June 5

6/5 – For the past 3 years it’s been a steady drumbeat of Covid, supply chain disruptions, the Ukraine war, and wild swings in consumer demand. Those things sent commodity prices soaring. More recently, while we’ve all been busy complaining about inflation, commodity markets have come undone. Part of that is high prices curing high prices. But it’s also slumping consumer demand, higher interest rates, and that hint of global recession on the horizon. Just looking at agricultural and energy futures markets over the past year: Coffee futures are down 22.4%; corn -16.2%; wheat (CME) -40.5%; wheat (KC) -27.5%; lean hogs -21.3%; milk -37.2%; soy-oil -39.5%; crude oil -39.6%; and natural gas -74.5%. Of course, there are outliers, in particular cattle futures which are up 32.1% from a year ago and 50.6% above 2 years ago. PS: Keep an eye on that lockstep between soy-oil and crude oil (both -39%).