Yahoo Finance’s Ines Ferre joins the Live show to discuss how commodities are trading on Wednesday.
BRIAN SOZZI: Markets have gotten used to high levels of commodities inflation this year, but maybe investors should begin to get used to prices coming down for a change. There, you see our very own Ines Ferre on our screen. Ines, you've been tracking the pullback in corn and soybean prices.
INES FERRE: That's right, because it's not just oil that we have been seeing a pullback in prices. We are also watching the agricultural commodities, which have been seeing a huge pullback. Year to date, in fact, corn futures-- take a look-- have lost all of their gains for 2022. Wheat prices are down about 30%-- more than 30% from the peak back in March. And you've got soybean futures, which are also, year to date, down 1-- almost 1 and 1/2%. So they've also given back their gains from 2022.
So you saw this big rise in commodity prices back in February, March, when you had the Ukraine invasion that happened. And there were supply concerns happening as well. So now the pendulum is really swinging the other way.
And I spoke to Dennis Sweeney. He's an agricultural commodities broker. He told me that the talk across all commodity assets is demand destruction, concerns about a recession. He said bids were scarce as funds tried to exit the last couple of weeks. That huge move that you've seen to the downside in oil prices, well, that also weighs on commodities. And a strong dollar also weighs on agricultural commodities as well.
BRAD SMITH: So, Ines, how is this going to impact food prices for consumers?
INES FERRE: So we know that the UN has had this food index that they have been tracking. And every month, they come out with those-- that index. This Friday, they are expected to come out with another reading. For the last two months, we have seen a month over month decline, a slight month over month decline. But if you take a look at a year over year, still, food prices are up about 29% globally year over year. So it will take some time. If these prices continue to go on this downward trend, it will take some time for that input cost to really translate to those food prices that you see at the grocery stores.
BRIAN SOZZI: And hopefully it'll translate eventually to Subway sandwich prices there, Ines. Almost 10 bucks for a Philly cheesesteak over at Subway.
INES FERRE: Wawa all the way. I'm totally with Brad.