April blizzard wreaks havoc
A massive storm brought snow to much of the Great Plains, dropping up to two feet of snow in some places. The storm shut down airports and roads, but the worst damage could come from more flooding in areas still recovering from last months’ floods.
For farmers, the unusually intense April storm is creating additional headaches.
For ranchers, bad weather prevents them from bringing cattle to market, and cold temperatures cause the animals to eat more and gain weight more slowly, hurting farmers’ profitability.
Meanwhile, winter wheat farmers fear damage to the emerging crop that lay dormant since last fall, and farmers hoping to plant corn and soybeans in the coming weeks will see their planting schedules delayed by flooded fields.
Despite these concerns, U.S. agricultural prices were relatively quiet last week, with May corn futures trading Friday near $3.60 and May soybeans at $8.96 per bushel, while April live cattle fetched $1.26 per pound, all near recent lows.
Perhaps more important than weather is the ongoing saga of the trade war with China; a deal continues to be promised, but there has been no resolution thus far.
Gasoline revs to new high
Gasoline prices are racing to a six-month high, hitting drivers at the pump. This year, gasoline futures have risen from $1.35 in early January to $2.04 on Friday, more than a 50% jump.
Gasoline futures prices are cheaper than the pump price since the contracts don’t include taxes, transportation costs, or other expenses, but both typically move in tandem.
Gas is going up as U.S. stockpiles of the fuel dropped precipitously over the last month, falling beneath the five-year average level.
Meanwhile, U.S. ethanol supplies have been severely disrupted by flooding across Iowa and Nebraska, two of the largest ethanol-producing states. Floods over the last months shuttered over 10% of U.S. ethanol production plants and closed railroad lines, causing an explosion in ethanol prices. U.S. retail gasoline is up to 10% ethanol, making the biofuel important to the price at the pump as well.