Commodity Blog

Commodity Prices – Corn

Oil climbed today, rising for the second day, as central banks of developed nations signaled that they may stimulate their economies. Janet Yellen, a member of the Federal Open Market Committee, suggested that the US economy needs stimulus despite signs of recovery:

I consider a highly accommodative policy stance to be appropriate in present circumstances. But considerable uncertainty surrounds the outlook, and I remain prepared to adjust my policy views in response to incoming information. In particular, further easing actions could be warranted if the recovery proceeds at a slower-than-expected pace, while a significant acceleration in the pace of recovery could call for an earlier beginning to the process of policy firming than the FOMC currently anticipates.

Masaaki Shirakawa, the Governor of the Bank of Japan, said that the central bank will perform “powerful easing”. The European Central Bank hinted that it may resume purchases of sovereign securities. Futures for crude oil delivery in May gained $0.94 to $103.64 per barrel on NYMEX. Brent was up from $120.08 to $121.79 per barrel as of 20:29 GMT on ICE today.

Corn gained for the first time this week and wheat advanced for the second consecutive session today on concerns that low temperatures may hurt crops in the United States. The USA is the largest exporter of both grains. Prices may yet fall as rains in Europe may boost plant growth. Corn climbed from $6.3750 to $6.4450 per bushel today on CBoT before trading at $6.3925. Wheat was up from $6.2925 to $6.3900 per bushel, following the advance to $6.4775.

Corn jumped today after the US Department of Agriculture reported that inventories reached the lowest level in eight years. Wheat and soybeans also surged.

Corn stocks fell 8 percent to 6.01 billion bushels as of March 1 from a year ago. That was the lowest level in the period since 2004.

Wheat stockpiles fell 16 percent from the previous year to 1.20 billion bushels. That was the lowest level in three years.

Soybeans inventories were up 10 percent. Still, prices rose as US farmers plan to sow 73.902 million acres this year, 1.4 percent less than in 2011 and the lowest in five years.

Rabobank International wrote in its report today:

Given the long season ahead and the risk of weather disruptions along with low inventories, the outlook for soybean and corn crops remains bullish.The upside risk is considerable, and if crop potential is threatened by weather, we would expect prices to visit new highs.

Corn price climbed from $6.0550 to $6.4400 per bushel on CBoT today. Soybeans advanced from $13.5450 to $14.0200 per bushel in Chicago, while the intraday high of $14.1600 was the highest price since September 12. Wheat surged from $6.1525 to $6.5875 per bushel today.

Crude oil rose today as US stockpiles rose less than was predicted and after the positive news from the United States and Europe lifted traders’ mood. Gold and silver also posted gains.

US inventories of crude grew 0.8 barrels last week, compared to the average forecast of 1 million barrels. US employers added 216,000 jobs, more than 204,000 predicted by experts. Holders of Greek bonds equal to 58 percent of Greek debt agreed to participate in bond swap.

Crude oil for delivery in April advanced $1.46 to $106.16 per barrel on NYMEX. Brent crude traded near $123.83 per barrel as of 1:55 GMT on ICE after rallying from $122.19 to $124.20 yesterday. Gold was at $1,684.50 per ounce today on COMEX, following yesterday’s rally from $1,675.00 to $1,685.00. Silver was up from $32.95 to $33.40 per ounce yesterday.

Corn fell on forecast of record harvest in the USA. The commodity may yet advance as forecasters predict a decline of global stockpiles by 4.2 percent to 123.43 million metric tons by October 1 as bad weather may harm crops in Central and South America. Corn slumped from $6.5775 to $6.4375 per bushel on CBoT at the previous trading session before trading today at about $6.4350.

Commodities declined after a report showed that the eurozone economy contracted. Eurostat reported that eurozone gross domestic product fell 0.3 percent in the fourth quarter of 2011. The negative data hurt most commodities, including crude oil, corn, sugar, and wheat.

Crude oil also declined on the speculation that the European Union may resume negotiations with Iran about the Iranian nuclear program. Forecasters predict that today’s report will show an increase of the US stockpiles, adding to the downside factors for crude. As of agricultural commodities, experts forecast that supply will outpace demand for most of crops, decreasing prices even further.

April futures for crude oil delivery traded at $104.99 per barrel on NYMEX today after falling $2.02 to $104.70 per barrel yesterday. Brent traded near $122.12 per barrel on ICE today after yesterday’s drop from $124.27 to $122.32. Corn fell from $6.6475 to $6.5600 per bushel before trading today at $6.5800 on CBoT. Sugar was down from $0.2462 to $0.2406 per pound on ICE at yesterday’s trading session. Wheat was at $6.5325 per bushel on CBoT today, while it was down from $6.6625 to $6.5600 yesterday.

Corn and soybeans fell on forecast that rains may alleviate drought in South America. Global Weather Monitoring predicted that about 90 percent of areas planted with soybeans in Argentina and Brazil will get as much as 3 inches (7.6 centimeters) of rainfall. Previously, the region suffered from drought, therefore the forecast increases prospects for output.

Returning worries about the debt crisis in the European Union also hurt the commodities. European leaders were meeting yesterday at summit in Brussels. Investors are concerned that previously planned measures won’t be enough to contain spread of the problems across the eurozone.

Corn traded near $6.3200 per bushel today as of 00:43 GMT on CBoT, following the slump from $6.3925 to $6.3200 yesterday. Soybeans traded at $11.8900 per bushel today after falling from $12.1425 to $11.8525.

Commodities advanced today as German economic confidence improved, while China’s economic growth slowed, spurring speculation about stimulus. Oil, corn and soybeans were among gainers.

China’s gross domestic product increased 8.9 percent in the fourth quarter of 2011, following the 9.1 percent expansion in the third quarter. That was the slowest growth in 10 quarters. The report fueled talks that the country will perform measures to stimulate economic growth.

ZEW Economic Sentiment for Germany increased from -53.8 to -56.1 (month-on-month) in January, the highest level since July 2011. Economic expectations for the eurozone improved to -32.5 this month from -54.1 in the month before.

Standard & Poor’s downgraded credit ratings of several European countries on January 13. Markets were downbeat somewhat after the action, but quickly recovered as such move was expected and generally priced in.

February futures for delivery of crude oil advanced $2.01 (2 percent) to $100.71 per barrel on NYMEX. Brent oil rose from $111.42 to $111.57 per barrel as of 23:54 GMT today on ICE. Corn price was higher from $6.0125 to $6.0600 per bushel on CBoT today, while soybeans rallied from $11.6300 to $11.8275 per bushel.

Corn and wheat dropped today after the US Department of Agriculture predicted that global stockpiles will grow. Soybeans also declined. The USDA projected that world wheat inventories will increase by 1.5 million metric tons to 210.0 million in the 2011–12 season, global corn stockpiles will grow 1.0 million tons to 128.1 million tons and soybean ending stocks are projected to be higher by 45 million at 275 million bushels.

Earlier, the agricultural commodities were rising as adverse weather posed threat to crops in South America. Nevertheless, the estimates of the USDA showed that lower supply from the region will be mostly offset by production in other parts of the world.

Wheat slipped from $6.4125 to $6.0500 per bushel as of 23:47 GMT today on CBoT. Corn tumbled from $6.5125 to $6.1150 per bushel, while soybeans fell from $11.9775 to $11.7350 per bushel today.

Corn and soybeans were rising today on concerns that bad weather in South America may hurt crops. Later the agricultural commodities reversed its trend. Corn closed above the opening price, while soybeans ended session with losses.

The continuing drought in Brazil and Argentina is worse than forecasters previously estimated and yield may be lower than was anticipated. The US Department of Agriculture predicted that Argentina will harvest 29 million metric tons of corn and 52 million tons of soybeans.

The problems in the European Union reduced demands for commodities, including corn and soybeans. A report of the European Commission showed that the economic sentiment in the eurozone declined.

Corn closed at $6.4350 per bushel on CBoT today after opening at $6.4200 and climbing to $6.4950. Soybeans fell from $11.9800 per bushel to close at $11.8852, following the advance to $12.0900.

Corn jumped today in the longest rally this year on concerns about dry weather in South America. Commodity Weather Group predicted that about 50 percent of the crops in Argentina will be dry in the next 10 days and about a third of Brazil’s crops will also suffer from drought. Corn advanced from $6.3200 to $6.4125 per bushel today as of 23:32 GMT on CBoT and reached $6.4625 earlier — the highest price since November 16.

Oil declined as concerns about the European debt crisis intensified. The European Central Bank boosted lending to banks of the eurozone, spurring speculation that the European financial system is failing. February futures for crude oil delivery dropped $1.98 to $99.36 per barrel on NYMEX. Brent crude declined from $109.06 to 107.41 per barrel today on ICE after falling earlier to $106.77.

Corn retreated today on the forecast of rising global supplies. The crop reached the highest price in a month yesterday.

The US Department of Agriculture estimated that the world production will grow 4.8 percent to 867.5 million metric tons in the 2011–12 season. The global stockpiles will shrink by just 0.8 percent, demonstrating the smallest drop in three years. The output from the United States is expected to decline by 1.1 percent, by the growth of the production in other parts of the world, including the European Union and Russia, should surpass the predicted drop. Supply is rising as farmers reacted to the record prices this year by boosting production.

Corn prices advanced yesterday on the speculation that adverse weather in South America would hurt crops in South America and would increase demand for supplies from the USA. The prices reached the highest level since November 17.

Corn spot price was down from $6.1550 to $6.1450 per bushel as of 3:27 GMT today on CBoT. Yesterday, the price jumped from $6.0575 to $6.1675, while the daily high was $6.1900. The prices reached the record level of $7.9975 on June 10.