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Holy Cow! Milk is Leading the Commodity Pack
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Writer, CNBC.com
Got Milk?
 |
Photo By: Liz West |
“Nobody ever really talks about milk, but that was the biggest priced commodity of the year,” noted Gurka during an appearance on CNBC Wednesday.
In 2010, milk futures [DACV1
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] were $13.72 for 100 pounds. In March of this year, they hit a high of $19.65, the highest level since July 2008. Since reaching that mark, however, they are down 13 percent. Still, that yearly performance puts milk on track to be the top performing commodity for the year, in terms of price percentage gains.
Gurka thinks grain prices will push them right back up.
“I think that grains are going to be the biggest focus mid-year, because you’re going to see massive swings. Right now the grain markets are really cheap and beat up. A lot of people are shorting it,” says Gurka.
It may be difficult to digest the milk-rally during a thin trading week, and milk has one of the lowest levels of volume among agricultural commodities, according to the CME Group [CME
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].
Others also say grain prices might not be so much cheap but rather normal for a depressed global economy, which may not bode well for the bovine trade.
Commodities YTD |
| Last | YTD % Change | |
| Milk | 17.05 | 24.27% |
| Feeder Cattle | 150.275 | 21.24% |
| Gas Oil | 921.25 | 19.95% |
| Brent Crude Oil | 109.27 | 15.32% |
| Heating Oil | 2.9085 | 14.40% |
| Live Cattle | 123.2 | 13.71% |
| Gold | 1595.5 | 12.25% |
| Crude Oil | 101.34 | 10.90% |
| RBOB Gasoline | 2.6888 | 10.64% |
| Lean Hogs | 85.75 | 7.52% |
Source: CNBC Analytics/Thomson Reuters |
"Price values are low. Corn futures [ZCH2
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] have hovered around $6.00 [per bushel] for three months, hitting $5.80 in November. We're seeing a rally now because people perceive corn to be cheap," says Michael Walker, commodities broker for the Chicago Board of Trade.
"But be careful of saying grains are cheap. If we don't see recovery in equity markets in Europe, we won't see corn at $7." Corn was last $6.34 in midday trading Wednesday.
Data is a real-time snapshot *Data is delayed at least 15 minutes
