Forex

The daily movements in the world's equity markets are influenced by a multitude of factors ranging from large institutional block trades and program trading to earnings and economic reports. However, one factor that is frequently overlooked is the influence of commodity prices. In fact, fluctuating commodity prices can have a tremendous impact on the earnings of public companies and, by extension, the markets. Read on to learn more about this relationship and why it matters to investors.
Lumber Prices
The average person would probably never ponder the cost of lumber unless he or she was in the process of building a house. However, the pricing of this commodity is closely watched and can affect many companies, such as homebuilders.

However, it's also important to note that many other types of companies pay close attention to lumber prices as well. For example, companies that are looking to expand and build out new locations, such as restaurants, retail chains and even pharmaceutical companies looking to build new manufacturing facilities would naturally be interested in the cost of lumber. After all, even a small tick up in prices can materially affect the cost of a structure.

Random length lumber futures and options trade daily on the Chicago Mercantile Exchange (CME) (Find out more about these on the CME Random Length Lumber Futures & Options page.) Quotes and information may also be published in the Wall Street Journal or Investor's Business Daily and is often noted on major business channels, such as CNBC.
Oil Prices
Many consumers only think about oil prices in the context of how it directly impacts their wallets. In other words, how much they will end up paying at the pump as the result of price fluctuations. However, oil is one of the cornerstones of the North American economy and its price is highly important to companies of all stripes.

The price of oil can affect a variety of companies ranging from retailers to manufacturers of plastics (oil byproducts are a big component in plastic). Just think about how all of the products that are on the shelves at your local Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) are shipped.

By extension, this means that these companies either have to eat the rising cost of fuel or try to pass some of it along to consumers in the form of higher prices. Unfortunately however, if they aren't able to pass along the cost increase, it can have an adverse impact on margins and net income, which can put downward pressure on stock prices and hurt investor returns.

The price of crude can be tracked on the New York Mercantile Exchange (NYMEX).
Wheat
Wheat is the primary ingredient in many popular cereals and foods. While cereal and other food producers may be able to pass along some of these costs, they may have to absorb some as well. This can impact their margins and, by extension, their profits.

Of course makers of such products aren't the only ones affected. Grocery and convenience stores must purchase the items to keep shelves stocked. Also don't forget about the impact on distributors and any middlemen. Fluctuating wheat prices can have a far-reaching impact on a variety of companies and on consumers
Corn
Corn in one form or another is used in a variety of products ranging from cereals, building materials, alcohols and even tires.

It's also worth noting that the price of corn is impacted by the demand and production of ethanol, which is an increasingly popular corn based fuel. As the demand for alternative fuels ramps up, corn prices could go even higher. Food manufacturers, retailers, consumers and, by extension, stock prices can be affected by fluctuating corn pricesCoffee
Rising or declining coffee prices can certainly have an impact on consumers that enjoy drinking it in the morning. It can also have an affect on companies that do a brisk breakfast business, such as diners and fast food chains like McDonalds (NYSE:MCD) or Burger King (NYSE:BKC). Also, companies like Starbucks (NYSE:SBUX), which derives the lion's share of its revenue from coffee or coffee related products, can be dramatically impacted as well
Gold
The price of gold can have an impact on jewelers as well as on retailers that sell or receive a portion of their sales from jewelry related items. For example, Macy's (NYSE:M) and many of the other well-known mall-based department stores generate a significant amount of revenue from their jewelry departments.

Gold can also be used in medical products, glass making, aerospace and a variety of other businesses. By extension, this means that fluctuations in gold prices can make the markets move.

In addition, because gold is found and valued all over the world, it is considered a universal currency. So, if the outlook for the U.S. equity markets and/or the economy is dim, it's likely that the demand for gold will increase as investors