Wheat declined today on prospect for falling demand for the crop in the United States as well as for US exports in other countries. Algeria turned away from the USA to other exporters, Argentina among them perhaps, for supplying wheat. Analysts say that surging prices for the agricultural commodity is the main reason for slower demand. Wheat dropped from $6.4875 to $6.4500 per bushel on CBoT.
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The Grain Industry Association of Western Australia predicted that output from Western Australia may double to 9.24 million metric tons, above the 9.12 million tons estimated last month. Rainy weather in Argentina may help accelerate planting. Oil World forecast that Argentine farmers will increase sowing 6.8 percent to 4.87 million hectares (12 million acres).

Growing production in the Southern Hemisphere added to increasing supply from Russia and Ukraine. As a result, demand for the US wheat shrank. US exports are expected to drop to 26.54 million tons in the 2011–12 season from 35.1 million tons a year ago, according to the Department of Agriculture.

Wheat spot price was near its opening level of $6.1625 per bushel as of 8:09 GMT on CBoT.
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The referendum, promised by Greek Prime Minister George Papandreou, threatened the stability of the Eurozone. Some of the European leaders even spoke about expelling Greece from the European Union. Now tensions receded, reinvigorating markets.

Economists expected the ECB to keep the interest rates unchanged today. Many market participants were concerned that the rates are too high for the strained economy of the EU. The central bank, lead by its new President Mario Draghi, surprised everyone by cutting the main minimum bid rate by 25 basis points to 1.25 percent.

Wheat was down yesterday as the record harvest boosted the global stockpiles. International Grains Council estimated that output will increase 5 percent to 684 million metric tons in the 12 months ending June 30, pushing inventories to the highest level in a decade. The supply expanded as major wheat exporters, such as Russia and Ukraine, resumed their shipments after the drought last year.

Wheat was up today from $6.2300 to $$6.3575 per bushel as of 22:27 GMT on CBoT, following yesterday’s decline from $6.2900 to $6.2225 per bushel. Spot price for Brent crude jumped today $109.11 to $110.83 per barrel today on ICE, rebounding from the daily low of $107.83 per barrel.
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The forecasts of good weather drove soybeans down. Dry weather in Brazil and rains in Argentina should boost harvest. The problems of Europe and the resulting worries also weighted down the oilseed. Soybean prices retreated from $12.2525 to $12.2350 per bushel today on CBoT.

The European crisis also caused the drop of rubber to the lowest level in 14 months. The leaders of European nations will discuss the situation in Europe at the summit this weekend. Some economists argue that the bailout fund will be boosted. Yet others speculate that the politicians won’t be able to reach an agreement and such speculation weight the commodity down. January future fo delivery of rubber slumped as much as 4.4 percent to 25,445 yuan ($3,985) per ton in Shanghai.
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India’s production of sugar may reach a highest level in four years. Analysts predict the output may total 25.83 million metric tons in the year starting October 1, compared with 24.2 million tons estimate for this year. The high production may prompt India to lift the limit on exports. The resulting boost of supplies on global markets can drive prices down. Sugar spot price fell 1.1 percent to $0.2760 from $0.2790.
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Harvest in the US was threatened by drought. Recent rains in parts of the Midwest eased concerns about the current harvest and planting of winter wheat.

The government newspaper Rossiyskaya Gazeta reported today that Russia may harvest more than 90 million metric tons of wheat. Wheat profited from the ban of exports by Russia last year, but as the nation ended the ban the grain is under pressure.

December settlement for wheat slipped $0.0425 (0.5 percent) to $7.9075 per bushel as of 13:15 on CBoT.
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Sugar fell today on the speculation that India will increase exports, causing supply to exceed demand. On the other hand, China and Indonesia are going to expand their purchases of the commodity, potentially supporting prices. October contract for delivery of raw sugar slipped $0.0022 (0.8 percent) to $0.2762 per pound as of 12:24 on ICE.
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From the technical analysis point of view, the decline is finely justified as a correction that followed a sharp rally in July. That rally was induced by the rumors that Brazilian production will decline.

The market analysts point out the fact that the buyers are currently afraid of the tons of supply that may get into the market anytime. If that happens, supply may overwhelm any demand, sending the prices down the hill.

September sugar futures fell from $29.02 to $28.27 per 100 pounds or more than 2.5 percent as of 17:17 GMT on ICE today. It’s the lowest level since July 18.
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Copper fell to the lowest level in four weeks after the report showed that manufacturing in China, the biggest user of the metal in the world, slowed. China’s Flash Manufacturing PMI and Flash Manufacturing Output Index were at the lowest level in 28 months, according to HSBC Purchasing Managers’ Index Press Release. September futures for delivery of copper slid $0.0525 (1.2 percent) to $4.3835 as of 13:09 on COMEX, the biggest decline since June 23.

Wheat dropped as demand for the US exports declines, while exports from Russia grow. The US Department of Agriculture reported that US export sales declined 22 percent to 403,528 metric tons, the lowest since the end of May, in the week ended July 14 from a week ago. Russian agriculture minister claimed that the country may ship to foreign buyers as much as 18 million tons in the year that started July 1. September futures for delivery of wheat contracted $0.1975 (2.8 percent) to $6.7725 per bushel by 13:15 on CBoT, the biggest drop since June 30.
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Gold capped the longest rally since November 2009 today on concerns about the debt problems in the US and Europe. Standard & Poor’s warned that it may cut the US credit rating. Eight banks failed the stress test of the European Union banks. August futures for gold delivery gained $0.8 to $1,590.10 as of 13:37 on COMEX, reaching a new all-time record.
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Wheat fell on the forecast that good weather in the US and Western Europe will help crops. The return of Russia to export market is expected to increase supply of wheat, further reducing prices. Contract for delivery of wheat in September dropped $0.0775 (1.2 percent) to $6.1925 per bushel by 10:49 on CBoT.

Copper futures climbed to the highest in almost three months on concerns that adverse weather in Chile, the biggest producer in the world, and the strike at the Grasberg mine in Indonesia will disrupt supplies. The positive employment data also helped the industrial metal. Futures for delivery of copper in September advanced as much as $0.107 (2.5 percent) to $4.442 per pound as of 13:18 on COMEX, following the jump to $4.4435, the highest settlement since April 12.
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Gold decline as the rebound of the euro reduced demand for the precious metal as a safe haven. The European currency gained 1.3 percent after Germany’s Chancellor Angela Merkel said that her country is committed to the stability of the euro. Futures for delivery of gold in August slipped $10.50 (0.7 percent) to $1,532.70 by 13:38 on COMEX.

Crude oil advanced after the dollar fell as Moody’s Investor Service put the US credit rating on review for downgrade. The rating agency will cut the debt rating of the North American country if there would be no progress in increasing the debt limit. July futures for crude oil delivery traded at $100.40 per barrel on NYMEX following the fall by 1.8 percent to $98.46.
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