Weekly commodity wrap-up

Cup of Joe Jumps Higher

Your morning fix just became richer. Dry conditions in Brazil are expected to continue through the end of the year. Analysts have blamed the drought on La Nina weather conditions in addition to global warming. Brazil produces the most popular Arabica type coffee, whereas Vietnam produces the Robusta crop. Arabica coffee for September delivery perked up by roughly 20 cents this week, closing at $2.38 per pound.

Gas Rises Skyward

Natural gas hit a 14-year-high early in the week and held near that high as European demand, especially from Germany, combined with supply threats imposed from Russia, prompted government rationing and panic buying. A huge percentage of homes are expected to go without heat this winter, just as major portions of industry and transportation may be shuttered as Russia cuts off the Nord Stream Pipeline. Natural gas for October delivery brought $9.40 per 10,000 mmBtu.

Heat Hits China

Energy rationing, crop losses, and threats to human and livestock health have continued in China as well. Demand for natural gas to generate electricity is huge, just as hydro-power from China’s extensive system of dams is threatened from low or disappearing rivers. Power rationing there is especially problematic since China’s economy is already suffering from continued COVID-related shutdowns. Parts of China are experiencing the worst heat wave in 60 years. Keep in mind, China serves as our biggest customer for many of our agricultural products, so U.S. farmers are watching China’s weather forecast as closely as their own.

Soybeans for November delivery traded at $14.60 per bushel with December corn at $6.64, followed by September Wheat going for $7.83. Cattle for October delivery was at $1.430, with hogs for October bringing .9060 per pound.

December gold traded at $1,740 per ounce, while December silver fetched $18.73. Crude oil for October delivery went for $92.90 per barrel. The September S&P was down at 4075, almost down 100 points midday.

Answers to last Quiz :

The term “stagflation,” originally used by a British politician in 1970, refers to a situation in which inflation is increasing while economic growth, including employment, remains low or even decreases. Some modern economists fear stagflation may soon characterize our economy, featuring the worst of both worlds.

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.