A little bit of inflation to spice things up

Wheat, Corn & Soybeans, daily, June 4th to July 19th 2012

Although the Consumer Price Index (CPI) appears relatively benign last reported at 1.7%, it is instructive to look behind the number. The chart above shows the daily prices of three agricultural commodities, wheat ($WHEAT, black), corn ($CORN, red) and soybeans ($SOYB, green) from June 4th to July 19th. Soybeans are up 22.92%, corn is up 39.94% while wheat is up 44.92% so what will the impact be on CPI when it’s next released on August 15, 2012? The chart below captures part of another important component, energy prices, in the form of West Texas Intermediate crude ($WTIC, black); it too is up 11.29%.

It seems as though inflationary pressures, whatever the underlying causes (another blog post) are building.

WTIC oil, June 4th to July 19th, 2012

WTIC oil, June 4th to July 19th, 2012

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