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Oil Fluctuations Across Nations
As of Friday, Texas Crude Oil was over $101 per barrel, and Brent was trading over $109. Prices rallied due to Middle East tensions, including Strait of Hormuz shipping disruptions, and Houthi strikes near Saudi energy infrastructure. At the same time, though, diesel exports from Russia are on the increase which should help buffer that rally.
Cattle Moo-ves in Dry Conditions
Live cattle futures finished up 2.12 cents Friday closing at 227.25 cents per pound. Feeder Cattle futures gained 3.5 cents moving to 343.60 cents per pound. Packers bid around $226 per 100 pounds in Texas and Kansas on Thursday. Stubborn drought conditions continue to slow US herd building efforts as ranchers focus on trade policy and beef import pressure.
Soybeans Drop to 7 Week Low
Soybean prices fell to a seven-week low this week trading down to $12.54 per bushel. Harvest supply concerns and reactions to recent export news put pressure on prices. Traders are reacting to the National Oilseed Processors Association crush data with expectations of softer processing numbers. Entomologists report that soybean tentiform leaf miner pests have expanded their footprint into additional Midwest counties which could become a bullish factor.
Inflation Vs. Futures
The U.S. Labor Department released data this week indicating a steep acceleration in inflation at both the consumer and wholesale levels. The inflation data reflect last month's (August) change in the cost of goods and services compared to the same data from a year ago and include computer software, airfares, postage car rental, toys, drugs, groceries and myriad other selected items in addition to fuel oil and gasoline which are traded on the futures markets. Gasoline was a major component of the CPI rise. The rise in wholesale inflation was biggest advance since 2022 and way above expectations. Worse yet, none of these data include the energy price explosion of this week.
Commodity futures contracts, instead of describing price changes in the past, attempt to predict prices of the most basic raw materials (not services) which our civilization depends on such as grains, metals, livestock and fuels in bulk quantities, not in gallons at the pump. So, futures are forward looking, not just looking at past month's data. Commodity producers, such as farmers and consumers, forecast future prices by bidding and offering to sell materials at bulk prices for their future needs.
CME midday prices - November Soybeans, $12.61; December Corn, $4.74; December Wheat, $6.60. Livestock per 100 pounds: December Cattle, $228.50; December Hogs, $67. Metals per troy ounce: December Gold, $4,184; December Silver, $57.16, December Copper per pound: $6.56. November Crude oil per barrel: (WTI) $101. September S&P futures traded at 7690.
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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.