Commodity Update -May 18th

Energy prices continue to dominate the news with Oil topping $127 last week. Food prices seem to have stabilized for now, but with continued high demand and high prices for corn I don't expect to see any relief any time soon.



Wheat prices continue to fall, hitting $7.50 this past week. Corn is still trading up around the $6 level while Soybeans may be in a short term up-trend. Rice continues to pull back from the mid-April highs.

Sugar looks like it is heading back down to the .10c area. Cotton may have bottomed near 70 and Coffee is in a short term up-trend.

Oil is hitting new highs in the $127 area, while Natural Gas closed just over the $11 mark. Gasoline and Heating Oil/Diesel are both higher as well.

Gold closed just above $900 after the recent pullback to $850 -not sure if we will see any more pullbacks before it resumes the up-trend. Copper is still holding up just under $4.

Bonds
The 10 yr Note and the 30 yr Bond have been in a trading range with no clear short term direction.

Looks like the Euro did top out around $1.60 (see previous post). The British Pound is still trading around $1.95 while the recent US dollar rise against the Yen may be topping out near the 105 level. The US Dollar Index is still in a small up-trend.

Stocks are still inching higher, now that many of the big companies have reported their earnings. 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:
Cheap oil may be history as $100 becomes norm
Rebuffed by Saudis, Bush calls for domestic oil exploration
Gold futures close near $900 as oil prices surge
Corn stocks expected to fall sharply to 13-year low

Memorial Day travel hit by high fuel costs
Holiday drivers shrug at record gas prices (last year's headline!)
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Commodity Update -April 27th

The commodity markets overall have given up some ground recently, though we still see strength in the Energy complex, and we continue to see higher Rice prices (Costco and Sams Club announced last week that they were limiting customer purchases of bulk rice).

Wheat prices have pulled back significantly from the $13 level in March to around $8.00 last Friday. Corn topped out at $6 in April and is pulling back a little here, though the weather conditions for planting is still an unknown factor. Soybeans is also pulling back from the March high of around $15.50.

Sugar prices are also dropping, and may be basing out in this area (or heading back down to the .10c area). Cotton and Coffee have also dropped from their recent high.

Oil seems to be holding up in the $120 area, while Natural Gas is rising past the $11 mark. Gasoline is higher, and Heating Oil (diesel) seems to be consolidating at the $3.30 level.

Gold still looks like it wants to drop back to the mid $800 area. Copper is holding the high we saw in early March near $4.

Bonds
The 10 yr Note and the 30 yr Bond continue to fall quite a bit (yields rising, inflation worries).

The Euro might have topped out for now around $1.60, while the British Pound appears to be stuck in a trading range just under $2. The US dollar continues to gain against the Yen since the March 16th low. The US Dollar Index also gained some ground this past week.

Stocks are still inching higher, as we continue to see some volatility with earnings reports coming in, and the much awaited Fed decision on interest rates due next 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:
Food Costs Rising Fastest in 17 Years
World's food crisis deepens
Vietnam limits rice exports on food security concerns
Brazil Halts Rice Exports to Ensure Domestic Supply
Brazil Ethanol Consumption Overtakes Gasoline
World Bank tackles food emergency
Wheat prices down 40% from peak
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Commodity Update -April 7th

The commodity markets have turned around since March 23rd and seem to be heading back up again, with strength in the Energy complex, Copper, and Corn; also with help from the weak US Dollar.



Grains
Wheat prices continue to fall and may find support in the $8-$9 area; we are still tight on supplies. Corn continues in a new uptrend (after a pullback in March), based on the lower acreage data from the crop planting report. We could see even higher prices if the weather doesn't co-operate. Soybeans sold off a bit based on that same report, with increased acreage planting reported.

Softs
Sugar seems to be basing out in this area after dropping from its high in early March. Likewise for Cotton and Coffee.

Oil is heading back to the $110 area, while Natural Gas is also heading back up to the previous high we saw in March. Likewise for Gasoline and Heating Oil (diesel) -bad news for the truckers.

Gold looks like it wants to drop to the mid $800 area. We also saw a pullback in Silver. Copper is heading back up to the previous high we saw in early March.

Bonds
The 10 yr Note and the 30 yr Bond are starting to fall (yields rising).

The Euro seems to be heading higher again as the US Dollar falls, while the British Pound appears to be weakening. The Yen also lost some ground. The US Dollar seems to be consolidating here in a trading range.

Stocks have been inching higher, though we continue to see some volatility. 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:
Examining the USDA Crop Report
Corn futures rise on farming forecast
Corn hits $6 a bushel on tight supplies
Soybeans Lock Limit Down on March 31 USDA crop report
How safe are our Canadian banks?
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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.

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.

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.

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

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