U.S. cattle inventories fell to the lowest in 60 years after a drought in the South scorched pastures, prompting ranchers to shrink herds.
Cattle futures in Chicago surged to a record $1.29675 a pound on Jan. 25. Texas, the top state producer, had its driest year on record in 2011, according to the National Weather Service.

MEPS’ forecast for crude steel manufacturing in North America for 2012 is 123 million tonnes – up 3.3 percent, year-on-year. US steel mills maintained strong activity in 2011, despite poor market conditions in the second half. A more modest rise, at around 3 percent, is envisaged this year.

The Baltic Dry Index – an index of global freight rates for shipping dry commodities such as iron ore, coal and grain – had fallen for 23 consecutive days as of last Friday, cutting its value in half in the space of a month. The last time the index was this low, the world was in the depths of a credit crisis and a major recession.

Mirroring the gas market, wholesale electricity prices have dropped more than 50 percent on average since 2008, and about 10 percent during the fourth quarter of 2011, according to a Jan. 11 research report by Aneesh Prabhu, a New York-based credit analyst with Standard & Poor’s Financial Services LLC.

UBS AG said aluminium will average $1.01 a pound this year and $1.15 a pound next year, with demand growing faster than supply next year.

Over the past few weeks, nickel prices have escalated by 10 percent. Chromium prices are expected to follow a similar pattern. Scrap costs are increasing. These factors are predicted to lead to stock replenishment by both distributors and end users as they attempt to buy ahead of higher stainless steel prices resulting from rising mill input costs.

For companies that make plastics, fertilizer and other chemicals derived from natural gas, the falling prices are nothing short of a windfall. The same goes for makers of products from steel to bricks to beer. All use a lot of natural gas to heat their furnaces. U.S. manufacturers are becoming more competitive globally as a result of the countrys cheap natural gas, industry officials say.

Cattle futures for April delivery climbed 0.9 percent to close at $1.264 a pound at 1 p.m. on the Chicago Mercantile Exchange. After the settlement, the price reached $1.2645 in electronic trading, the highest for a most-active contract since the commodity began trading on the CME in 1964.

Corn and Wheat prices plunged the most in three months, while soybeans slid, after an increase in stockpile forecasts by the U.S. government eased concern that shortages will inflate prices for food and biofuels.

Natural gas for February delivery ended the day down 16.7 cents at $2.774/MMBtu on the New York Mercantile Exchange, the lowest settlement for a front-month contract since Sept. 4, 2009.