Gas explodes, corn pops, Euro backslides

Anonymous
Sep 28, 2012

Here is this week’s edition of Futures File, our weekly commodities wrap-up:
 
Gas Explodes Higher
 
Gasoline prices rose to a five-month high this week, gaining more than twenty-five cents per gallon.  Nationwide, gasoline stockpiles are relatively low, nearly fifteen percent smaller than at this time last year.  Ongoing turmoil in the Middle East has continued to keep prices elevated, but this week’s biggest move came on the heels of a refinery explosion. Although gasoline production is not expected to be impacted by the event, news of the possible shutdown caused a wave of buying, pushing prices twelve cents higher on Thursday alone.
 
The price for wholesale gasoline for delivery in October, which excludes taxes and other expenses, was at $3.21 on Friday morning. Longer-term, consumers may see some relief, as wholesale prices for December delivery are nearly 40 cents lower.
 
Corn Pops on USDA Report
 
Corn prices climbed as much as forty cents per bushel in the wake of a USDA report that showed smaller-than-expected stockpiles of corn.  Market participants had been anticipating that the United States had over 1.1 billion bushels of corn in storage before this fall’s harvest began, but the USDA surprised the market with a sharply lower figure of only 985 million bushels. As a result of the smaller corn supply, prices rallied to $7.56 ¼ on Friday morning, the maximum price allowed that day by the Chicago Board of Trade. Next week, follow-through buying may continue, but traders will likely refocus on harvest progress and weather in South America, where farmers are currently planting corn.
 
Euro Slides on Budget Tensions

 
The European currency fell this week as protests in Spain and Greece turned violent.  Both nations are currently trying to implement budget cuts in order to control their current debt crisis.  Public resistance to these plans has investors concerned that Greece and Spain will not be able to control rising debts.  As a result, investors sold European assets, pushing the price of the euro currency lower.  As of midday Friday, the euro was worth $1.286, down 1.4 cents (-1.1%) on the week.

Opinions are solely the writer's. Walt Breitinger is the president of Breitinger & Sons LLC, a commodity futures brokerage firm in Valparaiso, IN.  He can be reached at (800) 411-3888 or www.indianafutures.com. This is not a solicitation of any order to buy or sell any market.

Comments

Contango

The rumor is that China has been secretly buying gold through third parties so as not to influence the world market price.

Well, they ain't buying as many U.S. Treasuries or private U.S. assets as they were, so where are they investing their sovereign wealth?

If by the end of the yr., it is revealed that the Chinese hold 2000-3000 tonnes of gold (closing in on Germany for no. 2 spot), the thinking is that the price will spike.

http://www.businessinsider.com/c...

If gold is too expensive, silver might do.

Using fiat currency in order to paper your way to prosperity tends to end in tears.

wiredmama222

This world wide crisis is what we get when we try to balance the world economy instead of each country caring for its own. I feared this would happen when we started this "taking on the world" attitude and this is what has happened. When is the US going to understand that when we can't even care for our OWN we shouldn't be trying to care for everyone else as well? How much money goes out of this country to help and aide the starving in other countries when there are American's starving right here each and every day? How much money goes to help the war in Syria? The starving in Pakistan, in Africa? How about spending some of that cash in the good old USA and help the homeless and starving right here? This just makes me sick. When will a President stand up and say enough! We are strenghting our borders first, reopening the bases closed by Clinton, and taking care of our own before we venture out of the confines of US soil This includes help to Isreal, Africa and any other country demanding help. Until we help US, we help no one else. That is the person I will vote for.