Floods and fires devastate beyond words
Floods in northwest Germany and Belgium early last week caused “devastation beyond words,” according to Chancellor Angela Merkle. It was viewed as unmistakable evidence of global warming by scientists and elected officials alike. Hundreds are reported dead and hundreds more are missing. Early estimates of the damage exceed $5 billion U.S. dollars.
As the crisis-level damages in Europe are just beginning to be appraised, China has been blasted with massive flooding as well. The Zhengzhou weather station reported a year’s worth of rain fell in just three days. Over a million people are affected, with hundreds of thousands being evacuated.
Stateside, 13 new fires were reported this week, bringing our national total to 83 large fires. The National Interagency Fire Center reports more than 2,697,108 U.S. acres have burned so far this year. High temperatures and dry weather continue to plague our northwest while low subsoil moisture threatens many of our row crop and wheat-growing regions.
Lumber bounces
Following the most historic rise and crash in the history of lumber trading, lumber staged a recovery this week. While housing prices hit record highs in June, lumber tumbled to its low on July 19, then rose slightly. Some of the recent upswings could be attributed to fires destroying logging forests, but production from mills also is impacted by energy availability and transportation issues as part of their supply chain. Lumber for September delivery traded at $627 per 1,000 board feet midday today.
Cup of joe goes on a buzz
Coffee prices blew through the ceiling this week as Brazil ー like so many agricultural centers ー suffers from a vast drought in the eastern state of Minas Gerais, their main coffee-producing area. Unlike North American wheat and row crops, coffee plants take a couple of years to mature and produce. Weather problems, which can include frost during our summer, can also threaten yields. Coffee exports from Vietnam have also driven prices higher due to a shortage of shipping containers. The price of September Arabica coffee closed at $1.89 per pound today.
Words of wisdom
“In the markets there is nothing wrong with being wrong, but there is enormous wrong with remaining wrong.” – Marty Zweig
Walt Breitinger is a commodity futures broker with Paragon Investments in Silver Lake, Kan.