2008 – A Year in Focus

When the new year dawned almost twelve months ago, several issues lingered but the scope and breadth of the problems had yet to be revealed and 2008 has been headline making, to say the least. Many commodities had been trending higher, threatening to breach psychological price barriers never penetrated before. Crude oil briefly crested the $100 a barrel mark before taking a breather and heading to unprecedented heights. Wheat soared amid news of record low ending stocks and whispers of food shortages echoed across multiple nations. The earliest rumblings of financial chaos became clanging bells by March with the fall of Bear Stearns a specter of things to come and gold triumphed over the $1000 an ounce level. Food issues came to a head in early May with the landfall of Cyclone Nargis in Myanmar, a major Southeast Asian source of rice. Chicago’s rice futures contract soared from relative obscurity to record highs. The high prices did not persist but the overall impression lingered on – this was not territory for which traders had a roadmap. As other grains markets soared in the summer months, this idea came home to roost.

For crude oil, breaking the $100 a barrel mark was only the beginning of a climb towards record high price levels. RBOB rocked headlines as it climbed to dizzying heights that left many consumers frowning at the pump. When the first reports of failing demand for fuels came through, the plunge caused vertigo that rocked other markets intrinsically linked to the energies markets and took us a step further into unprecedented trading territory.

As we enter the final two weeks of this year, there is no doubt that it has been one for the record books. Key psychological levels have been breached, only to see certain commodities turn back towards their lowest levels. Several nations across the globe are now battling the fallout of the global economic situation and fighting off recession. The current interest rate in the United States is at unheard of lows, signaling the continued efforts to reign in the economic meltdown. Several bailout packages destined for nation shaping companies have been proposed yet not implemented. As we maintain a broad focus on the horizon, it appears as though nothing will surprise us and the volatility that has permeated the markets should continue to offer opportunities for trading.