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Commodities End 2017 With a Bang in Longest Rally on Record

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  • Commodities End 2017 With a Bang in Longest Rally on Record

  • #2
    Here's how Trump's infrastructure plan stacks up against the needs of America's roads and railways and why it too might derail


    • #3


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        • #5
          China Is Boosting Ties in Latin America


          • #6
            Commodities Are on Their Longest Winning Streak in History



            • #7
              Global Factory Boom Sends Commodities Prices Soaring



              • #8
                The Most Exciting Butcher Shops in America Are Restaurants



                • #9
                  Big mining's surge in value shames tech giants



                  • #10
                    Trump Proposes Most Aggressive Offshore Drilling Plan Ever



                    • #11
                      U.S. expects domestic crude output to hit records in 2018, 2019



                      • #12
                        Here's Why Investors Can't Get Enough of Oil With $70 in Sight



                        • #13
                          Growing Appetites Fuel Record U.S. Meat Production; Farmers and meatpackers produced a record 100 billion pounds of red meat and poultry in 2017

                          Friday, January 12, 2018, 1:33 PM ET
                          By Jacob Bunge and Benjamin Parkin

                          America is producing more meat than ever.

                          Farmers and meatpackers produced a record 99.7 billion pounds of red meat and poultry in 2017, the U.S. Department of Agriculture estimates. They are on track for an even bigger slaughter this year.

                          Tyson Foods Inc ., Sanderson Farms Inc . and other meat companies are building new plants that are expected to push U.S. meat production up 3.8% in 2018, the biggest increase in more than 20 years.

                          "We have a world that has a growing middle class that's demanding protein," said Dean Meyer, a farmer near Rock Rapids, Iowa who built a new hog barn and cattle feedlot to grow his sales to nearby slaughterhouses run by Tyson, JBS and others. "We think that's a great opportunity."

                          The U.S. beef-cattle herd has expanded by 12% over the past four years. Meat companies produced a record 47.7 billion pounds of poultry in 2017, and slaughtered hogs at a faster pace than ever before.

                          Growing flocks and herds have meant lower costs and fatter profits.

                          Tyson in November said its earnings per share hit a record in the company's 2017 fiscal year, while Hormel Foods Corp . achieved its highest-ever annual profit margin. Sanderson Farms said it sold a record 4.2 billion pounds of poultry in 2017.

                          Cheap grain is fueling the livestock and poultry boom. Five consecutive years of bumper U.S. crops have pushed down corn and soybean prices, making animal feed cheaper. Robust demand domestically and abroad encouraged meatpackers to build more and bigger plants to slaughter the added animals.

                          The production boom could mean lower meat prices at restaurants and grocery stores this year, analysts said. But Americans are also on course to eat more meat than ever in 2018, thanks in part to a strengthening economy. Americans will consume 222.8 pounds of meat per capita in 2018, the USDA projects, a sharp uptick from a year earlier.

                          Meat exports are also expected to grow as increasingly affluent consumers in southeast Asia, Latin America and elsewhere eat more protein. About 15% of U.S. meat production is exported.

                          The buildup could backfire for farmers and meatpackers if supplies outpace demand, or trade disputes disrupt U.S. exports. Some analysts say consumption is unlikely to keep up with the meat industry's rapid expansion. "I think the increase in supply is going to outpace demand growth for the next two to three years," said Heather Jones, an analyst with financial firm Vertical Group.

                          The Trump administration is renegotiating the North American Free Trade Agreement , or Nafta, and other pacts with countries that buy U.S. meat. Last year, the U.S. withdrew from the Trans-Pacific Partnership trade deal, which some meat industry executives hoped would boost exports to countries where demand for meat is growing rapidly.

                          That was a blow to Prestage Farms Inc ., a family-owned pork-and-poultry producer that is building a slaughterhouse in Eagle Grove, Iowa. The plant, capable of processing 10,000 hogs a day, was designed to produce pork for export to markets including those that had joined the TPP agreement.

                          "I'm frustrated that we're not at the table," said Ron Prestage , the company's president. "Over time there's an opportunity for the U.S. to get back in it with those same countries."

                          There are signs the big buildup in U.S. meat production is already eroding profits for some meatpackers, who have a record of booms and busts. Take turkey. U.S. turkey flocks have rebounded from a 2015 avian influenza outbreak that led to the culling of millions of birds.

                          Now a ballooning number of birds has pushed turkey prices to their lowest level in seven years, eroding processor profits. Pork processors, meanwhile, saw profit margins drop last fall as new plants fought for available hogs to slaughter.

                          Still, meat company executives are upbeat that both U.S. diners and foreign customers will buy more of their meat. "Our demand has been outstanding," Tyson Chief Executive Tom Hayes said in November.

                          Poultry companies including Tyson have at least eight new plants and expansions in the works, which will help boost U.S. chicken processing by nearly 10% over the next four years, according to Sanderson. Three new pork plants opened in 2017.

                          Prestage's plant is expected to open later this year. Together those plants are expected to boost pork processing capacity by 10% by 2019, according to the National Pork Producers Council .

                          "Right now, pretty much everybody except for the turkey people [is] making money," said Tom Elam , president of agricultural consultancy FarmEcon LLC. "Until that changes, they'll just keep expanding."


                          • #14
                            Oil Rises for Fifth Day as Rally Continues; Crude market shakes off bearish data, as investors bet on rising demand

                            Friday, January 12, 2018, 3:52 PM ET
                            By Alison Sider and Sarah McFarlane

                            Oil's rally continued to gather steam Friday, with prices rising for a fifth straight day to fresh three-year highs as investors continued to bet on rising demand and tighter supplies.

                            U.S. crude futures settled up 50 cents, or 0.78%, at $64.30 a barrel on the New York Mercantile Exchange . Brent, the global benchmark, rose 61 cents, or 0.88%, to $69.87 a barrel on ICE Futures Europe.

                            Prices have climbed more than 50% since June last year, and both benchmarks have posted gains for four straight weeks, propelled by geopolitical tensions, supply disruptions and production cuts by the Organization of the Petroleum Exporting Countries . More recently, prices have been boosted by extremely cold weather in the U.S. and China, along with questions about whether the Trump administration would reinstate some sanctions on Iran.

                            "Every time it sells off it has a knack for coming back," said Ric Navy, Senior vice president for energy futures at RJ O'Brien & Associates LLC, adding that it is "not out of the question" that U.S. crude prices could hit $70 a barrel soon, with few willing to stand in the way of relentlessly rising prices.

                            A weaker U.S. dollar has also helped lift oil prices Friday. The ICE Dollar Index sank to its lowest level in more than three years Friday, driven by expectations of monetary-policy tightening. A weaker U.S. currency makes dollar-traded oil less expensive for foreign buyers, and so its price tends to rise as the dollar falls.

                            "I think the story here is really dollar driven and demand driven," said J. Alexander Blackman, an executive at Standard Delta Co., a commodities-trading and energy firm.

                            Oil prices had edged lower in earlier trading Friday, after news that the administration extended sanctions relief under the landmark 2015 Iran nuclear pact, keeping the agreement intact for several more months. That eased worries of a supply disruption that had helped push prices higher this week.

                            Data from China showing a fall in monthly crude imports also weighed on prices in earlier trading.

                            But the market shook off the bearish data, a sign that the recent rally is likely to keep going, analysts and brokers said.

                            "For those hoping for an end to the bull market, it's probably a good idea to wait a few days before calling an end to the rally," analysts at TAC Energy said.

                            Gasoline futures rose 1.25 cents, or 0.68%, to $1.8495 a gallon. Diesel futures rose 0.83 cent, or 0.4%, to $2.0850 a gallon.


                            • #15
                              Iraq Joins U.A.E., Qatar in Call to Keep Oil Cuts