Putin threatens, wheat rockets

Hopes for exports of wheat and other grains from Ukraine were greatly reduced this week; Russian President Vladimir Putin warned the U.S. and Europe he would curtail the export of grains from Ukraine if a price cap plan for Russian crude goes into effect. Putin complained that the grain exports thus far have gone mostly to Europe and left out poor countries that are desperate for food. Wheat blasted to new highs with corn nearby, but soybeans, which are not grown in that region, saw little impact.

December Chicago wheat closed at $8.63 per bushel, up about 50 cents from last Friday. Corn for December delivery traded at $6.80. November beans brought in $14.08.

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Sinking dollar lifts all ships

An abrupt midweek reversal to the downside in the U.S. dollar helped rally all commodity groups with metals, grains, energies, cotton, and livestock, all receiving a boost. Since everything we trade is priced in U.S. currency, that decline, in effect, makes commodities cheaper to buy in exchange for the greenback.

The U.S. Dollar index traded at $108.90 in the September contract. December gold brought in $1,726 per ounce, with December silver going for $18.65. Crude oil for October delivery was at $87 per barrel midday.

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Futures watching the flus

COVID, bird flu, and Monkeypox remain on the back burner with potential for a massive effect on the U.S. and the world’s economy at any moment. The Chinese government imposed a complete shutdown of mega-city Chengdu last week. Fears of further outbreaks loom as epidemiologists assess the likelihood of further infections. U.S. Thanksgiving turkey prices are expected to be several times last year’s prices, as flocks of all poultry are being culled or threatened by the avian flu. Reports that bird flu may be in for a fall resurgence could impact all protein prices; lower cost meats may be impacted first. Hogs for October delivery weighed in at $.9320, with October cattle going for $1.4560 per pound.

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Answers to commodity quiz

The world’s largest exporters of copper ore are Chile, Peru, and the Democratic Republic of Congo. Copper futures, used predominantly by the construction industry, first traded at the U.S. Comex exchange in 1988.