Five Key Charts To Watch In Global Commodity Markets This Week

(Bloomberg) -- In the spirit of July 4th celebrations, this week's edition has a strong focus on the US consumer. While Americans will enjoy cheaper prices at the pump and other energy-related costs from a year ago, inflation pressures are still paramount when it comes to food. Here are five notable charts to consider in commodity markets.

Gasoline

Americans will be hitting the road in record numbers this year, with 43.2 million motorists expected to drive 50 miles or more from their homes over the five-day holiday period that culminates Tuesday, according to AAA. The good news: Average national gasoline prices are more than a dollar per gallon lower than at the same time a year ago amid weakness in oil prices, providing consumers with welcome savings as other inflation pressures linger. The bad news: At about $3.54 a gallon, that's still above the five-year average. And given the increase in cars on the road, an extra fill-up may be needed from idling in traffic. Even so, Nymex gasoline futures — which tend to dictate retail prices — are well below the record set last summer, which should keep pump costs in check in the near term.

Meat

Backyard barbecues are a favorite for many Americans as they celebrate Independence Day, but consumers may want to limit their hamburger intake. Wholesale beef prices have jumped almost 25% from a year ago amid high feed costs and a cut in herd size due to ongoing drought in the Plains. For those seeking a bargain, chicken is the way to go. Wholesale boneless chicken breasts have plunged 60% over the same timeframe, while pork prices have dropped nearly 5%. Wholesale prices offer a leading indicator for what shoppers will eventually pay at the supermarket. 

Propane

To cook that meat, you'll need plenty of propane for your barbecue. And there's more positive news on that front. Benchmark US propane spot prices — which eventually trickle down to costs at retail — have plunged more than 65% since hitting a multiyear high last year in the weeks following Russia's invasion of Ukraine. Prices are likely to stay low with inventories at the highest ever on a seasonal basis in data back to 1994.

Power

Soaring heat across Texas, other parts of the central US and the West Coast is causing energy demand to spike with air conditioners running at full speed. But compared with last year, power prices are down across the board thanks to slumping costs of natural gas, which is the country's top source for electricity generation. In Texas, where scorching temperatures are likely to extend beyond the Fourth of July celebrations and keep many indoors, power prices are 27% lower than a year ago. The picture is much brighter further east, where prices on the largest US electric grid — managed by PJM Interconnection LLC — are 70% below 2022 levels at almost $50 per megawatt hour. Natural gas has almost halved over the same period.

Dairy

Last but not least, let's talk dessert. A holiday celebration isn't complete without a sweet treat to complete the meal. But this year's indulgence won't be as kind on wallets if ice cream is on the menu. The cost of a half-gallon of ice cream is near the highest on record, according to the latest US government data, in large part due to rising input costs. Retail milk is above $4 a gallon, while prices for sugar are at a peak. The US was the largest ice-cream consumer in 2022, according to Euromonitor.

--With assistance from Millie Munshi, Naureen S. Malik and Mark Chediak.

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