A Hot Mess for Commodities

Canadian wildfires and smoke continue to affect commodities through Friday. The hot, dry conditions associated with the fires have hindered wheat, canola and barley crops in and around Canada and the US states experiencing smoke coverage. The timber industry faces commodity price uncertainty due to potential lost harvests, and oil field disruptions lead to reduced production and shipping. Supply chain disruptions add to fire woes. Climate change fueled disasters cost the US hundreds of billions annually.

Heat Deletes Abundant Wheat

Continued heat waves in Western Europe and high temps across the US Northern Plains are potentially reducing spring wheat yields. Global supplies have been tightened by the hot, dry conditions and lower planted acreage. The USDA ending stocks estimate was down 722 million bushels reversing the prospect of oversupplies. Russia and Ukraine struck each other’s grain export facilities and ships, reducing wheat exports and pushing wheat prices higher.

Gulf Battle Clubs Oil Up

The ongoing Iran/US conflict continues this week with Iran threatening Gulf regional infrastructure destruction if the US carries out threats on Iranian civilian sites. The US says it conducted a series of attacks on Iran at several locations and disabled an Iranian oil tanker sailing toward a port in the Strait of Hormuz as Iran organized retaliatory attacks in Kuwait, Bahrain and Jordan. Adding to supply concerns, Ukraine’s expanding drone campaign has targeted Russian oil export facilities and tankers in the Black Sea and Sea of Azov, disrupting crude shipments and raising fears of additional global supply constraints. Crude and Brent oil prices have been up more than 10% for the week.

CME midday prices – August Soybeans, $12.02; September Corn, $4.39; September Wheat, $6.76. Livestock per 100 pounds: August Cattle, $225.20; August Hogs, $101.72. Metals per troy ounce: August Gold, $4,020; September Silver, $56.33, September Copper per pound: $6.27. August Crude oil per barrel: (WTI) $82.40. September S&P futures traded at 7535.

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Walt Breitinger is a commodity futures broker in Indiana. He can be reached at 800-411-FUTURES (3888) or www.indianafutures.com.

Pinion Futures, LLC, a CFTC registered Introducing Broker and NFA Member (NFA #0284447,) is a fully owned subsidiary of Pinion Risk Management LLC. Information contained herein is believed to be reliable but cannot be guaranteed as to its accuracy or completeness. Futures and options trading involve substantial risk of loss and is not suitable for all investors.