Weekly commodity wrap-up

Acreage report sparks soybean fireworks

Beans surged on Friday morning after the USDA reports on planted acreage and stockpiles. Both the planted acreage and stocks were below expectations for beans, and corn acreage was above the pre-released guesses. Thunderstorms hit some of the driest areas in the Corn Belt, providing much needed drinks just in time to improve pollination prospects. So, the crop report data added to the price negativity of weather and other supply and demand factors. Most of the Southwest where more wheat is grown continues to be under severe drought. That, coupled with record high temps, has caused low river and reservoir levels.

Feeder cattle leap to record as corn falls

Cheaper feed prices should cause beef cattle production costs to drop and the price of beef to decline, eventually. In the meantime, ranchers are rapidly buying lightweight cattle and putting them in feedlots in order to turn inexpensive corn into valuable steaks and burgers. So the timing of the supply and demand cycle represents one of the many factors farmers, ranchers, processing plants, and speculators need to ponder in their assessment of risks and profits.

Copper collapses on rate fears

While all the actively traded metals declined early in the week, copper—used primarily in the construction and electrical industries—took the biggest bath. More comments from the Federal Reserve about higher interest rates being likely raised fears that demand for all things copper could be tempered in response. A pledge from Chinese officials to aggressively support the Chinese economy could soon ignite buying and turn headwinds into tailwinds. Copper, gold, silver, and platinum bounced upward on Friday, moderating the declines.

O.J. rallies as supplies get squeezed

Citrus greening disease and long-term damage from last year’s hurricanes caused the smallest crop in decades, and accelerated a rally in frozen orange juice that rose to new heights. July O.J. locked the permissible limit up on Thursday.

Winner and losers

Soybeans and cattle were up sharply this week with November beans gaining 25 cents per bushel. August cattle were up over 7 cents per pound with hogs a close second up about 4 cents. December corn tumbled over a dollar per bushel, while wheat lost nearly 90 cents per bushel. Copper lost about 10 cents per pound from last Friday’s close.

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.