Commodity Update -March 23rd

We saw a big drop in commodity prices last week as the US Dollar regained some strength after the Fed lowered interest rates on Tuesday. Some of the price drops were also a reflection of profit taking after the recent big run up in prices (click chart to enlarge).

Grains

Wheat prices fell along with most other commodities. Corn and Soybeans also continued to pull back and are now trading near the mid January lows. We get the crop acreage planting report later this month (31st).

Softs

Sugar has been selling off since the beginning of the month. Likewise for Cotton and Coffee.

Energy

Oil spiked to $110 then pulled back to around $101, while Natural Gas also had a sharp pullback. Heating Oil had a small pullback this past week.

Metals

Gold spiked over $1020 then we saw a huge pullback in just two trading days last week. We also saw a pullback in Silver, Copper, and Aluminum.

Bonds

The 10 yr Note and the 30 yr Bond continue to rise, reflecting a flight to quality from the stock market. Meanwhile the 3 month Treasury yield dropped to almost zero (a 50 year low), also reflecting a flight to quality.

Currencies

The Euro pulled back sharply after the Fed interest rate cut. It previously hit an all time high of almost $1.59 to the US Dollar. The British Pound continued to fall from it's recent high of $2.04, closing the week around $1.98. Starting on March 16th we got the bounce in the Yen (inverse chart) that I predicted in the last post -we'll see how far it goes, and if the stock market follows it up. The US Dollar finally recovered a bit after the Fed rate cut.

Stocks displayed extreme volatility this past week. See my Stock Market Blog for more details.

Note: Charts are 'live' so comments above refer to the appropriate time on the chart.

News Stories:
A Global Need for Grain That Farms Can’t Fill
Soybeans, Corn Fall After Brazil Crop Forecast; Wheat Declines
High Wheat Prices Raise Grocery Costs
Oil Drops on Worries About Weaker Demand
Volatility continues in commodities