Prices Sink as Crops Get a Drink
Rain fell on some of the driest regions of the Corn and Soybean belts this week, which pushed our plants higher but prices lower. Virtually all corn, bean, and bean meal prices dropped sharply, possibly providing a little relief for livestock and poultry producers. The rain was especially welcome in southern Iowa, eastern Nebraska, and Illinois. The Supreme Court ruled in favor of small oil refiners in a biofuel waiver dispute, triggering a massive soybean oil crash.
Oats and hard red spring wheat grown in the plains states jumped higher. Temps were red hot on the plains—exceeding 100 degrees—and the heat continued to threaten wheat grown primarily for rolls, bagels, and pizza crust. Hot, dry weather is expected to continue.
As of midday Friday, corn for December delivery was at $5.23, down 12 cents per bushel, while November beans traded at $12.73, down 19 cents. Chicago July wheat fell $6.39, and July Kansas City wheat dropped to $6.02 on the week. Soybean oil for July delivery hit limit down at 59.20 cents on Friday morning.
Is Inflation just Temporary?
On Tuesday, Fed Reserve Chair Powell said it’s unlikely inflation will rise to 1970 levels while also admitting a high level of uncertainty. Powell said wages and the price of used cars and computer chips are limiting the re-opening of the economy. He also indicated the Fed is ready to keep inflation at 2% by raising interest rates if necessary. The National Association of Realtors announced home prices jumped the fastest in 20 years, 24% above one year ago.
Precious metals, trapped by indecision, found price stability as they awaited signs inflation or deflation arguments would dominate sentiment and trigger a break-out to much higher or lower levels. Gold for August delivery was caught around $1775 per ounce, while September silver was wedged around 26.00 all week. Lumber got hammered at a record rate of $779.00, losing almost $1,000 per 1,000 board feet from its high of $1,700.
Nat Gas, Petroleum Gain Energy
Both “gas” markets ran up sharply throughout the week as demand continued to improve. Six states may have had gasoline shortages. Natural gas demand rose as people used the power to run their air conditioning.
Opinions are solely the writer’s. Walt Breitinger is a commodity futures broker with Paragon Investments in Silver Lake, KS. He can be reached at (800) 411-3888 or www.paragoninvestments.com. This is not a solicitation of any order to buy or sell any market.