Crop prices fall on speculation of lower demand
NEW YORK (AP) — Prices for wheat, corn and soybeans dipped slightly on Tuesday as investors wondered if demand for the U.S. crops is slowing in other parts of the world.
Investors also could be anxious to sell agricultural commodities before Wednesday morning, when the U.S. Department of Agriculture releases its closely watched monthly report called World Agricultural Supply and Demand Estimates.
In wheat, there were no reports over the weekend of new demand, and international buyers are continuing to prefer crops from Russia and Eastern Europe to the U.S., Jack Scoville of Price Futures Group wrote in a note to clients. Indications of a slowing economy in China raise worries that the country will rein in soybean purchases.
Agricultural prices fall when there's lower demand, or the potential of lower demand.
Wheat for December delivery fell 6 cents to $8.8375 per bushel. December corn slipped 5.5 cents to $7.7775 per bushel. November soybeans fell 17.25 cents to $17.015 per bushel.
In metals and oil, most prices rose, mimicking the stock market. Like stocks, energy prices and industrial metals tend to move in sync with how investors feel about the economy. When investors think things are improving, they'll send up prices for oil and industrial metals since demand for them increases as manufacturing and construction expand.
The gains came a day before the Federal Reserve convenes to consider whether it should take more action to prop up the U.S. economy. Germany's high court is also expected to rule on whether the country can keep footing the bill for bailing out weaker European countries.
Gold, copper, palladium and platinum all moved up slightly.
December gold rose $3.10 to $1,734.90 per ounce. December copper rose 0.85 cent to $3.697 per pound. December palladium climbed $2.15 to $674.90 per ounce. October platinum inched up $3.20 to $1,607 per ounce.
Silver was the exception. It moved down narrowly, losing 6.7 cents to $33.566 per ounce.
In energy trading, benchmark crude, which is used to price U.S. gasoline, rose 63 cents to $97.17 per barrel. Brent crude, which is used to price international varieties of gasoline, rose 58 cents to $115.40 per barrel.
Heating oil increased 1.89 cents to $3.1857 per gallon. Wholesale gasoline gained 1.95 cents to $3.0435 per gallon. Natural gas jumped 18 cents to $2.992 per 1,000 cubic feet.
Though high gas prices might signal investors' faith in the economy, they're still a burden for people forced to pay more to fill their tanks. Motorists in about eight states are paying at least $4 per gallon, according to AAA, Wright Express and the Oil Price Information Service.
But some analysts expect prices to move lower next week, as the summer driving season winds down and refiners are allowed to start selling cheaper winter blends of gasoline.