The Journal Gazette
 
 
Friday, January 29, 2021 2:17 pm

Column: China breaks records for buying US commodities

WALT BREITINGER| Breitinger & Sons LLC

Early in the week, huge sales of corn and soybeans were announced to China. The largest grain sale ever was reported early Friday, including more than 2 million tons of corn and 200 million gallons of ethanol, breaking all records.

The week’s total corn sale of more than 6.2 million tons also exceeded all records. Corn for March delivery traded at $5.47 per bushel as of noon Friday, up 45 cents from last week.

Silver surges on safe-haven buying

Fears of spreading COVID variants, stock exchange turmoil, concerns about government debt and China’s aggressive actions against Taiwan contributed to a run on metals. Investors typically shift funds into gold during times of uncertainty in other markets such as stocks, bonds and commercial real estate.

This week’s bizarre stories regarding trading in GameStop shares and calls for congressional hearings regarding the “Reddit Rally” were enough to trigger a stampede. Ironically, silver has a history of massive swings and manipulation, and it could fall prey to investigation if volatility blows up.

Silver, seen as undervalued by many, was the beneficiary as traders bailed out of paper investments seeking both refuge and profit potential as silver’s use in growing industrial sectors gain traction.

Copper rallied as well, on such news as General Motors’ plan to electrify all autos by the year 2035. Silver conducts electricity better than any other element, whereas copper is the number one in use because it is cheaper than silver. March silver traded at $27.25 per ounce at noon Friday.

President not biding time with executive orders

President Biden signed multiple executive orders, many of which affect the supply and demand formula for our energy or agriculture markets. His plan to halt all new drilling for oil and gas on federal lands was among them. Crude oil for March delivery traded at $52.25 per barrel at noon Friday.

Raise high the roof beams

Lumber prices, already reaching the sky, blasted into the stratosphere this week, approaching $900 per thousand board feet.

COVID demand for new houses and the flight to the suburbs for new construction contributed. So did suburbanites’ repairing, refurbishing and refurnishing, adding decks and home offices, all requiring wood studs, plywood and trim boards.

Super-low and sustained low-interest rates contributed to the demand for lumber also. As of noon Friday, March lumber traded at $883 per thousand board feet.

Walt Breitinger is a commodity futures broker in Valparaiso. He can be reached at (800) 411-3888 or www.paragoninvestments.com. This is not a solicitation of any order to buy or sell any market.


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