for exemptions from the pact. Iraq, Nigeria, Iran, and Libya have all suggested that they should be able to produce at current levels while the other nations cut back, which could lead to squabbling amongst member... Fri, 28 Oct 2016 13:35:03 -0400 Beef Bounces Back http://www.bannergraphic.com/blogs/1500/entry/67411 Cattle prices exploded this week, rebounding from a six-year low. Prices rose by more than 5.5 cents per pound, “locking limit up” at one point on Thursday, as the market moved the daily maximum of 3 cents per pound. The market was especially active Friday after the market resumed trading as ranchers, meatpackers, and traders positioned themselves ahead of the USDA’s monthly Cattle on Feed Report, which was released after the market closed. Cheap boneless beef is... Fri, 21 Oct 2016 14:26:37 -0400 Corn Rallies, Despite Record Harvest http://www.bannergraphic.com/blogs/1500/entry/67353 Corn prices topped $3.58 per bushel on Friday morning, the highest price in almost three months. Corn is accelerating higher, even as a record crop is coming in out of the field. Over a third of the corn crop has already been harvested, and the USDA is expecting that it will be the largest on record, topping 15 billion bushels. Normally, the harvest onslaught would be depressing prices, but farmers have been holding onto their corn, waiting to sell at higher prices. This is... Fri, 14 Oct 2016 15:02:44 -0400