Weekly commodity wrap-up

Crude Swings as Missiles Hit Poland

Two missiles, initially thought to be launched by Russia, crossed into Poland on Tuesday. Two people were killed. Since Poland is a NATO member and the U.S. and other military allies were obligated and prepared to defend Poland militarily, the origin of the missiles was of extreme concern. Crude spiked higher on this news but, on Wednesday, Polish investigators determined the hit was actually a Ukrainian accident and crude resumed its sharp down trend. Bantering between Ukrainian President Zelenskyy and western nations about who launched the missiles dominated prices a second time, but by week’s end the consensus pushed crude and its products sharply lower.

Biden Meets Xi, Most Markets Pleased

The leaders of the world’s two largest economic powers met face-to-face for the first time in Indonesia last week, discussing climate change and other global issues. The two Presidents agreed there was no conflict regarding policies on Indonesia, a major coal exporter. Taiwan, the war in Ukraine, and how to avoid military conflict between the two powers was amicably discussed. Stock index futures, grains, and food futures seemed pleased with the meeting, but crude fell since reduced military threat typically leads to reduced demand for petroleum products.

Harvest Nears Completion

The weekly USDA crop report indicated corn harvest advanced 6% to 93% complete, while 96% of our beans were in. Both crops were well above last year and the five-year average too. Our U.S. winter wheat crop is almost 50% planted but remains in poor condition due to drought in the Plains. Prices were mixed.

Where’s the Beef and Birds?

The largest decline in beef output since the 1970s and the high cost of this year’s Turkey Day may prop up prices of red meat. Avian flu has affected Turkey production since multiple flocks of birds have had to be culled to insure the infection would not spread. Growers have replaced their flocks quickly, but the result has been more young, smaller turkeys this year and fewer heavy birds at the grocery. Average sixteen pound turkeys will cost about $29.00 this year, with the entire 10-person feast running around $64.00.

Sugar Wins the Race Higher, Oil the Most Sour

Sugar advanced more than other commodities this week, with March futures up .36 cents per pound. Other winners included the U.S. dollar, cattle, and hogs. The biggest losers were crude, down nearly $12.00 per barrel, heating oil, gasoline, wheat, coffee, and cocoa.

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.