Crude moves with Russian troops

President Biden threatened severe economic sanctions and transfer of U.S. weapons to Kyiv if Russia moves troops across the Ukrainian border. Although all markets could be impacted by any military confrontation, crude spiked to new highs and seemed especially sensitive as negotiations and diplomacy were weighed by politicians and investors alike. Other NATO members, especially Germany–terminal of the natural gas Nord Stream pipeline–were also watched closely since each plays a role in determining the region’s reactions should Putin decide to invade. March crude oil hit a seven year high of $87.10 per barrel on Thursday, then backed off midday Friday to $85.15 per barrel, up about $4.00 on the week. March gasoline was worth $2.44 midday Friday.

Soy soars on

South American supply threats

Continued concerns about South American weather, farmers’ reluctance to sell beans, and continued good U.S. exports (China importing our beans), converged to pull bean prices higher most of the week. Soybean oil was also tugged upward by rising crude and diesel due to its growing popularity as a renewable fuel when mixed with diesel. To some extent, beans have become yet another inflationary hedge. More economists and analysts are jumping on the bandwagon and predicting anything tangible (commodities, natural resources, precious metals, housing) will out-perform “paper” investments such as stocks, bonds, currencies, and cryptocurrencies. When asked, “What’s the best thing to do with your U.S. dollar?” the answer is “buy anything.” Soybeans for March delivery brought $14.18 bushel on Friday up about 40 cents on the week. March corn traded at $6.17 per bushel while March Chicago wheat rose to $7.86.

Inflation fears

ignite metals

Silver sliced through former high marks as trade volume picked up along with the hype that inflation could accelerate. Inflation records in Great Britain, Japan, and Canada were also broken as evidence of worldwide monetary stimulation or accommodation. March silver jumped about $1.35 per ounce this week trading at $24.34 while April platinum jumped $80.00 per oz to $1,040. Gold’s increase was much more subdued at $1,832.

Words of wisdom

“The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both a permanent ruin. But both are the refuge of political and economic opportunists.”

– Ernest Hemmingway