READ CAREFULLY ..TRADE CAREFULLY Commodities: The CRB Index, a widely followed gauge of commodity prices per se rallied from a one year low in early January but closed at a one year high at the end of February. Again, such an abrupt reversal is exceptionally rare. Looking closely at the various markets comprising the CRB and what you see is intense volatility. Or, as some describe it: white knuckle trading. Here are just a few examples of what was witnessed in February. Just a few. Coffee futures, due to abnormally dry weather in Brazil posted the largest monthly gain in 19 years. Natural gas prices did well in early February but at the end of the month, experienced the worst weekly decline in 18 years. Livestock futures rose sharply posting new all historic highs. Copper prices, a leading indicator for stocks, metals and commodities in general ended February, at a 2 month low. The Chinese yuan, experienced its worst ever weekly loss. Silver prices rose more than $3 an ounce during the month, the biggest rally in 45 years. August lean hog futures rallied a record setting $18 in February. February live cattle futures from the low to the high, rallied $14. Nearby oat futures rallied $1.20 a bushel and front month soybeans jumped $1.70 a bushel from low to high in February. Quite the month. This has been one of the harshest winters in our lifetime with February, the most brutal month of all. Chicago, Indianapolis and Philadelphia endured the third most extreme weather pattern in more than 60 years. New York, Milwaukee and Deluth saw their fourth harshest February. In California, the worst drought in 165 years is having a devastating impact on agriculture. In Los Angeles, no measurable rain fell during January for only the fifth time since 1878. A professor at the University of California, Berkeley, says, the state is on track for the worst drought in 500 years. From Market Watch dated February 22. “In a move that will likely signal higher food prices nationally, a federal agency says California’s drought-stricken Central Valley — hundreds of thousands of acres of the most productive farmland in the U.S. — won’t get any irrigation water this summer.” Market Watch stated further, “The announcement is significant because California is the largest U.S. agriculture producer. According to the U.S. Department of Agriculture’s most recent California Agricultural Statistics for the 2012 crop year, the state remains the leading state in cash farm receipts, with more than 350 commodities representing $44.7 billion, or 11% of the U.S. total, in 2012. Over a third of the U.S.’s vegetables and almost two-thirds of its fruits and nuts were produced in California, the USDAs, National Agricultural Statistics Service said in a report. Adding to bearishness, bullishness, confusion, uncertainty and white knuckle trading moving forward, the Russian Parliament in the final day of February, granted President Putin permission to use the countrys military in the Ukraine, a major exporter of wheat and corn. What now lies ahead is intense volatility and capricious price swings for the Big Four, stocks, bonds, currencies and commodities. February, 2014 was one for the record books.
Posted on: Fri, 07 Mar 2014 05:46:04 +0000
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