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Futures File


Natural Gas Ballooning Wildly

In the past two weeks, natural gas prices moved higher by nearly $1.30 per million British thermal units, the wildest move since 2009. The market rallied to a four-year high as blisteringly cold temperatures caused Americans to turn up the heat and use record volumes of the fuel over the past few weeks.

After exploding up to $5.48 on Wednesday, prices collapsed on weather forecasts for warmer weather in the coming weeks, trading midday Friday near $4.80.

Copper Market Brittle

Copper prices melted lower again this week, dropping to the lowest price since early December. Prices for the metal have been weakening amid weak manufacturing figures from China, the world’s largest consumer of the red metal. Short-term demand from China is expected to drop off even more during the next week as that nation celebrates their Lunar New Year, the “Year of the Horse.”

The copper market is also under pressure due to US Federal Reserve policy; in a statement this week, the Fed announced it was going to continue reducing its stimulus measures. Although the Fed’s actions imply that they believe the US economy is healthy enough to be weaned off of stimulus, copper traders viewed the action as a negative for prices, as less stimulus could slow economic growth and demand for the manufacturing, auto, and housing sectors.

As of midday Friday, copper was trading near $3.20 per pound.

Wheat Withers

Wheat prices fell hard this week, reaching a three-year low on Friday morning. Prices dropped as analysts continue to digest last year’s record-breaking global wheat crop, which the USDA currently projects to be over 710 million metric tons. Wheat is grown around the world, and last year saw strong production from the US, Russia, Ukraine, India, Australia, and the European Union.

Domestically, most of the US winter wheat crop is currently buried under an insulating layer of snow, but there are some areas where the crop is exposed to subzero temperatures, which could cause crop loss. Winter wheat is usually planted in late fall and harvested in the early summer, allowing some farmers to plant a summer crop, like soybeans, in the same field. As of midday Friday, March wheat for delivery in Chicago was worth $5.56 per bushel.


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