Coffee and sugar prices were the most energized commodities out of all agricultural markets this week. Better demand, reflected by stronger U.S. GDP, stimulated buying from speculators. Global demand, which is also on the mend, helped Arabica coffee futures gain ground. Weather problems in South and Central America have caused coffee stockpiles to remain low. Sugar prices will now largely depend on India’s sugar production, which will be affected by weather there...

Lower natural gas prices should provide a break for homeowners and industrial users, such as fertilizer producers or electricity generators. The mild, somewhat warm winter so far has left both the U.S and European storage much larger than had been expected. ...

The West Coast megadrought, described as the worst in 1,200 years, seemed to be abruptly broken. A series of storms swamped California and brought needed relief to some areas. Thousands experienced flooding, overflowing reservoirs, mudslides and power outages. ...

The two biggest commodity markets as determined by dollar value traded were the two to tumble the most this week. Crude, the world’s king of commodities, had been over $130 per barrel in March 2022. It had a bounce up toward $82 on Tuesday but plunged more than $9 by Thursday. Fears of a Covid-slowed China economy was seen as one cause. Improved relations between President Biden and Saudi Arabia played a role as well...

The war in Ukraine, coronavirus, droughts, floods, fires and sudden rampant inflation combined to make 2022 one of the wildest commodity and financial futures markets in decades. Farmers, miners and other producers, processors, end users, shippers, investors and speculators were affected in new ways. Everyone’s understanding of geo-politics, virology, climatology and even the psychology of the Federal Reserve in setting interest rate policy was challenged...

Ukrainian President Volodymyr Zelenskyy addressed Congress on his first trip abroad since Russia invaded Ukraine. Congress has approved $50 billion in aid since February for financial, humanitarian and military purposes. The role of Ukraine and Russia in grain production and exports and Russia's control of natural gas has focused commodity users and investors on how our legislators will respond...

The world’s second largest, but struggling, economy has suddenly relapsed into a tsunami of Covid that is expected to infect as many as 800 million people. Every aspect of their lives may be affected, including an immediate stress on the supply chain and concurrent commodity prices that could be dramatic. ...

Shortly after the U.S. and its group of seven European allies set a $60 per barrel cap on Russian crude prices, China’s President Xi and Saudi prince Mohammed bin Salmon met on Thursday to discuss crude production levels. That weighty discussion reminded us that both discord and alliances can quickly form as the four key economic powers chime in with incentives and threats, each trying to secure an economic advantage by affecting crude supply and demand...

Republican and Democratic congressional leaders, followed by the Senate’s approval, averted the disastrous rail strike. A freeze on rail transportation could have crippled the U.S. economy by interrupting the supply chain of commodities across the country. ...

Energy prices began the week with a sharp tumble. This came in anticipation of more worldwide production and fears that slowing economies will reduce demand for crude and its products, such as gasoline and diesel fuel. Then Saudi Arabia threw the markets a curveball with a Monday morning announcement stating they would not increase production and might even consider a cut. ...

Two missiles, initially thought to be launched by Russia, crossed into Poland on Tuesday. Two people were killed. Since Poland is a NATO member and the U.S. and other military allies were obligated and prepared to defend Poland militarily, the origin of the missiles was of extreme concern. ...

Wheat and natural gas, two commodities closely associated with the war in Ukraine, took a sharp drop midweek. Ukraine President Zelensky offered “genuine peace talks” and President Putin began pulling troops out of Rherson, a city viewed as important because it has been held by Russia since the early days of the invasion. Troop withdrawal there has been viewed as a sign Russia is losing the war...

The week began with a fast and furious rally in wheat prices in response to President Putin’s warning that Russia would halt grain shipments from Ukraine through the Black Sea. After jumping over 75 cents per bushel in response, wheat made a U-turn falling 75 cents as Putin tempered his threat, stating his halt would not be enforced immediately by his military but only if further negotiations didn’t resolve concerns...

Fears of global recession, higher interest rates, poor exports and rain forecasted in some of our driest areas triggered huge selling and money flows from funds midweek. Thursday brought the biggest crash in weeks for grains, beans, cotton, copper, energies and most other commodity futures. As wheat and corn exceeded four-month lows, traders touted the simple but appropriate reminder that, “What goes up must come down."...

Cattle in Kansas died by the thousands recently. Hogs and poultry farms are suffering too, as livestock are unable to cool down. Record temperatures have suddenly exceeded animals’ ability to cool themselves, both naturally and even in confined feed operations. Overall production levels are compromised because even those faring well in the heat are not eating properly, affecting health and safety...

In addition to production problems related to both the war and dry weather, the storage and export of wheat from Ukraine was further blocked by Russia. Early last week, Russia bombed two major storage facilities in ports on the Black Sea and shut down shipping with naval blockades...

Exports of crude and natural gas continued to be threatened or reduced as geopolitical considerations are being weighed and more nations promise to stop buying fossil fuels from Russia. Though Ukraine is showing resilience, fears are emerging that Putin could turn to tactical nuclear weapons to secure a win. As a result, June crude oil blew over $110 per barrel on Thursday and remained there Friday morning...

Midweek, Russia announced they would stop exporting natural gas to Poland and Bulgaria since Warsaw has refused to pay for Russian gas in rubles. By shutting off Polish gas, Germany may receive less gas, which will, in turn, reduce supplies to the region in general. ...

Commodities are the raw materials and resources on which modern civilization depends. Unlike stocks, bonds, mutual funds, cryptos, and insurance, commodities are the foundation of our economic system. They create the food, shelter, fabrics, and fuels on which human life depends...

Using multiple measures, food inflation has continued to rise sharply. The war in Ukraine has threatened wheat, corn, and vegetable oil production, dramatically increasing the input costs to grow those crops. Fuel, fertilizer, equipment costs, and availability have assured supply problems will continue for many months, if not years. ...