Gold prices plunged lasst week, falling over $40 per ounce during the day Tuesday, the largest sell-off this year. Prices sank after poor economic news from China indicated that gold demand may be waning there. China was the world’s largest gold consumer in 2013, driven primarily by individuals’ purchases; in a slower economic environment, consumers may not be able to continue accumulating gold, which could hurt global demand.
On Thursday, when the market shut down early for the Good Friday holiday, gold prices had declined to $1,295 per ounce, the lowest price in two weeks.
Wheat prices bounced this week following bullish news out of Ukraine and the U.S. Great Plains.
In Ukraine, tensions continued to rise as the Ukrainian military attempted to oust pro-Russian militant groups. The Ukrainian campaign was largely unsuccessful, which could undermine the Ukrainian government’s credibility and bargaining power with Russia, who has tens of thousands of troops stationed on its border with Ukraine. Grain traders feared these actions would destabilize Ukraine’s ability to plant and harvest grain this year, which caused a rally in wheat prices.
Meanwhile, in the Great Plains another bout of cold weather could threaten the winter wheat crop emerging in many fields. Winter wheat is planted in the fall, goes dormant in the winter, and emerges in the spring. Late freezes, like those that hit this week, can damage the emerging wheat, reducing crop yields, which helped boost prices this week.
On Wednesday, prices for May soft red winter wheat, commonly known as Chicago wheat, topped out over $7.10 per bushel, the highest price in three weeks.
Soybean prices continued skyward this week, reaching the highest price since last July. Prices have been gaining on news of strong demand from domestic soybean processors.
Most U.S. soybeans are “crushed” to separate out the soybean oil from the protein-rich soybean meal, which is used predominantly as livestock feed. High meat prices are boosting demand for soymeal. Meanwhile, soybean oil is used for a variety of applications. Prices for soybeans and soybean meal hit all-time contract highs on Thursday, trading for $15.31 per bushel and $495 per metric ton, respectively.