U.S. hurricane season kicked off over the weekend, as the time period between June 1st and November 30th of each year brings special attention to these storms. Aside from the devastation they can bring to the areas they hit, these storms can also have a big impact on the commodity world (albeit short-term). Few commodities feel the brunt of the blow more than fossil fuels [for more commodity news and analysis subscribe to our free newsletter].
Markets were tested this week as the Nasdaq suffered several punishing trading sessions. Meanwhile, commodities continued to hold their lead over equities, mostly thanks to coffee futures, which have surged this year. Gold continues to battle with the $1,300/oz. mark and lost its grip on Wednesday. Below, we outline the performance of the commodity industry this past week, helping our readers pick out the leaders and laggards in each sector [for more commodity news and analysis subscribe to our free newsletter]:
Polar vortexes and heavy snow are two of the most defining characteristics of the 2013-2014 winter season in the U.S. Bitter cold and harsh weather conditions have taken their toll on parts of the economy, especially when it comes to employment figures. However, when it comes to natural gas prices, the cold weather has propelled the fossil fuel higher, as incessant demand has sent NG on a tear to open up the year [for more natural gas news and analysis subscribe to our free newsletter].
Natural gas is, perhaps, one of the most cyclical commodities in the space, as its demand and usage is heavily tied to seasonality. As a result, its price cycles for the past few decades have been somewhat predictable, even though it can be quite volatile day-to-day. Both of those factors combine to make it one of the most popular commodities traded on the market. 2013, however, looks like it may be moving away from its normal trend [for more natural gas news and analysis subscribe to our free newsletter].
The summer of 2013 has been notably cooler than the scorcher that 2012 brought, but August saw the heat turned up on the U.S., having a marked impact on a number of commodities. Soybeans, in particular, have seen their prices spike, as the hot and dry weather of the last few weeks has taken its toll. The run higher could throw a wrench in the commodity’s standard cycle, making it all the more difficult to trade [for more soybeans news and analysis subscribe to our free newsletter].
As fracking continues to develop, with new reserves being discovered on a daily basis, the world has watched natural gas production surge. Though still a non-renewable resource, natural gas burns cleaner and is cheaper than crude oil. As the world looks to replace dated energy sources, natural gas figures to be an increasingly significant commodity. At the forefront of the NG movement has been the U.S., as its presence in the natural gas world has continued to skyrocket in recent years [for more natural gas news and analysis subscribe to our free newsletter].