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Tag Archives: Commodities

A Rebound in Lumber Prices?

Reader JohnH points us to an article entitled “Lumber prices have fallen, but the stage is set for a potential 65% rally through the end of the year, an expert says”. What do markets say about this? Figure 1: PPI for lumber and softwood (blue, left scale), and front month futures, lagged one month (brown, right scale), futures as of 8/9/2021 close (dark brown +). NBER recession dates shaded gray. Source: BLS via FRED, macrotrends.com, ino.com, NBER and author’s calculations. The futures...

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Predicting the Lumber PPI for July-September

Calculated Risk (h/t pgl) noted the decline in futures lumber prices. Joseph has argued that this won’t necessarily show up in actual prices paid by the consumer for a while. I don’t have retail prices, but I have the BLS measure one step removed from consumers, the PPI for lumber. Figure 1: PPI for lumber and softwood (blue, left scale), and front month futures, lagged one month (brown, right scale). NBER recession dates shaded gray. Source: BLS via FRED, macrotrends.com, NBER and...

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US Agriculture and the Global Economy

Some recent research from the agency Mr. Trump found too meddlesome, and Mr. Mulvaney tried to dispatch (i.e., the USDA’s Economic Research Service): Economic Crises and U.S. Agricultural Exports WILLIAM M. LIEFERT ,  LORRAINE MITCHELL ,  AND  RALPH SEELEY ERR-282, April 26, 2021 Reforming Market Access in Agricultural Trade: Tariff Removal and the Trade Facilitation Agreement JAYSON BECKMAN ERR-280, April 07, 2021 Agricultural Market Access Under Tariff-Rate Quotas JAYSON BECKMAN ,  FRED...

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Oil Prices and Oil Futures

As of March 7th: Figure 1: Oil price, monthly average of daily spot, $/bbl (blue), spot close on 3/5 (blue square), and futures price (red +). Source: FRED, Bloomberg, NYMEX via ino.com. Jim on contango and backwardation, which cites Chinn et al. (2005) (an extended version published as Chinn and Coibion (2014). Should we place much faith in futures? Chinn and Coibion evaluate the relative performance of futures, random walk and ARIMA models for several commodities, including petroleum....

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How Great Are Things for Wisconsin’s Farmers?

It was surprising to me to see a Wisconsin farmer singing the praises of Mr. Trump’s policies. From WPR: Another Wisconsin speaker in Tuesday’s event, Cris Peterson, is a dairy farmer from Grantsburg and a member of the University of Wisconsin’s Board of Regents. She praised Trump’s trade policy and said her farm and others have seen conditions improve after a period of sustained low milk prices that drove hundreds out of business. Why am I skeptical? From Feedstuffs: The Midwest, Northwest...

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The US-China Trade War/Soybean Front: Home before the (Next Batch of) Leaves Fall

On July 9, 2018, over two years ago, reader CoRev wrote: Those of us arguing against the constant anti-tariff, anti-Trump dialogs have noted this will probably be a price blip lasting until US/Chinese negotiations end. We are on record saying the prices will be back approaching last year’s harvest season prices. Prices were in the 982 range in October 2017, midpoint in the previous harvest season. As of today, November futures are at 881. Since then, despite the recession, the overall CPI...

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The Relative Price of Soybeans vs. Grains, 2014-2019

Reader Ed Hanson insists I plot soybean prices from 2014 onward, instead of 2016, to show how factors other than tariffs affect soybean prices. I am happy to accommodate his request. I wonder why soybean prices suddenly deviate from grains overall, staring in March 2018. Figure 1: CPI deflated PPI for soybeans (blue) and grains (brown), in logs 2018M03=0. Orange shading denotes period during which China Section 301 action is announced/implemented. Brown dashed line is when Chinese tariffs...

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Have All Agricultural Commodity Prices Behaved As Did Soybean Prices?

That’s what reader sammy asserts, trying to support the proposition that Chinese retaliatory tariffs on imports of US soybeans had no impact on US soybean prices. … chart of soybean prices there are a number of other commodity price charts, such as copper, wheat, coffee etc. They are unaffected by the tariff war yet are remarkably similar to the soybean chart. That might be true over the past 45 years (I haven’t checked), but we’re talking about tariffs. Since metals are affected by...

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What a Trump Trade Victory Looks Like: Soybeans

Back in July 2018, reader CoRev wrote: …no one has denied the impact of tariffs on FUTURES prices. Those of us arguing against the constant anti-tariff, anti-Trump dialogs have noted this will probably be a price blip lasting until US/Chinese negotiations end. We are on record saying the prices will be back approaching last year’s harvest season prices. Back on March 23rd, when Mr. Trump announced intent to launch Section 301 actions, nearest month soybean futures closed at 1028. Latest...

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