Weekly commodity wrap-up

China breaks records for buying U.S. commodities

Early in the week, huge sales of corn and beans were announced to China. The largest grain sale ever was reported early today, including more than two million tons of corn and 200 million gallons of ethanol, breaking all records. The week’s total corn sale of more than 6.2 million tons also exceeded all records. Corn for March delivery traded at $5.47 per bushel as of noon Friday, up 45 cents compared to last week.

Silver surges on safe-haven buying

Fears of spreading COVID variants, stock exchange turmoil, concerns about government debt and China’s aggressive actions against Taiwan contributed to a run on metals. Investors typically shift funds into gold during times of uncertainty in other markets such as stocks, bonds, and commercial real estate. This week’s bizarre stories regarding trading in GameStop shares and calls for congressional hearings regarding the “Reddit Rally” were enough to trigger a stampede. Ironically, silver has a history of massive swings and manipulation, and it could fall prey to investigation if volatility blows up.

Silver, seen as undervalued by many, was the beneficiary as traders bailed out of paper investments seeking both refuge and profit potential as silver’s use in growing industrial sectors gain traction. Copper rallied, as well, on such news as General Motors’ plan to electrify all autos by the year 2035. Silver conducts electricity better than any other element, whereas copper is the number one in use since it is cheaper than silver. March silver traded at $27.25 per ounce at noon today.

President not biding time with executive orders

Breaking all records for signing executive orders, President

Biden signed multiple orders, most of which impact the supply and demand formula for our energy or agriculture markets. His plan to halt all new drilling for oil and gas on federal lands was among them. Crude oil for March delivery traded at $52.25 per barrel at noon today.

Raise high the roofbeams, carpenters

Lumber prices, already reaching the sky, blasted into the stratosphere this week, approaching $900 per thousand board feet. COVID demand for new houses and flight to suburbs for new construction and suburbanites’ repairing, refurbishing and refurnishing, adding decks and home offices, all requiring wood studs, plywood and trim boards. Super low and sustained low-interest rates contributed to the demand for lumber also. As of noon today, March lumber traded at $883 per thousand board feet.

Opinions are solely the writer’s. Walt Breitinger is a commodity futures broker with Paragon Investments in Silver Lake, Kan.

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