Trending
Sparse Safe Shipping Seen
Shipping disruptions in the Strait of Hormuz continue to affect oil and natural gas prices, with the route normally carrying one-fifth of the world's oil supply. Adding to supply problems, the Iran-backed Houthi militia in Yemen is attempting to restrict passage in the Bab al-Mandab Strait in the Southern Red Sea, which Saudi Arabia uses as an alternate to the Hormuz Strait. Crude prices declined more than $ 10 per barrel early in the week but posted the high of the week on Friday.
Red Sea Hostilities Heat Up
US and Iran hostilities have threatened Red Sea shipping, causing disruptions to the global economy. As a result fourteen countries are supporting a maritime coalition to secure the area. The countries including Turkey, Pakistan, Egypt and Sudan, are in the planning stages to secure the area with Saudi Arabia leading the coalition. The volatile Red Sea handles 12 to 15% of global trade and 30% of global container traffic.
Food for Thought
A recent warning from Eurasia Group notes that global food prices such as wheat, corn and rice are expected to rise rapidly. The group estimates a 10% to 18% jump by next summer. Both the threat of the "super El Nino" and ongoing Eastern Europe and Middle East conflicts are seen as causes for the increase. This year, U.S. wheat prices have declined nearly $1 per bushel while corn declined roughly 50 cents.
Gold Direction Fuzzy
Gold traded in a narrow range this week between $4,000 and $ 4,100 per troy ounce. Both geopolitical safe-haven demand and the prospect for a hawkish Federal Reserve being rate-cautious have led to the back-and-forth action. Midday Friday the price was just above $4,000.
CME midday prices - August Soybeans, $11.70; September Corn, $4.39; September Wheat, $6.37. Livestock per 100 pounds: August Cattle, $232; August Hogs, $99. Metals per troy ounce: August Gold, $4,051; September Silver, $58, September Copper per pound: $6.48. September Crude oil per barrel: (WTI) $85. September S&P futures traded at 7515.
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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.