Ukraine careens toward rough breakup

2014-03-14T12:00:00Z 2014-03-14T18:40:19Z Ukraine careens toward rough breakupWalt Breitinger Times Correspondent nwitimes.com
March 14, 2014 12:00 pm  • 

The crisis in Ukraine deepened this week as the Crimean region prepared for a referendum on Sunday about whether or not to break away from the rest of Ukraine. The vote could lead to a standoff between Russian President Vladimir Putin and Western leaders, who have declared the referendum illegal.

In expectation of potential trade wars, or even an armed conflict, commodities traders are stockpiling resources that could be cut off, like wheat; both Russia and Ukraine are major suppliers of wheat to the rest of the world. Wheat prices gained nearly 50 cents per bushel, trading Friday at $6.91.

Meanwhile, global investors took part in a “flight to quality” where they purchased assets they perceived as safe, like gold. During the week, gold gained more than $50 per ounce, reaching $1,388 on Friday, the highest price in six months.

Crude slips lower

Some traders had expected crude oil prices to rally this week, since Russia is one of the world’s largest oil drillers. Instead, prices dropped after the United States announced Wednesday it would release 5 million barrels from its Strategic Petroleum Reserve, a government stockpile of nearly 750 million barrels the U.S. holds for emergency purposes.

The release this week was heralded as a signal the U.S. stands ready to buffer the impact of the Crimean crisis. In the wake of the announcement, crude fell to a five-week low of $97.55 per barrel.

Some analysts point out that crude oil is another weapon the U.S. wields against Russia, since that nation depends on oil income; if prices drop, Russia’s economy could suffer.

Hog rally goes viral

Pork prices reached another all-time high this week as reports of the deadly PED virus continued to spread, with outbreaks now reported in 27 states.

The disease is almost always fatal to piglets if they contract it, which is sharply reducing the number of market-ready hogs that will be available in coming months. As scientists continue to study the extent of the disease and its impact on the U.S. pork supply, prices keep rising, gaining more than 30 percent over the last two months, with April hogs trading near $1.20 per pound on Friday morning.

Opinions are solely the writer's. Walt Breitinger is the president of Breitinger & Sons LLC, a commodity futures brokerage firm in Valparaiso. He can be reached at (800) 411-3888 or indianafutures.com. This is not a recommendation to buy or sell any market.

Copyright 2014 nwitimes.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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