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Natural gas futures hit 2008 highs amid increase demand, corn futures rise

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Yahoo Finance's Ines Ferre looks at what's driving natural gas prices and the movement in corn futures.

Video Transcript

- Welcome back, everyone. We're taking a look at what's happening with energy stocks surging as crude and natural gas rises as well. More on that, let's bring in Yahoo Finance's Ines Ferré. Ines, what's happening right now?

INES FERRE: Yeah, well we are seeing a lot of movement in commodities. Let's start out with energy. So we have seen, today, WTI moving higher. We also saw Brent Crude on our Wi-Fi interactive board topping $113 a barrel again for the first time since late March.

But a lot of the action has also been in the natural gas futures prices. These natural gas futures hitting 13-year highs and surging, at one point, more than 10%. That was topping that short squeeze rally that we saw in January. In fact, if I pull up a year to date chart for natural gas, you can see it's up more than 100%.

Keep in mind that US natural gas prices have remained below the levels of Europe and of Asia. But that discount is slowly shrinking. And there's a couple of reasons for this. You've got store-to-backup inventories at levels below what our normal for this time of year.

You've got production that's been holding relatively flat. And then you've got the US that's been exporting natural gas to Europe, which has been having a real energy crisis. On the demand side, there's colder weather in some parts of the region that are expected to May 1st, so that is expected to increase demand for natural gas as well.

- And what about corn futures? What's moving them? And down the road a bit, how might President Biden's E15 gas sales impact that this summer?

INES FERRE: Yeah, so corn futures right now, today, topping $8 a bushel for the first time in 13 years. So you have to go back to 2008 to see these type of prices again. And again, look at these charts that we're watching in our Wi-Fi interactive. A couple of reasons for this, you've got the Russia invasion of Ukraine, that's been disrupting farming, disrupting trade flows.

You also, on the demand side, have seen American corn being exported to China as China has had lockdowns there, so some more exports there. And then you've got spring planting worries. Fertilizer costs, those have gone up and farmers have been opting to, perhaps, plant other agricultural goods like, soy or like wheat.

Bringing it back to natural gas, it is used in the production also of fertilizer. So keep in mind that as natural gas prices go up, fertilizer costs are also going up. You've got the situation in Ukraine that has been sending fertilizer costs higher as well. So this is expected to result in higher costs for food as well.

- Thanks to Yahoo Finance's, Ines Ferre.