Where Are Commodities Prices Headed?

Individuals investing in commodities haven't had a smooth ride over the past few years.

U.S. crude-oil futures briefly turned negative during the height of the pandemic in 2020 before rebounding to more than $82 a barrel recently. World food prices reached their highest level on record last year, in part as the Russia-Ukraine war spooked markets, but have fallen back more recently. And commodities from lumber to copper rode high and then fell, as global inflationary pressures and recession concerns drove trading.

So what happens next...

Supply Concerns Maintain Pressure on CME Lean Hog Futures

Lean hog futures on the Chicago Mercantile Exchange (CME) extended Friday’s steep declines on Monday, pressured by concerns about larger-than-anticipated supplies outlined in USDA’s quarterly data.

The government's latest hogs and pigs report, released Thursday, indicated the number of swine on U.S. farms as of September 1 at 74.319 million head, 0.3% above a year ago. This outpaced expectations for a 0.7% decline in the nation's herd, based on Urner Barry's survey of analysts. 

Prior to the report, the December contract advanced to $76.10 per cwt, a one-week high...

Live Cattle and Feeder Futures Extend Their Midweek Gains, Hit New Highs

The cattle complex extended its midweek gains on the Chicago Mercantile Exchange Thursday, sending feeder futures to fresh contract highs. 

October live cattle surged to a seven-week ceiling and finished 95 cents higher at $183.65 per cwt. October feeders were up $2.40 to $258.875 per cwt, beating out the previous contract high made early last week...

Corn futures were trading flat to fractionally higher at the closing bell for livestock futures and likely had minimal impact on the feeders' futures action...

Livestock Futures Swept Up in Broad Losses Following Fitch Downgrade

Earlier this week, Fitch Ratings downgraded the United States’ Long-Term Foreign-Currency Issuer Default Rating (IDR) to AA+ from AAA. This was the first time the U.S. received a downgrade from one of the three main rating agencies since 2011.

Fitch cited several drivers behind its decision, including “a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025.” The full report can be found here... 

Stock Futures Inch Higher as Talks on Nation's Debt Ceiling Continue

U.S. stocks are posting modest gains in early trading action Friday as talks on the nation's debt ceiling continue. The Dow Jone Industrial Average was last 0.2% higher while the S&P 500 was also up by 0.2%. The Nasdaq-100 was 0.05% higher as of this writing.  

Through Thursday’s close, the Dow has gained 0.7% while the S&P 500 has added 1.5%. The Nasdaq-100 has advanced by 3.3% on the week so far on optimism that the U.S. could avoid defaulting on its debt ceiling.

“An actual breach of the U.S. debt ceiling would likely cause severe damage to the U.S. economy,” said the Council of Economic Advisors (CEA) in a blog released earlier this month...