Weekly commodity wrap-up

Livestock Climbs on Lighter Weights

The using up of heavy-weight animals has finally helped lift cattle prices, with June cattle jumping to a four-week high. Scorching, dry weather moving into the Southern plains threatened livestock and helped boost prices. Slaughter capacity at packing plants has finally returned to normal after nearly two years of Covid-related restrictions, which has restored demand for livestock while increasing meat supplies at the grocery store.

Gasoline prices and restaurant visits play a role, as do concerns about non-meat items replacing beef. In addition, the bird flu outbreak has created a demand for poultry and egg alternatives, forcing many shoppers to the meat counter. Finally, China’s emergence as an importer of U.S. beef has been a positive factor. Meat prices typically rise in the spring as BBQ season begins and suburbanites get out their grills. June cattle traded at $1.392 per pound, up over 3 cents, whereas June hogs were worth $1.186 as of Friday’s close.

Silver Sinks as Rates Rise

Silver investors threw in the towel and liquidated hoards of the blue metal as the rise of interest rates and hints from our Federal Reserve of more to come. Higher rates not only make owning precious metals more expensive—since some speculators borrow to buy it—but provide incentives toward investment and bonds in interest-bearing accounts. Gold fared better than silver as the uncertainty created by the war drove some to seek the yellow metal as a haven.

Gold for June delivery traded at $1,933 per ounce as of midday Friday, whereas May silver brought $24.22 per ounce, down $1.60 on the week.

Grains Hit the Brakes

Planting time approaches. Many farmers are waiting for dryer weather to allow them back onto their fields, while others, especially in the Southwest, desperately need moisture. The lack of any new demand or supply shocks has set the grains and soy complex prices back a bit.

The one bullish exception was May soybean oil which shot up over four cents per pound this week, closing at .8330. May wheat closed at $10.66, May corn at $7.86 per bushel, and May beans at $17.24.

Opinions are solely the writer’s. Walt Breitinger is a commodity futures broker in Valparaiso, Ind. He can be reached at (800) 411-3888 or www.indianafutures.com. This is not a solicitation of any order to buy or sell any market.