Oil prices gapped down as the week’s trading began, reacting to relief that Israeli missile strikes on Iran avoided oil production facilities in favor of military sites. Reports that Iran will retaliate against that attack with yet another missile strike on Israel turned prices to the up-side as analysts and end-users reversed their positions. A draw-down in energy stockpiles along with continued reports that the U.S. will increase its strategic petroleum reserve added fuel to the rally.
By midday Friday, December crude oil prices had completely recovered from the decline and returned to last Friday’s price range. Crude oil prices provide the basis for all liquid fuel prices and can impact inflation at the wholesale and retail level.
Mexico’s corn orders amazing
The U.S. exported a substantial 24 million metric tons of corn to Mexico last week, helping our farmers sell the largest crop on hand and easing fears of needing to store the remaining U.S. crop on the ground. Mexico is the largest buyer of U.S. corn and hogs and the second largest buyer of U.S. soybeans, only behind China. Mexico’s proximity, reliability, large population and ability to process our commodities distinguishes them from our other trade partners. The U.S. purchases machinery, transport equipment, steel and manufactured items from our southern neighbor.
Rain in Spain while U.S. bakes dry
Flooding in eastern parts of Spain last week dropped nearly a year’s worth of rain in eight hours, killing at least 150 people. Scientists blame the floods on a warmer atmosphere that can hold more moisture along with slower moving jet streams.
Meanwhile, the U.S. Drought Monitor maps indicate that the vast majority of the U.S., including Alaska, currently suffers from drought or dryer than expected conditions — one of the driest Octobers on record. Ranchers, especially, are extremely dry. Southern California, the Four Corners region and Florida seem to be the only major exceptions. Even some hurricane-affected areas appear to be drying quickly. The upcoming forecast shows some possible signs of relief; however, climate change has left its mark across the globe again this fall.
Friday’s markets
CME midday prices: Gold for December delivery, $2,747 per troy ounce; silver, $32.64 per ounce; copper, $4.35 per pound. December crude oil is at $69.70 per barrel. November soybeans are at $9.81 per bushel, December corn at $4.14 with December wheat at $5.67. December cattle, $185.75 per 100 pounds and December hogs, $84.60.