Panic Grips Markets, Causing Wild Swings

At one point on Thursday, the Dow Jones Industrial Average was down nearly 1,000 points as widespread panic spread throughout global markets. Commodity futures markets were moving in conjunction with this drop-off and many prices reached new extremes. As stocks lost value, traders sold industrial and economic-linked commodities like crude oil and copper as well as the "commodity currencies", the Australian and Canadian Dollars. Crude oil slid to three-month lows at $74.50, while copper continued its recent decline, crashing to $3.00/lb.

Not all markets sold off, however. As traders rushed out of equities, they sought the "flight-to-quality" markets: gold, U.S. Treasury Bonds, the U.S. Dollar and the Japanese Yen. Gold and the Yen shot up to 6-month highs at $1212/oz and 1.137 cents/Yen respectively, while the U.S. Dollar and Treasury Bonds made 1-year highs.

Friday, as traders took a fresh look at the markets, a portion of Thursday's moves were retraced, but significant changes were left in place. The stock markets were down 6% on the week, crude oil stumbled 13% lower, and copper was crushed for a 7% loss. The Japanese Yen and gold both soared to rise 2.5% on the week.

Over the weekend, traders will be watching the developments in Greece and on Wall Street to find guidance for next week. Most analysts expect that the markets will continue to be volatile, presenting both opportunities and dangers for investors.

Grains

The grain markets finished the week mixed on Friday. Wheat finished up 7 cents the week, corn was unchanged and soybeans closed down 25 cents. Worry surrounding a possible frost this weekend in the Upper Corn Belt provided support to the grain markets, while poor global economic conditions pressured prices downward. Next week, all eyes will be on China, as their presence in the global grain markets is enormous and their response to this week's wild action will likely drive the grain markets.