Bloomberg News

Corn, Soy Surge as Drought Threatens Crops: Commodities at Close

July 16, 2012

The Standard & Poor’s GSCI gauge of 24 raw materials rose 1.5 percent to settle at 630.63 at 3:57 p.m. in New York, led by grains.

The UBS Bloomberg CMCI index of 26 prices climbed 1 percent to 1,548.16.

GRAINS, OILSEEDS

Corn futures rose to a 10-month high and soybeans extended a rally to the costliest since 2008 on speculation that an expanding drought will cut supplies from the U.S., the world’s biggest producer of the crops.

Most of the Midwest will be unusually dry and hot in the next 10 days as occasional showers will be too light to induce more than brief crop improvement, T-Storm Weather LLC in Chicago said in a report. July is on pace to rank as the third driest and warmest in 118 years of data, the private forecaster said. Soybean-meal futures climbed to a record.

Corn futures for December delivery jumped 4.4 percent to $7.725 a bushel on the Chicago Board of Trade. Earlier, the price reached $7.78, the highest for a most-active contract since Aug. 29.

Soybean futures for November delivery rose 2.4 percent to $15.905 a bushel. Earlier, the price reached $15.985, the highest since July 2008.

Wheat futures for September delivery surged 4.3 percent to $8.845 a bushel. Earlier, the grain reached $8.89, the highest since Feb. 15, 2011.

CRUDE OIL

Crude oil rose, capping the longest rally since late April, as manufacturing in the New York region expanded in July at a faster pace than anticipated.

On the New York Mercantile Exchange, oil futures for August delivery rose 1.5 percent to $88.43 a barrel. The price climbed for the fourth straight session.

Brent crude for August settlement increased 1.1 percent to $103.55 a barrel on the London-based ICE Futures Europe exchange.

Statoil ASA failed to sell North Sea Forties at a higher price. No bids or offers were made for Russian Urals in Europe. Vitol Group offered Nigerian Bonny Light for delivery in northwest Europe.

Iraq will reduce its daily exports of Basrah Light grade from the Persian Gulf by 3.8 percent in the second half of July, compared with the previous two weeks, a loading program obtained by Bloomberg News showed.

OIL PRODUCTS

Gasoline rose on speculation that weakening U.S. retail sales will prompt the Federal Reserve to act to boost the economy, bolstering prospects for fuel demand.

On the Nymex, gasoline futures for August delivery climbed 1.4 percent to $2.8547 a gallon.

Heating-oil futures for August delivery gained 1.4 percent to $2.8277 a gallon.

SOFT COMMODITIES

Cotton futures rose to a three-week high as below-average rain spurred supply concerns in India, the world’s second- biggest producer.

On ICE Futures U.S. in New York, cotton for December delivery gained 0.9 percent to 73.3 cents a pound. Earlier, the price touched 73.4 cents, the highest since June 20.

Raw-sugar futures for October delivery rose 0.2 percent to 22.77 cents a pound.

Arabica-coffee futures for September delivery dropped 1.2 percent to $1.8395 a pound.

Cocoa futures for September delivery fell 0.9 percent to $2,197 a metric ton.

Orange-juice futures for September delivery slipped 3.8 percent to $1.1795 a pound. Earlier, the price touched $1.1665, the lowest since July 2.

BASE METALS

Copper fell for the second time in three sessions as slower growth forecast by the International Monetary Fund and Europe’s deepening debt crisis added to speculation that demand for raw materials will slow.

Copper futures for September delivery slid 0.5 percent to $3.485 a pound on the Comex in New York. The metal has fallen 8.9 percent since the end of the first quarter.

Aluminum, zinc, nickel and lead rose on London Metal Exchange, while tin declined.

NATURAL GAS

Natural gas dropped for the first time in four sessions on speculation that hot weather won’t erase an inventory surplus of the power-plant fuel.

On the Nymex, gas futures for August delivery fell 2.5 percent to $2.801 per million British thermal units.

U.K. gas declined for a second day as imports from Norway rose to a two-month high.

Day-ahead gas fell 0.85 pence, or 1.5 percent, to 55 pence a therm at 4:13 p.m. London time, after reaching 54.25 pence, the lowest since June 25. A therm is 100,000 Btu.

PRECIOUS METALS

Gold futures fell for the fourth time in five sessions as the Fed refrained from announcing more stimulus measures amid mounting signs of slowing global growth.

On the Comex, gold futures for August delivery fell 40 cents to $1,591.60 an ounce.

Silver futures for September delivery slipped 0.2 percent to $27.321 an ounce.

On the Nymex, platinum futures for October delivery fell 1.2 percent to $1,417.30 an ounce. Palladium futures for September delivery retreated 1.3 percent to $577.85 an ounce.

LIVESTOCK

Cattle futures fell, capping the longest slump since May 2011, on speculation that U.S. beef supplies will increase as ranchers move animals from pastures scorched by drought.

On the Chicago Mercantile Exchange, cattle futures for October delivery fell 0.7 percent to $1.2055 a pound. The contract dropped for the sixth straight session, the longest slump in 14 months.

Feeder-cattle futures for August settlement fell by the CME limit of 3 cents, or 2.2 percent, to $1.36 a pound, the lowest for a most-active since Sept. 23. The drop was the biggest since May 23, 2011.

Hog futures for October settlement dropped 0.3 percent to 79.2 cents a pound. Earlier, the price touched 78.7 cents, the lowest for a most-active contract since Jan. 7, 2011.

To contact the reporter on this story: Patrick McKiernan in New York at pmckiernan@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.


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