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Futures file: Cup of Joe jumps higher | Futures Dossier with Walt Breitinger

Columnist for the Walt Breitinger Times

Your morning dose just got richer.

Dry conditions in Brazil are expected to continue through the end of the year. Analysts blamed the drought on La Nina weather patterns in addition to global warming.

Brazil produces the most popular Arabica type coffee, while Vietnam produces the Robusta crop. Arabica coffee for September delivery rose about 20 cents this week, closing at $2.38 a pound.

The gas rises to the sky

Natural gas hit a 14-year high earlier this week and held near that level as European demand, particularly from Germany, combined with supply threats imposed by Russia, prompted the government to ration and buy in panic.

A huge percentage of homes are set to go without heating this winter, just as large parts of industry and transport could be shut down as Russia cuts the Nord Stream pipeline.

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Natural gas for October delivery fetched $9.40 per 10,000 mmBtu.

Heat hits China

Energy rationing, crop losses and threats to human and animal health have also continued in China.

The demand for natural gas to generate electricity is enormous, just as hydropower from China’s vast dam system is threatened by low or disappearing rivers. Electricity rationing is particularly problematic there since China’s economy is already suffering from ongoing COVID-related shutdowns. Parts of China are experiencing the worst heat wave in 60 years. Keep in mind that China is our biggest customer for many of our agricultural products, so American farmers watch China’s weather forecast as carefully as their own.

Soybeans for November delivery traded at $14.60 a bushel, December corn at $6.64, followed by September wheat at $7.83. Cattle for October delivery were at $1.430, with hogs for October fetching 0.9060 a pound.

December gold traded at $1,740 an ounce, while December silver hit $18.73. Crude oil for October delivery cost $92.90 a barrel. The September S&P was down at 4075, nearly 100 points midday.

Answers to the last quiz: The term “stagflation”, originally used by a British politician in 1970, refers to a situation in which inflation rises while economic growth, including employment, remains weak or even declines. Some modern economists fear that stagflation will soon characterize our economy, characterized by the worst of both worlds.

Opinions are solely those of the author. Walt Breitinger is a commodity futures broker in Valparaiso. He can be reached at 800-411-3888 or www.indianafutures.com. This is not a solicitation of a market order to buy or sell.