Beef, corn, and other food-related commodities were the hot topics these past two weeks. Feeder cattle futures are sitting near record highs -- so consumers shouldn’t be surprised to see beef prices continue to climb at their local supermarkets. This comes as corn continues to be one of the worst performers this year, with the grain dropping roughly 8% over just the past two weeks. Indeed, corn fell below a key level of $4 a bushel earlier this week.
“Corn is nearing a potential area of strong support,” said Ryan Detrick, a technical strategist at See It Market. “It’s very oversold and could form a nice double bottom with the early 2014 lows.”
Traders are now anxiously awaiting Friday’s crop report for the market's next big move.
“The corn market is factoring in one of the largest crops in history,” said Lannie Cohen, president of Capitol Commodity Services. “It is very oversold and it would not surprise me to see a low either just before Friday's crop report or right after.”
Corn's decline has caused many ranchers to hold on to their cattle, since it's often used as a main source of feed. This move has decreased the supply of beef and pushed up the price of foods such as steaks and burgers as the summer grilling season is heating up. Feeder cattle futures are up more than 25% since the start of 2014, but some traders say relief may be in sight.
“I think feeder cattle's top is in, and we could see some further selling from here, possibly down to $2.10 (a pound),” said Jason Rotman, president of Lido Isle Advisors. Feeder cattle was down 1.4% to trade at $2.1060 a pound in recent action.
Then there’s gold, which is hitting levels the yellow metal hasn't seen in three months after a company linked to one of Portugal's largest banks missed a debt payment. This has caused investors to buy the metal as a safe-haven asset. Gold was trading up about 1% to $1,340 an ounce recently.