The Journal Gazette
 
 
Friday, September 10, 2021 3:35 pm

Column: Natural-gas price nearly doubles in year

WALT BREITINGER | Breitinger & Sons LLC

Natural gas prices have nearly doubled in the last 12 months, reaching $5.06 per million British Thermal Units early Friday. A BTU is the amount of energy required to raise the temperature of one pound of water by one degree Fahrenheit.

It has been more than 12 years since prices were this high, and they could fly sharply higher in the event of a colder than usual winter. Natural gas, which is the main source of home heating in the U.S., is also used to generate electricity for manufacturing industrial products, chemicals and fertilizers.

Supply shortages and demand increases are responsible for the increase. The supply side was threatened by production shutdowns in the Gulf from Hurricane Ida and earlier storms right as total gas in storage was significantly below average. The excessive heat in many areas increased gas use to make electricity for air conditioning.

Meanwhile, Europe is facing an acute shortage. Germany is negotiating to buy their natural gas from the new Russian pipeline. Russia is Europe's largest natural gas supplier, making many countries vulnerable to political problems with Vladimir Putin. Natural gas for delivery in October traded at $4.97 per million BTUs on Friday.

Crop report briefly sends grains lower

The much-anticipated report was seen as bearish, but only pushed prices lower for a few minutes following its release.

According to the USDA, the size of this year's corn crop was estimated as 14.996 billion bushels, which was based on a yield of 176.3 bushels per acre. Soybean production came in at 4.374 billion, and that's based on a yield of 50.2 bushels per acre. China's production of corn was less than expected.

Soybeans tumbled sharply on the report, but recovered by closing time to trade 22 cents higher. Toward closing time at the Chicago Board of Trade, December corn traded at $5.17 per bushel while November soybeans traded at $12.86 per bushel and December wheat brought $6.91 per bushel.

Coffee reduces cancer risk, report says

Coffee not only helps kick-start your day, but research from the British Medical Journal also suggests drinking coffee reduces the risk of prostate cancer. Other studies have shown coffee consumption lowers liver, bowel and breast cancers, too.

Arabica coffee futures for December delivery traded at $1.88 per pound.

Walt Breitinger is a commodity futures broker in Valparaiso. He can be reached at (800) 411-3888 or www.paragoninvestments.com. This is not a solicitation of any order to buy or sell any market.


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