EXCHANGE CORNER

Commodities Face Cross-Currents and Energy Crunch to Raise Farming Costs

Oct 21, 2021

Economic Research

Commodities Face Cross-Currents and Energy Crunch to Hit Ag Sector

By Blu Putnam, Chief Economist
Erik Norland, Senior Economist
CME Group

Commodities Face Various Market Factors

Oil prices top $80 per barrel as demand for power generation steps up.
Gold caught between high inflation and impending end to Fed asset purchases, possible rate hikes.
Copper eyes China’s growth; bumper crops weigh on corn and soybeans.
Many opportunities for portfolio diversification in commodities.

Farm Input Costs to Rise Amid Oil and Gas Surge

Corn, wheat prices show significant co-movement with crude oil.
Fertilizer prices have nearly tripled from recent lows amid surge in natural gas.
Farm input costs are on the rise amid higher oil and gas prices.
Natural gas prices are up 500% in Europe, Asia amid supply shortfalls.

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