The United Kingdom could be breaking away from the European Union in the near future, depending on the outcome of a vote next week. The June 23 referendum could set the stage for a British exit, or “Brexit,” from the EU, putting strain on their respective economies and creating political turmoil on both sides of the English Channel.
Earlier this week, it appeared increasingly likely that the British citizens were going to vote to leave the EU, which was causing investors to flee out of stocks and into gold and bonds, which are perceived as safer investments if trouble is looming.
However, the tragic murder of a pro-EU British Member of Parliament, Jo Cox, threw the vote into disarray on Thursday. The suspected killer may have right-wing leanings and is said to have shouted, “Put Britain First!” when he attacked.
The pro- and anti-EU camps suspended their campaigns, and next Thursday’s vote may even be delayed. As a result, investors worldwide will be following the unfolding tragedy and political responses in the coming days.
Wheat Market Wilts
As US farmers are harvesting their winter wheat crop, prices are plunging. Crop yields are projected to be at record highs this year, which will add to a global supply that should break record levels as well.
Forecasts for dry weather will likely help speed up the harvest, which could continue pressuring prices.
Overwhelming supply of wheat knocked prices to ten-year lows last month, with Kansas City wheat dropping as low as $4.31 per bushel. Other major global producers have been discounting their wheat, undercutting US farmers, making it even more difficult to turn a profit this year.
Petro Production Picks Up
The recent price rally over $50 per barrel may have put an end to pessimism in the petroleum industry. The number of oil rigs in operation has been declining for almost a year, but the last two weeks have seen an uptick in the number of drilling operations.
The potential for rising production encouraged traders to begin selling crude oil holdings, knocking oil futures as low as $46 per barrel on Friday morning.