Drivers Warm to Cheap Gasoline
As motorists fuel up for their annual trip to grandmother’s house, they’re likely to be thankful for the cheapest gas in more than four years. With gasoline futures trading near $2.01 per gallon on Friday, nationwide prices at the pump (which include taxes, delivery costs, and other expenses) are well under $3.00 per gallon in most parts of the country.
Economists expect that lower prices will give consumers a little extra money to spend on other items, which will be a welcome surprise especially since costs of this year’s Thanksgiving meal are expected to rise slightly.
Eventually, lower gasoline prices could stimulate more driving demand or encourage refineries to reduce production. This could ultimately cause prices to rise, but drivers can enjoy cheap fuel for now.
Bountiful Grain Harvest
US corn and soybean farmers are also giving thanks this week as their record-breaking harvest nears completion.
After wet conditions slowed progress across much of the Grain Belt during the last few months, most farmers are finally wrapping up harvest with over 90% of corn and 95% of soybeans brought out of the fields. Despite the tough harvest conditions, 2014 has turned out to be the biggest production year for corn and soybeans in history. Total corn production is estimated at 14.4 billion bushels with a national average yield of 173.4 bu/acre, and soybean production is nearing 4.0 billion bushels with a national average yield of 47.5 bu/acre.
Due to the massive crops, prices for grains are significantly lower this fall than the past few years, but recent demand from end users has helped to stabilize prices, which stood Friday at $3.80 per bushel for corn and $10.40 for soybeans.
Cold Shocks OJ Market
Extreme cold temperatures in Florida this week sparked fears that frost could hit orange groves later this winter. Although unusual for the Sunshine State, hard freezes can derail production, cutting sharply into supplies.
As a result, prices for frozen concentrated orange juice futures catapulted 20 cents higher from one-year lows, reaching $1.42 on Friday.
If the crop avoids significant damage this winter, many analysts expect prices to continue lower as Americans have been shying away from orange juice in recent years, favoring more exotic juices or lower-sugar beverages.