Fears of rising interest rates and worldwide recessions fueled continued panic selling of stocks, bonds, notes, and virtually every currency. The U.S. dollar was the exception. Many attributed the crash to the greenback since U.S. investments are priced in dollars; as the U.S. dollar goes up, all else goes down. The recent massive declines have erased the past two year’s swings and broken the lows since the COVID-19 recovery. The December S&P traded at 3,675, with the December Dow Jones futures at 29,430. Ten Year notes for December delivery came in at 112.24, with the December Euro currency going for .9740.
Commodities crash as dollar surges
The tumbling stock market was accompanied by a severe liquidation of most commodity groups. The commodities that are typically exported led the way down. Cotton, crude, and lumber were the first to fall, and they fell furiously since they are sent overseas. Fears of recession hit fuels, clothing, and housing more than foods and grains; those are often the first products that people stop purchasing in a recession. Nobody wanted gold or silver this week either. Crude oil for December delivery brought $78.10 per barrel. December cotton went down to 92.54 per pound. November lumber came in at $433.00 per 110,000 board feet. December gold traded at $1,652 per oz.
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Putin putting more troops in Ukraine
Russian President Putin is mobilizing 300,000 additional troops to invade Ukraine. This action, threats to use nuclear strikes, and his announcement to hold elections in areas Russia is occupying is seen by world leaders, especially President Biden, as a desperate attempt to regain authority and leadership of a war Russia’s losing. Russian citizens are protesting, especially youths, and a growing number of Russians are fleeing the country to avoid complicity. The “Ukrainian War Commodities,” such as wheat, vegetable oils, and natural gas were extremely volatile but received more downward pressure than support from the war developments, weather concerns, or inflation fears that often stimulate buying. Wheat for December delivery came in at $8.77 per bushel, while December soybean oil traded at 63.75 per pound, with December corn going for $6.75. November natural gas futures brought $7.00 per 10,000 mmBtu.
Which of the following are considered commodities? Bitcoin, NASDAQ, Rice, Silver, Japanese Yen, Natural Gas, Mercury, Turkeys, Treasury Bonds.
Opinions are solely the writer’s. Walt Breitinger is a commodity futures broker in Valparaiso, Indiana. 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.