Wheat also fell with other commodities on bad news from Europe. Bailout for Greece was postponed as Greek leaders rejected additional budget cuts that other members of the European Union demanded. Most traders were unprepared for such turn of events as it has looked almost certain that Greece would receive aid.

Wheat fell from $6.4575 to $6.2925 per bushel as of 20:40 GMT today on CBoT.
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Gold was rallying through whole January, but hit resistance in February. The precious metal was trading sideways for several sessions, moving in a range of about $1,713 to 1,760 per ounce. Development of the situation in Europe will likely be crucial for performance of the metal in a short term. For now, Europe looks a little better than was though previously, but the perception of the situation in the eurozone may change anytime.

Gold spot price climbed from $1,731.40 to $1,746.80, but retreated and traded near $1,732.70 as of 23:42 GMT today on COMEX.

London-traded Brent grade of oil performed vastly different from its New York-traded counterpart. That’s an unusual behavior as most of the time all types of oil are influenced by same fundamentals. Rising demand for Brent can be explained by forecast of below-normal temperatures in Europe. Additionally, a militant group in Nigeria damaged pipeline that belongs to Italian company, resulting in a loss of 4,000 barrels per day of production.

Futures for delivery of crude oil in March dropped $0.93 to $96.91 per barrel on NYMEX. At the same time, Brent oil rose from $115.00 to $116.52 per barrel, the highest settlement since September 8, as of 20:43 GMT today on ICE.
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Discussion among Greece and private bondholders about a debt haircut ended in a stalemate. The country offered very low interest rates on its bonds that creditors didn’t wish to accept. The bad outcome of the talks spoiled market sentiment that previously was lifted by speculation that European lawmakers devised plans for battling the debt crisis.

Iran still may disrupt supply of crude, but analysts think that such move is already priced in. Analysts estimated that US inventories of crude oil grew 0.9 million barrels last after falling 3.4 million barrels in the week before. A report from the Energy Information Administration about stockpiles will be released later today.

March futures for delivery of crude oil rose $0.24 to $99.19 per barrel in electronic trading on NYMEX after falling $0.63 to $98.95 yesterday. Brent rose from $110.24 to $110.52 per barrel as of 4:11 GMT today on ICE, following the drop from $110.84 to $110.33 yesterday.
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The International Coffee Organization increased its forecast for the world coffee production by 3.8 million bags from December to 132.4 million bags in the season that started in October. Analysts say that short sellers drive the market now, while buyers perhaps expect prices to fall further.

Greece is talking with private creditors in an attempt to convince them to write off part of the country’s debt. Initially, the talks improved mood of traders, boosting commodities, but the optimism started to wear off as market participants began to doubt success of the discussions.

Coffee price went down from $2.2390 to $2.2000 per pound yesterday on ICE after reaching earlier $2.1785 — the lowest level since January 9.
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Yield on the Italian bonds surged to a record, dampening the optimism caused by the news about Berlusconi’s resignation. The efforts to create a interim unity government in Greece are falling apart as opposing parties are arguing about installation of a new prime minister. There rumors that German Chancellor Angela Merkel proposed to allow members of the EU to exit the shared 17-nation currency.

US crude oil inventories decreased by 1.4 million barrels to 338.1 million barrels last week. Analysts predicted an increase by 700,000 barrels. In other circumstances the unexpected drop could support oil prices, but the present unfavorable conditions imposes a pressure to the downside that is too great to be easily opposed.

Crude oil spot price was $112.26 per barrel today as of 3:15 on ICE, following yesterday’s slump from $115.35 to $112.10 per barrel.
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Greek Prime Minister George Papandreou agreed to step down. The ruling and opposition parties formed a unity government that may deal with the political obstacles on the way to getting new portion of the bailout.

There is a mounting pressure for Italian Prime Minister Silvio Berlusconi to resign as well. Prime Minister’s former spokesman Giuliano Ferrara claimed that Berlusconi will leave the office soon. Berlusconi declined such rumors.

Juergen Stark, member European Central Bank’s Board, said that the sovereign-debt crisis in Europe will be contained in two years.

Crude oil rallied from $112.41 to $114.88 per barrel yesterday and traded today near $114.42 per barrel as of 3:21 GMT on ICE.
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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 concerns about the upcoming referendum in Greece can be easily explained. Most Greek citizens are strongly opposed to the austerity measures required by the rescue plans for Greece and very probable negative vote will likely lead to a default of the European country.

There was another report suggesting about a faltering economic growth in the USA. The Purchasing Managers’ Index of the Institute for Supply Management dropped to 50.8 in October from 51.6 in September. Analysts promised an increase to 52.1. The index is dangerously close to the 50.0 level and a drop below this level would mean that the US manufacturing is starting to decline after 27 consecutive months of expansion.

Gold price rose today to $1,726.20 from $1,726.21 today as of 2:35 GMT on COMEX, following yesterday’s advance from $1,716.80 to $1,721.50. Palladium traded today near $638.0 per ounce after yesterday it dropped from $644.0 to $637.0 per ounce. Copper settlement was down from $3.5540 to $3.5130 per pound on yesterday’s trading session.
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Greece’s new budget has a deficit of 8.5 percent, while the nation promised to cut it to 7.6 percent in order to receive new portion of the bailout funds. Now the European politicians argue about providing the aid for the indebted nation that is likely to fail meet other demands for the bailout. Many economists, as well as politicians, think that Greece may face a default as early as November.

November futures for crude oil delivery dropped $1.59 to $77.61 per barrel on NYMEX, the lowest level since September 28, 2010. Prices declined 15 percent this year. Spot price for Brent crude was $100.69 as of 22:18 GMT today on ICE, falling from $101.91. The drop followed the advance to $102.80 — the intraday high.
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Investors wait for the European officials to agree on the Greece bail-out plan and its implementation. It’s a very important step, as with the failure of Greece or any other eurozone members the global financial climate would severely deteriorate, sending all markets (except several safe haven assets, like the US dollar and the Japanese yen) crumbling.

Cocoa was in an uptrend during the last two days and has now lost a half of its gain. Soybeans haven’t really stopped falling and now demonstrate the strongest decline since Friday. Both these agriculture commodities depend heavily on the state of the global economy. As a considerable part of their recent growth can be attributed to speculative buying, these positions are now getting closed by the traders to cover up losses in more “serious” markets — stocks and bonds.

Cocoa December futures fell from $2,704 to $2,654 per 10 metric tons as of 16:38 GMT on ICE today with an intraday low at $2,630. Soybeans November futures declined from $1,260.50 to $1,238.50 per 5,000 bushels on ECBOT.
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