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Energy in the Election
The Blue Wave was surely strengthened by higher gasoline prices, higher diesel prices for farmers, most industrial and construction uses and higher natural gas for home heating. The Dem's surprise win for governor of Texas could spell challenges for oil and gas interests. The first 24 hours following the election saw Texas crude fall $8 per bbl. and gasoline decline 20 cents per gallon. By midday Friday, both crude and gasoline bounced back up slightly on comments by Iran's Ayatollah that the US would remain hostile towards Iran no matter which party was in power. Iran said three more tankers were damaged in the Strait of Hormuz on Thursday. So high prices helped the Dems get elected but the path toward lower prices may be fraught with detours and potholes.
Soybeans Slide as Votes Pour In
The Blue Wave from Tuesday's midterm elections that saw Democrats gain control of both the US House and Senate contributed to lower prices in the soybean complex. The market's fear that a lame duck Pres. Trump for the next two years may lead China to not adhere to previous trade agreements on US bean purchases. Speculators liquidated soybeans, soy oil and meal on Wednesday. Warmer/dryer outlook across the nation's midsection into mid-month should allow harvest to be near-complete by next week so other bearish factors pushed all grains down while December bean oil plunged to a 7-month low on fears a Democratically controlled Congress will not to be as supportive of green bio-diesel. Bio-diesel is produced from a combination of diesel and soybean oil. Corn and wheat fell also closing at lowest levels in months.
Where'd the Dollars Go?
After the recent midterm elections which saw a Democratic sweep of Congress, upward shifts in precious metals held most of their gains. Gold was up roughly $200 per ounce while silver was up too. Meanwhile, seasonal holiday spending is up; however, Americans are spending almost half of their daily household budget on food and shelter.
What Will Be the Rubio Road?
Many news sources circulated rumors Marco Rubio is considering leaving the Trump administration by stepping down from his position as Secretary of State and national security advisor. Speculation suggests that remaining closely tied to the President could hurt Rubio’s prospects for a presidential run in 2028. Both the White House and the State Department have strongly denied the rumors. Vice President Vance, Texas Senator Cruz were noted to be releasing statement questioning the administration's policies while the White House Chief of Staff was replaced on Friday. The impact on commodities has yet to be seen.
CME midday prices January Soybeans, $11.92; December Corn, $4.41; December Wheat, $5.93. Livestock per 100 pounds: December Cattle, $214.20; December Hogs, $53.40. Metals per troy ounce: December Gold, $4,083; December Silver, $52.10, December Copper per pound: $6.27. December Crude oil per barrel: (WTI) $90.60. September S&P futures traded at 7433.
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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.