Associated Press
07-16-07
Agriculture Futures Fall Sharply
By LAUREN VILLAGRAN
The Associated Press
NEW YORK -- Forecasts for cooler, wetter weather in the Midwest this week _
the conditions needed for a healthy crop of corn and soybeans _ triggered a
sharp pullback in agriculture prices on the Chicago Board of Trade.
Other commodities markets were mixed at midday, with industrial and precious
metals mostly lower, while oil and gasoline futures moved in divergent directions.
Both corn and soybeans need moisture during the crucial pollination stage, which
for corn comes in mid-July and for soybeans in early August. If the Corn Belt gets
cooler-than-usual nights and slightly above normal precipitation the week of
pollination, farmers can expect better crop yields, said Elwynn Taylor, Iowa
State University extension climatologist.
The National Weather Service expects rain from northeast Iowa to Ohio over the
next five days.
Traders sent corn futures tumbling 20 cents to the daily trading limit on the
Chicago Board of Trade, while soybean futures approached their maximum
decline. The CBOT limits daily price swings in either direction to 20 cents for
corn, 50 for soybeans and 30 cents for wheat.
On Monday, the U.S. Department of Agriculture projected 2007 will see the
largest supply of feed grain since 1986-1987 crop year _ 378.2 million metric
tons based in part on estimates for an exceptionally large harvest of corn. But the
agency also said it expects increased demand to keep prices high this year. As
of July 5, outstanding sales of new crops were 5.1 million tons, more than double
the year-ago level.
The market appeared to shrug off the bullish aspects of the report, however.
December corn dropped 20 cents to $3.485 a bushel, while November soybeans
plunged 42.5 cents to $9.065 a bushel. September wheat tailed the others lower,
losing 12.75 cents to $6.08 a bushel.
Meanwhile, the oil market teetered between slight losses and intermittent gains
that pushed a barrel of crude above $74. The bulls seem to have returned to the
forefront: The latest data from the Commodity Futures Trading Commission on
Friday showed a surge in speculative long positions _ bets that prices will rise _
in crude oil and petroleum products traded on the New York Mercantile
Exchange.
Light, sweet crude for August delivery rose 41 cents to $74.34 a barrel. Gasoline
futures fell 2.72 cents to $2.1976 a gallon.
Overseas, copper prices slipped on the London Metal Exchange as worker
strikes at several mines were resolved, lessening the threat on world supplies.
Workers at Chile's Collahuasi mine last week agreed to a new contract and
ended their strike. Over the weekend, disputes were resolved at two mines in
Zambia.
Nymex copper edged lower, slipping 2.2 cents to $3.571 at midday on the
Nymex.
With the dollar up against the euro but mixed against other world currencies,
August gold dipped 50 cents to $666.80 an ounce on the Nymex. September
silver followed, edging down 3.5 cents to $13.075.