A surge in the producer price index and Thursday’s hot jobs data prompted the Federal Reserve to warn of further rate hikes, giving the US dollar a boost. The stronger dollar and fears of more aggressive rate hikes shattered the legs of gold and silver Thursday and Friday morning. Equity indices followed the downward direction at the end of the week, with the NASDAQ posting the largest declines. Crude oil, which is often correlated with gold’s direction, also fell sharply on Friday morning.
Cotton is dissolving on recession fears
Higher interest rates and huge credit card debt aren’t a formula for people buying new closets. Disputes with China – our largest cotton buyer – over balloons and high-flying objects also did little to boost this business.
CO2 capture and raw materials
In its simplest form, carbon sequestration is the capture of carbon dioxide (CO2) from our air and storing it in solid or liquid form. This process reduces CO2 in the atmosphere and reduces the most common heat storage gas that causes droughts, fires, storms and floods. Plants absorb carbon naturally through photosynthesis and can store it in the soil. This is a biological form of sequestration. Many farmers have been working on it since the beginning of the agricultural revolution. So we have to thank our farmers for studying and following land use best practices that offset carbon emissions with carbon capture and storage, in addition to growing our food.
However, the dramatic emissions during and after the industrial revolution have added such enormous amounts of CO2 that the greenhouse effect has warmed the earth too quickly and caused serious climate problems.
Geological carbon sequestration is the industrial storage of carbon (usually in liquid form) underground in porous rock or other deposits. This process can offset the CO2 emitted, or the carbon can be used as a component in petroleum production, power generation and recovery.
With trading in crops, lumber and petroleum serving as the basis of commodity trading, monitoring developments in carbon sequestration, both biological and geological, is likely to be the focus of futures markets for the foreseeable future.
Weekly winners and losers
Cocoa and coffee were the winners, with coffee rising to $1.8650 a pound and cattle rising to $1.6475 a pound.
Gold was trading at $1,851 and silver was trading at $21.70 a pound. Cotton, crude oil and timber were among the losers, as was natural gas.
The grain market continues to go nowhere fast and remains in a sideways trading range. Corn closed March at $6.76 a bushel, Wheat at $7.65 in March and Soybeans at $15.26 in March.
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