Weekly commodity wrap-up

2022 year-end review

The war in Ukraine, coronavirus, droughts, floods, fires and sudden rampant inflation combined to make 2022 one of the wildest commodity and financial futures markets in decades.

Farmers, miners and other producers, processors, end users, shippers, investors and speculators were affected in new ways. Everyone’s understanding of geo-politics, virology, climatology and even the psychology of the Federal Reserve in setting interest rate policy was challenged.

Many, for the first time, were forced to consider the hierarchy of needs, realizing you can’t eat Crypto, build houses on TikTok or drive cars on Twitter. Food, fuel, clothing and shelter emerged to the fore, with commodity futures as a vehicle to provide a foundation on which to base the most basic of life’s investments and allocation of resources.

As the year turns, the war continues, COVID deaths are surging again, our Federal debt is exceeding $31 trillion and greenhouse gas emissions continue to fuel treacherous weather events. Multiple hot spots, along with our delicate relationship with China, stand to threaten world stability as much, or more, than the Russian invasion.

NASA has predicted that El Nino weather patterns could exacerbate the ravages of global warming as drought in multiple agricultural regions, including the U.S. southwest.

Better news on the way?

Some good news and optimism sprout from USDA reports: High prices have boosted the U.S. farm belt income for agricultural commodities including corn, wheat, livestock and milk. Major expansion of solar energy could provide hope that the energy sector could soon see a shift from CO2 emissions and provide a growing low carbon alternative. Expanded use of bio-fuels and development of hydrogen and nuclear fusion in the long term might change the landscape. Such advances could provide limitless clean energy and solve issues currently plaguing our economies and civilizations.

Weekly winners and losers

Platinum, gold, soy meal, wheat and gasoline led the way up this week with soybean oil and natural gas in the slammer. Midday today, January platinum traded at $1,060 per ounce, with February gold going for $1,830. March wheat brought $7.90 per bushel, while February unleaded gasoline went for $2.44 per gallon. March soybean meal was at $470.0 per ton. Soybean oil traded at 63.90 cents per pound. March natural gas went for $4.10 per 10,000 MMBtu.

Opinions are solely the writer’s. Walt Breitinger is a commodity futures broker in Valparaiso, Ind.