‘Mayhem’ in the global commodities markets: farm crisis, soft options and oof!
What the experts are saying about the rapid spike and fall in market prices

A free daily digest of the biggest news stories of the day - and the best features from our website
Thank you for signing up to TheWeek. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.
Farm crisis
In the weeks since the Russian invasion, the West Midlands dairy farmer Ed Hemming has slaughtered 26 cows, said Sam Chambers in The Sunday Times – a tenth of his herd. The unplanned cull was a sad but straightforward economic decision caused by “mayhem in the global commodities markets”. While Hemming’s bills for fertiliser and fuel needed to sustain his herd “almost doubled overnight”, he reports that “the price of culled cows has gone through the roof”, due to high demand for meat from McDonald’s and other outlets. “I am depleting my herd to generate quick cash to cover bills.
Soft options
Should you attempt to trade soft (or grown) commodities like grain? Investing directly – say, via an exchange traded fund (ETF) tracking prices – is best left to “sophisticated investors”, said David Rodeck and Benjamin Curry on Forbes Advisor. Since market prices can spike and fall rapidly, you need a high risk tolerance to “stomach short-term losses in pursuit of long-term gains”. One safer option is to check out a managed agricultural fund. Another is to look at stocks that benefit, directly or indirectly, from rising agricultural prices. It worked for me, said Ian Cowie in The Sunday Times. I bought into Archer Daniels Midland (ADM) – one of the biggest distributors of agricultural commodities in the world – in 2016 at $42/ share. The value of the stock has now doubled to around $85. Another good bet has been tractor-maker Deere (DE), whose price has shot up from $194 last August to $388 last week.
Oof!
For evidence of how swiftly sentiment can turn in commodity markets, you need only look at this week’s “vicious selling” of energy and metals, said Dominic Frisby on Moneyweek.com. Oil plummeted from a high of $140/barrel last week to close to $100 on Wednesday, taking gold, palladium, copper, aluminium and iron ore with it. “Don’t try to make sense of it.” The fundamental case for higher metals prices remains: “even without this war, many years of underinvestment were leading to supply shortages”. But the speculative spikes created by “panic and frenzy” have now given way to a “wash out”. The only question now is where “prices find their floor”.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Continue reading for free
We hope you're enjoying The Week's refreshingly open-minded journalism.
Subscribed to The Week? Register your account with the same email as your subscription.
Sign up to our 10 Things You Need to Know Today newsletter
A free daily digest of the biggest news stories of the day - and the best features from our website
-
Government shutdown odds spike as House GOP hardliners thwart McCarthy, spending bills
Speed Read House Speaker Kevin McCarthy's caucus is in disarray, and the US is now hurtling toward an avoidable debacle
By Peter Weber Published
-
Firefighters save confused delivery robots
Tall Tales And other stories from the stranger side of life
By Chas Newkey-Burden Published
-
'Rates have peaked'
Today's Newspapers A round-up of the headlines from the UK front pages
By The Week Staff Published
-
A downside of starting a business
And more of the week's best financial insight
By The Week Staff Published
-
How Birmingham went bust
Why Everyone's Talking About Bankruptcy of Labour-run local authority – the largest in Europe – has been a long time coming
By The Week Staff Published
-
The AI stock market wave: chancing an Arm?
Talking Point The SoftBank-owned British chip designer has started the countdown for a Nasdaq IPO in a snub to the London Stock Exchange
By The Week Staff Published
-
Interest rates: more ‘trauma’ for households
Talking Point Latest hike will cause ‘plenty of pain for borrowers’
By The Week Staff Published
-
Early retirees: should they get on their bikes?
Talking Point Mel Stride suggests over-50s should consider joining Deliveroo
By The Week Staff Published
-
Inflation crisis: is a recession the only answer?
Talking Point Experts suggest sharp slowdown may be necessary to avoid economic spiral
By The Week Staff Published
-
The ousting of Crispin Odey
Talking Point New sexual assault claims have felled one of London’s most prominent financiers. Why did it take so long?
By The Week Published
-
The rise and rise of Center Parcs: ‘the paradise machine’
In Depth The holiday resort chain is up for sale, with a price tag somewhere north of £4bn. What is the secret of its success?
By The Week Staff Published