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Walt Breitinger: Silver slashed; cotton climbs to new highs
Column | Futures File

Walt Breitinger: Silver slashed; cotton climbs to new highs

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Here's a look at futures prices on commodities that impact Southern Illinois and the rest of the Midwest.

Silver slashed after massive surge

Silver prices began the week with the biggest single-day explosion in 10 years, only to tumble midweek as Wall Street and internet speculators on GameStop stock and options created massive swings and attention from regulators. GameStop shares crashed 60% in one day — their largest decline ever — and pulled silver prices along for the ride. As of midday Friday, March silver recovered to $27.05. February gold was trading at $1810, down $30 per ounce compared to last Friday.

Black gold flows uphill

The yellow metal declined most of the week but petroleum-based markets, especially the distillates, heating oil, and diesel, shot up daily and dramatically. Even natural gas, which often trades independently from liquid fuels, rose sharply throughout this past week. Ethanol and soybean oil also saw demand lifted further due to President Joe Biden’s plans to shift our country’s emphasis to renewable fuels. Improvement in global economic prospects contributed to the rise in demand for the energy markets. As of midday Friday, March crude oil traded at $57.00 per barrel.

Cotton climbs to new peak

More than the grains, livestock, or other agricultural markets, cotton blew to new highs on Friday, exceeding the peaks made during the past two years. Prices had been depressed for many months due to demand destruction from COVID-19, but two factors converged to drive prices sharply higher: 1. Cotton production was threatened by several hurricanes bringing heavy rains to our cotton belt during harvest; and 2. China’s economy recovered more quickly than expected, creating strong export demand to our biggest customer. Our own U.S. stock market rally was also supportive to demand. As of midday Friday, cotton for March delivery traded at 83.26 cents per pound. The largest buyer this week was China, followed by Turkey, Pakistan, then Vietnam.

Scientists have finally created a strain of cotton plants resistant to boll weevils. When asked to describe it, they replied, “Its un-boll-weev-ible.”

Walt Breitinger is a commodity future broker in Valparaiso, Indiana, and the opinions here are solely the writer's. 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.

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