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. Crude spiked higher on this news but, on Wednesday, Polish investigators determined the hit was actually a Ukrainian accident and crude resumed its sharp downtrend. Bantering between Ukrainian President Zelenskyy and western nations about who launched the missiles dominated prices a second time, but by week's end the consensus pushed crude and its products sharply lower.
Biden Meets Xi, Most Markets Pleased
The leaders of the world's two largest economic powers met face to face for the first time in Indonesia last week, discussing climate change and other global issues. The two presidents agreed there was no conflict regarding policies on Indonesia, a major coal exporter. Taiwan, the war in Ukraine and how to avoid military conflict between the two powers was amicably discussed. Stock index futures, grains and food futures seemed pleased with the meeting, but crude fell since reduced military threat typically leads to reduced demand for petroleum products.
Harvest Nears Completion
The weekly USDA crop report indicated corn harvest advanced 6 percent to 93 percent complete, while 96 percent of our beans were in. Both crops were well above last year and the five-year average, too. Our U.S. winter wheat crop is almost 50-percent planted but remains in poor condition due to drought in the Plains. Prices were mixed.
Where’s the Beef and Birds?
The largest decline in beef output since the 1970s and the high cost of this year’s Turkey Day may prop up prices of red meat. Avian flu has affected turkey production since multiple flocks of birds have had to be culled to ensure the infection would not spread. Growers have replaced their flocks quickly, but the result has been more young, smaller turkeys this year and fewer heavy birds at the grocery. Average 16-pound turkeys will cost about $29 this year, with the entire 10-person feast running around $64.
Sugar Wins the Race Higher, Oil the Most Sour
Sugar advanced more than other commodities this week, with March futures up 36 cents per pound. Other winners included the U.S. dollar, cattle and hogs. The biggest losers were crude, down nearly $12 per barrel, and heating oil, gasoline, wheat, coffee and cocoa.