Gasoline at Record January Prices, Meats Climb

For everyone loving the current levitation happening on the S&P 500 I have to point out to them the reality of commodity prices, most notably the climb in gasoline prices which is finally catching up with the rise in crude oil prices.  January’s average price for gas blew away the previous record high (set in 2011) of $3.095 per gallon.

This year’s average?  $3.37.

Now, when I look at retail sales and the channel stuffing going on (it’s reported in the news as ‘inventory building’) it’s obvious that this summer is going to be bad for anyone who still has a job in the U.S. to actually be able to drive to work.

Remember that prices only go up from here as we move into the summer.

In other news, has anyone really looked at the price of Cattle and Hogs lately?  I have and the charts pretty much look like the gasoline chart, except that prices bottomed earlier and started moving higher earlier, but otherwise it’s a straight line up.  Cattle futures closed at an all-time high of $129.31 on Tuesday.  Good thing Bernanke is only targeting 2% inflation because Cattle prices are only up 10% YoY. Since the bottom in June 2010 they are only up 48%.

But, seriously, there is no inflation.  In other news I’m the King of Siam.

Lean Hogs were up $1.03 on Tuesday to close at $89.66.  I guess since that’s not an all-time high again there is no inflation.  The major input for both of them is corn.  Corn futures have been range-bound since last fall and are currently trading at $633.88.  A move above $670 would be a good indicator that meat prices will go even higher.

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Tom Luongo

About Tom Luongo

Tom Luongo is a professional chemist and self-taught economist who has been following and trading stocks for nearly 12 years. He has no formal ties to the financial industry and considers that an asset in his analysis of the interplay between monetary policy and capital markets.

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