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.
Fed Head Surprises Rate Watchers
Jerome Powel, chair of our Federal Reserve Board, delivered the most “dovish” policy statement in a year. He implied that smaller rate hikes lie ahead. causing the stock market to rally. Stock index futures turned down, however, on Thursday, when he stated rates could go higher than previously projected. His key phrase was, “It is very premature to talk about pausing the rate-hike cycle.”
Lula Wins President of World’s Biggest Bean Exporter
Brazilians voted in as president Luiz Inácio Lula da Silva and voted out Jair Bolsonaro, bringing an end to four years of contentious relationships with most western leaders and over half of the Brazil’s population. Bolsonaro fell under criticism for social policies, but also for his sudden and massive deforestation of rainforest to increase production of soybeans, cattle and petroleum. His exit may slow down that effort, pleasing climatologists and environmentalists while increasing market share for U.S. farmers and ranchers. In 2013, Brazil surpassed the U.S. as the world’s top soybean exporter and has held that status ever since.
Answer to Commodity Quiz
The countries which emit the greatest amount of greenhouse gasses are China, the U.S., India, Russia and Japan. The European Union, if taken as a whole, would rank third, with Germany as the lead offender.
Weekly Winners and Losers
Cotton rose a colossal 12 cents per pound, with copper up roughly 25 cents and crude up $4 per barrel. The other metals and “soft” markets including sugar, coffee, cocoa were all higher. Corn, wheat, beans and soybean oil were up. The biggest losers were hogs (down nearly three-and-a-half cents per pound), cattle and lumber.