Beef Market Sizzling

Cattle prices charged to a two-month high this week, nearly reaching $1.59 per pound on Thursday. Prices are climbing as demand from meatpackers picks up going into the summer grilling season. The US cattle herd is still recovering from a multiyear cutback amidst drought and high feed costs, restricting supplies of beef to the market, which has encouraged cattle buyers in recent weeks.

Monday should be exciting as well, as the USDA is releasing its monthly Cattle on Feed Report right after the close on Friday, meaning that traders will have a thrilling weekend ahead until they can trade again on Monday morning.

Sugar Melts under Pressure

Sugar prices collapsed near a six-year low this week, falling to a mere 12.4 cents per pound on Friday. The market has been softening for months on concerns that Brazil's sugarcane crop would overwhelm markets, and recent rains are confirming those fears. Brazil is the world's largest sugar producer and exporter.

Prices for the sweetener are now down by nearly two-thirds from a high of 36 cents in 2011, when a failed Brazilian crop and rising Asian demand sent prices to a 30-year high. Since then, farmers from Australia to Zimbabwe have been expanding production of sugar beets and sugarcane, driving prices sharply lower.

For consumers, especially those in poorer countries who spend a larger portion of their income on food, the price break has been a relief, but low prices may not last if cash-strapped farmers cut back on production.

Greenback Suffers from Fed Patience

In one of the most turbulent rides in decades, the value of the US dollar crashed mid-week when our Federal Reserve Board announced a more dovish, cautious attitude toward raising interest rates any time soon. Investors anticipated more verbiage hinting toward raising rates (currently near zero) in June but those fears were tempered as the Fed Chair Janet Yellen expressed concern for low inflation and a drag on exports associated with dollar strength.

As the Fed's announcement came out, the dollar began a massive roller coaster ride first up then later down as analysts digested each word. The stock and bond futures rallied sharply, with the NASDQ index futures making a 15-year high, gold and silver shooting to the highest level in weeks, and foreign currency futures blasting upward as dollars were dumped.

Longer term, many analysts expect that the US dollar will resume its upward trend as the US is likely to be one of the few countries raising interest rates anytime soon.