Corn & Oil Prices Jump

Corn jumps as wet weather fans supply concerns, oil jumps
[full article]

 

Corn prices jumped Monday as investors bet that more rain in the U.S. Midwest will force farmers to plant less of the crop, tightening supplies and adding to growing food costs for consumers and livestock owners.

Other commodities traded mostly higher, with crude oil rising to a record near $120 and gold, silver and copper also gaining.

Corn prices have shot up 21 percent this year amid dwindling stockpiles and surging demand to feed livestock and make alternative fuels such as ethanol.

But the weather has been the biggest factor in recent days, with heavy rain in corn-growing areas leaving fields too soggy to work and putting farmers far behind schedule. More rain is expected in the coming days, meaning farmers may have to plant significantly less corn than planned. U.S. farmers were expected to plant about 86 million acres of corn in 2008, an 8 percent drop from last year.

"These forecasts for additional showers still continue to raise concerns that farmers may not be able to get the full 86 million acres planted. The weather will challenge them to get that done," said Shawn McCambride, analyst with Prudential Financial in Chicago.

Corn for May delivery jumped 10.75 cents to $5.88 a bushel on the Chicago Board of Trade after earlier rising as high as $5.96 a bushel.

Rising corn prices mean consumers can expect even higher grocery bills for meat and pork, as livestock producers are forced to pass on higher animal feed costs and thin their herd size.

The planting delay has prompted some farmers to consider using their rain-soaked acres for other crops like soybeans, which have a later growth cycle. That prospect sent soybean prices sharply lower Monday, with the May contract plunging 46.25 cents to $12.795 a bushel on the CBOT.

Other agriculture futures traded mixed. Wheat for May delivery added 15.5 cents to $8.16 a bushel on the CBOT, while July rice futures fell 50 cents to $23.68 per 100 pounds.

In energy futures, crude oil surged to a new high just below $120 a barrel, driven up by labor actions that cut crude supplies from the North Sea and Nigeria. Prices later retreated and gyrated between gains and losses as the dollar steadied against the euro.

Light, sweet crude for June delivery rose to a record $119.93 a barrel in electronic trading on the New York Mercantile Exchange in overnight trading, but later retreated to $118.82, still up 30 cents.

Other energy futures traded mixed. May gasoline futures fell 2.08 cents to $3.0329 a gallon, while May heating oil futures fell 0.79 cent to $3.3107 a gallon.

In precious metals trading, the boost in oil prices help lift gold more than $5 as investors bought the metal as an inflation hedge.

Gold for June delivery added $5.50 an ounce to fetch $895.20 on the Nymex, after earlier rising as high as $898.10.

Other precious metals also traded higher. Silver for May delivery gained 16.5 cents, while May copper rose 2 cents to $3.9355 a pound.
[full article]

 

BizAnalyst Network

The business and career development network for financial services professionals

 

Get Advice  |  Get Funding  |  Join Our Network

 

---

---