The Australian move to raise interest rates sparked a surge in commodity prices, led by agricultural futures.Why is this?
The interest rate hike signaled that "all is well" in world economies, at least for the time being. So, if deflation is on the run, inflation can take over and that is happening in spades in the futures markets. Let's look at some prices:
- December wheat is at $4.63 per bushel up 20.2 cents (each penny equals $50.00)
- December corn is $3.64 per bushel, up 23.2 cents
- November soybeans are at $9.07 per bushel up 22.4 cents
- November crude oil is at $71.73 per barrel up $1.32
- December S & P is at 1052.50 up 16.10
- December Dow is at 9673 up 127
- October cattle are at 82.40 down .275
- October hogs are at 49.97 cents per pound up .925
- December gold is at $1044 per ounce up $26.60 (each $1.00 equals $100 dollars)
- December silver is at $17.43 per ounce up 89 cents
Whether today's action is a trigger for further gains is unknown. One thing is for certain. The markets are extremely sensitive to the least little bit of news that can signal that deflation is on the run and that inflation is the new paradigm.
Would you buy commodities at these levels?
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Reader Comments (Page 1 of 1)
10-06-2009 @ 5:12PM
al coholic said...
If I'm trying to decide where the economy is going I don't think commodity futures, which are highly speculative and fluctuate wildly for many reasons are a good measure of anything.