Weekly commodity wrap-up

Wheat gets sacked

Moisture soaked some of the driest of the winter wheat-growing regions and reduced speculation in the markets. However, most rain will be too late to help the crop. Cheap Russian wheat is working its way through the pipeline, adding downward pressure to a brutal month for both Chicago and Kansas City wheat.

Corn prices got crushed early in the week as early planting progressed well, and China canceled two huge orders for U.S. corn. Input costs, such as labor, fertilizers, fuel, and pesticides, seem to be steady or declining. Soybeans fell over a dollar per bushel in a week but made a reversal to the upside on Friday. Flooding on the upper Mississippi could threaten delivery of fertilizer while hampering export shipping of grain to the gulf.

Pigs fly on better demand, cattle shortage

Grilling season is nearly upon us, and shoppers note that beef is expensive. Higher prices are because of the long-term drought in the southwest. Pork and chicken provide a cheaper protein source, so hog futures speculators chased hogs sharply higher every day this week.

Diesel steers the drop

Natural gas, crude oil and its products, gasoline, and heating oil all fell this week. A declining demand for diesel fuel is seen as the cause.

Record high temperatures put a dent in the need for home heating oil, as typically happens during the warmer seasons. Concurrently, construction and crop planting hurt the demand for diesel. These factors combined caused a surplus of supplies.

Cheap Russian crude working its way through sanctions and trade barriers added downward pressure. Higher mortgage rates have blunted the call for new housing, weakening demand from that sector. Crude and both products corrected upward on Friday.

Weekly winners and losers

June Hogs were up 5 cents per pound followed by cattle up only a shade. Sugar soared over 2 pennies. All major stock index futures rose with the NASDAQ leading the pack, up 225 points on the week. Losers for the week included corn dropping over 35 cents per bushel, wheat 40 cents, soybean oil about 4 cents per pound. Orange juice compared to last Friday was down slightly, and coffee was down 6 cents per pound. Metals were mostly unchanged.

Opinions are solely the writer’s. Walt Breitinger is a commodity futures broker in Valparaiso, Ind. He can be reached at (800) 411-3888 or www.indianafutures.com. This is not a solicitation of any order to buy or sell any market.