Weekly commodity wrap-up

Cattle Hacked by Russians

This week’s ransomware attack on the world’s largest meat company caused a substantial loss of weight and profitability. Nearby ranchers watched as truckloads of cattle arrived at huge Brazilian-owned JBS meatpacking plants, made U-turns, and had to head back home. A Russian criminal group is believed to be responsible. Higher meat prices are expected as the result of the delay from the cyber attack.

In the meantime, a labor strike in Argentina, the world’s largest exporter of beef, threatened the supply chain further. Dockworkers, with the support of numerous unions, have gone on strike a few times recently in an attempt to get President Lopez Obrador both to recognize the vital role they play in their country’s economy and to highlight how badly they’ve been impacted by the pandemic. Argentina currently ranks third globally in the number of average daily COVID-19 cases.

The price of live cattle for delivery in August traded at $118.37 per hundred pounds as of Friday afternoon.

Oil Demand Returns Along with Higher Prices

OPEC officials met with producers Tuesday and agreed to continue to gradually ease the production curbs put in place in April. Most of the world is driving, even flying again, increasing demand. Government subsidies, and subsequent inflation, are now seen in wages and housing. Wholesale and retail levels have also been stimulated. Memorial Day trips, vacations, and business travel are all resuming, sometimes even exceeding pre-COVID-19 levels.

Crude oil for delivery in July was $69.50 per barrel at noon on Friday, the highest level in two years.

Soy and Silver on Volatile See-Saw

A sharp surge in the U.S. dollar on Thursday tanked virtually all futures contracts in both the agricultural and financial sectors. While some attributed the dollar-buying as a response to growing tensions with China and/or Russia, the consensus was Thursday morning’s robust jobs data (U.S. jobless claims) was the reason. Cocoa, coffee, platinum, and NASDAQ Index futures were markets that got hit particularly hard, but in a see-saw fashion, most markets bounced back on Friday. Dollar weakness returned as an unemployment report featuring 559,000 workers came back on the payroll.

Friday’s recovery in grain and bean prices seemed related to drought fears as popular weather models remained dry for the U.S. plains and upper Midwest. Silver investors were turned back on by inflation concerns, including the rise in wages cited in the unemployment report.

Friday afternoon, silver was worth about $27.85 per ounce, July soybeans traded for $15.91 per bushel, up 56 cents on the week, and June NASDAQ stock index.