Breitinger
The war in Ukraine, the coronavirus, droughts, floods, fires and suddenly rampant inflation made 2022 one of the wildest commodity and financial futures markets in decades.
Farmers, miners and other producers, processors, end users, shippers, investors and speculators were affected in new ways.
Everyone’s understanding of the geopolitics, virology, climatology and even the psychology of the Federal Reserve in setting interest rate policy has been challenged.
For the first time, many have been forced to consider the hierarchy of needs and realize that you can’t eat crypto, build houses on TikTok, or drive cars on Twitter. Food, fuel, clothing and shelter came to the fore, with commodity futures serving as vehicles to create a foundation upon which life’s most basic investments and resource allocations are based.
As the year progresses, war rages on, COVID deaths are rising again, our national debt exceeds $31 trillion, and greenhouse gas emissions continue to fuel treacherous weather events. Several hot spots, along with our thorny relationship with China, could threaten world stability as much or more than the Russian invasion.
NASA has predicted El Nino weather patterns could exacerbate the ravages of global warming as drought hits several agricultural regions, including the US Southwest.
Better news on the way?
Some good news and optimism is emerging from USDA reports: High prices have boosted US farm belt income for soft commodities such as corn, wheat, cattle and milk.
Strong expansion of solar power could offer hope that the energy sector could soon see a shift away from carbon emissions towards an increasingly low-carbon alternative.
The expanded use of biofuels and the development of hydrogen and nuclear fusion in the longer term could change the landscape. Such advances could provide limitless clean energy and solve problems that currently plague our economies and civilizations.
Weekly winners and losers
Platinum, Gold, Soy Meal, Wheat and Gasoline led the week’s slammer with Soybean Oil and Natural Gas.
Midday Friday, January, platinum was trading at $1,060 an ounce while February gold was trading at $1,830. Wheat fetched $7.90 a bushel in March, while unleaded gasoline was $2.44 a gallon in February.
March soybean meal cost $470.0 per ton.
Soybean oil was trading at 63.90 cents a pound. March natural gas cost $4.10 per 10,000 MMBtu.
Walt Breitinger is a commodity futures broker based in Valparaiso, Indiana. He can be reached at (800) 411-3888 or www.indianafutures.com. This is not a solicitation to buy or sell any market.
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