How sweet it is
Sugar prices have been climbing for the past six months and hit highs mid-week. A virus in sugar beets in Europe and a drought in Thailand, a major cane sugar producer, have threatened supply.
Sugar, though less dominant in U.S. diets, serves as a major source of food calories in developing countries such as India. Brazil, the world’s largest producer, also uses a major proportion of their crop to produce ethanol as an alternative to burning petroleum-based fuels.
As of midday today, raw sugar for March delivery traded at about 14 cents per pound.
Cotton sails on storm concerns
Cotton, the other white commodity, also has been rallying sharply for six months and scored highs today on fears that Hurricane Delta could damage plants in southern states. Heavy, prolonged rains could hurt production and delay harvest.
The demand side for cotton has not been too great as COVID has slowed retail buying and relatively cheap petroleum prices make polyester less expensive, creating competition.
Cotton for December delivery traded at 68 cents per pound following a USDA report which lowered estimated total U.S. cotton production to 17 million bales.
Crude oil bounced higher
Petroleum prices swung higher at week’s end on fears that crude production from rigs in the Gulf of Mexico and nearby onshore wells could be shut down by hurricane Delta. Estimates from the Bureau of Safety and Environmental Enforcement ran as high as 91% of Gulf production would be temporarily shuttered.
Demand from China, now the world’s largest importer, continues to increase as the impact from COVID-19 in that nation subsides despite increases here and in Europe.
USDA Report
Corn and soybean prices spiked higher with estimates of harvested acreage for those crops lower than had been expected. Beans for November delivery ran over $10.75 per bushel and December corn approached $4.
Wheat and oats also rose this week. December soft red wheat traded at $6.00 per bushel at noon today.
Walt and Alex Breitinger are commodity futures brokers with Paragon Investments in Silver Lake, Kan.