After a rough couple of weeks, markets have finally pushed their way back on track with their fourth straight winning day, as the S&P 500 jumped over 1% on strong Chicago PMI numbers and declining unemployment claims to end the quarter. Though investors are experiencing déjà vu with yet another Greek austerity package, we can only sit back and hope that it turns out better this time around and that the highly indebted country is able to get its act together with this latest round of measures. The U.S. dollar saw a dip of approximately 0.37% on the day, giving numerous commodities a healthy boost, though arguably the most popular commodity, gold, dipped just below the $1,500 per ounce mark to close out the first half of 2011 thanks to declining levels of risk aversion [see also Don’t Fight The Curve: Five Commodity ETFs in Backwardation].
One of the biggest commodity gainers on the day was copper, which shot up 1.2% to a nine-week high amid good news overseas. First off, the Greek aid package gave support to markets across the board, which helped copper climb on the day, but the likely culprit of this temporary high is the weakness in the U.S. dollar. As fears over a failing euro begin to settle, the greenback is giving back the gains it had made when traders were fearful over the future of the common currency, pushing demand for greenbacks to a new level. Unfortunately for investors who have been with copper for the long haul, the industrial metal is still down almost 4% on the year, as a lack of demand from China, the world’s largest consumer of copper, has combined with an overall weakness in commodities in in the second quarter of 2011 [see also Ultimate Guide To Copper Investing].
One of the biggest losers came from the US-dominated corn; an agricultural mainstay that is one of the few commodities that is dominated by American production. In fact, today was the biggest drop corn has seen in some eight months, as a report from the U.S. government came in to spell bad news for the commodity. An acreage report showed that U.S. farmers “planted 92.282 million acres of corn this year, 1.8 percent more than projected by analysts in a Bloomberg News survey, and the second-highest since 1944″ write Whitney McFerron and Jeff Wilson. As of June 1 of 2011, stockpiles of corn came in 12% higher than expected, prompting a nasty 10.9% drop in corn prices to close out the quarter [see also Ultimate Guide To Corn Investing].
Disclosure: Charts courtesy of Barchart. No positions at time of writing.