Weekly commodity wrap up

Grains drop on supply, better weather

Planting progressed, the U.S. dollar strengthened and China canceled some U.S. corn purchases. All of which continued downward price pressure on corn, wheat and soybeans. Roughly 65% of corn and 49% of beans have already been planted this spring. Russia consented to extend the agreement that allows export of wheat and corn through the Black Sea, a complication of Russia’s invasion of Ukraine. The extension scared away many buyers who had been accumulating grain with the expectation supplies would be trapped at Ukrainian ports.

El Nino could bring hottest Earth ever

Scientists from both the United Nations and the U.S. National Oceanographic and Atmospheric Administration released warnings that the impending El Nino climate pattern, when combined with established global warming, creates a high chance that earth’s temperature will exceed all-time records and create continued threats to every aspect of our environment and economy. NOAA just reported that April ocean temperatures hit the hottest on record at 1.55 degrees above average.

Some agricultural regions might benefit from increased rains associated with the warming of the equatorial Pacific, but that would be a small benefit compared to the costs. El Nino adds high volatility and uncertainties to weather predictions and the prices of crops in Asia, North America and South America.

In the past, El Ninos have increased precipitation in the southern U.S., while creating hotter, dryer conditions on the plains.

Swiss banker predicts gold rally

A prominent Swiss bank executive joined a growing faction of analysts predicting new all-time record highs in gold this year. Most analysts feel our U.S. Federal Reserve Bank is nearly finished raising interest rates. They also believe central banks will continue accumulating gold, and that a U.S. recession will drive investors to gold as a safe haven if the stock market and/or real estate stumbles. Geo-political factors could stimulate a flight to quality as well, should one of the economic or military hot spots flare up this year.

Weekly winners and losers

The U.S. dollar, natural gas, cattle, O.J., coffee, cotton, cocoa, stock indexes, crude and gasoline were higher this week. June cattle closed at $1.66 per pound. June crude traded at $71.60 per barrel toward its close.

Gold and silver were down, while corn, beans, Chicago wheat and Kansas City wheat were sharply lower on the week. July corn closed at $5.54 per bushel, beans settled at $13.07, Chicago wheat at $6.05 and Kansas wheat at $8.24.

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.