Dollar smashes commodities
An explosive rise in the U.S. dollar Wednesday night drove gold, silver, then virtually all commodity prices into a tailspin. Corn, wheat, soybeans, cotton, crude oil and anything else grown, produced and exported from the U.S. declined in price since dollar-denominated prices go down as the dollar goes up. Gold tumbled from a high of $2,974 last week to a low of $2,844 on Friday with grain prices falling nearly as much.
A concurrent sharp decline in stock index futures was attributed, at least in part, to President Trump’s reiterating that 25% tariffs on Canadian and Mexican imported products would be imposed this coming Tuesday while tariffs on Chinese imports would increase an additional 10%.
A simultaneous decline or rise in stocks and commodities is not typical but dollar strength seemed to be a common factor in their joint weakness this week. Weather, supply chain threats and myriad geopolitical events can easily trump exchange rates so commodity producers and traders must remain vigilant.
Sow what? How about some oats!
Oats have been around since 12,000 B.C. First considered a weed, the grain was found to grow better by Scandinavian and Polish farmers in their colder and damper climates, and by 1500 B.C., farmers were intentionally growing their oats.
Today, 22 million metric tons are produced annually, 31% in the EU, 17% in Russia and 14% in Canada. Up to 74% of the world harvest is used for animal feed and 95% of U.S. crops feed cattle.
As a source of human food, oats help regulate blood sugar and cholesterol, act as an anti-inflammatory and heal dry, itchy skin.
Corn and oats are closely tied together since both can be used as cattle feed. Oat crops are less affected by weather since they are grown throughout the world and less likely to suffer localized weather events. Recent studies at U.S. universities show that oat crops added to planting rotations provide major benefits to soil preservation.
Rollins gets rolling on ag issues
New Agriculture Secretary Brooke Rollins’ first few weeks in office have filled the news with a whirlwind of activity.
This week she announced a five-point plan to deal with the bird flu, which has eliminated millions of birds and sent egg prices skyrocketing. The plan includes $500 million for biosecurity updates that audit risks for the disease on farms. Another $400 million of relief would be available to farmers whose flocks have been decimated. Increased egg imports would help replenish supplies, and some regulations to farmers would be lifted. Finally, vaccines against the flu would be considered. She noted that vaccine benefits are still being researched for effectiveness and that her plan will take time to see results.
While visiting several states, Rollins voiced support for DOGE efforts, noting that she would look to streamline, recalibrate and modernize the USDA, which has 106,000 employees. She also supports the current administration’s tariff and immigration policies which have the potential to place stresses on farmers.
Speaking in Kansas, Rollins announced that $20,000 for farm relief from the Biden administration Inflation Reduction Act has been released to pay farmers who are on the hook for spending the authorized funds. The amount released represents approximately 1% of the dollars authorized by the act.
CME midday prices: Price per bushel: July Soybeans, $10.41; July Corn, $4.77; July Wheat, $5.72. April Livestock per 100 pounds: Cattle, $194.30; Hogs, $88.30. Metals per troy ounce: April Gold, $2,957; May Silver, $31.58. May Copper per pound: $4.53. April Crude oil per barrel: $71.05.
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