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29 July 2024

News

05.03.2010

Commodities prices decline on stronger dollar

Grain prices led a broad pullback in commodities Thursday as investors reacted to a rising dollar by pulling money out of futures. Improving weather forecasts for growing areas in the U.S. and South America added to the drop in agricultural futures. Prices for grains, soybeans and corns, metals and energy all closed lower. They followed their pattern of moving in an opposite direction from the dollar. And the dollar was lifted by continuing concerns about Greece’s ability to manage its debt problems. The ICE Futures US dollar index, which measures the dollar against six other currencies, rose 0.5 percent. Greece was able to raise badly needed cash by selling billions of dollars in bonds Thursday. Demand was strong, but the country was forced to pay a high yield of 6.3 percent. That puts pressure on the Greek government to accelerate its economic reform plans. The continuing uncertainty sent the euro lower against the dollar. There’s still some uneasiness in the markets about debt problems in other European countries including Spain. And the dollar benefits when the economic news turns negative because it’s seen as a safer bet than commodities. Futures are also hurt by the fact that commodities are priced in dollars and become more expensive to overseas buyers as the dollar climbs. More upbeat forecasts for Midwestern and South American weather also sent grain prices lower, analysts said. «It does not look as it’s going to be quite as wet next week in the Midwest and that relieves some fears about too much rain as we go into spring planting season,» analyst Vic Lespinasse with grainanalyst.com said. Investors were also concerned that rainy weather might damage soybeans and corn in Brazil but the outlook now calls for better weather, Northstar Commodity analyst Jason Ward said. «Wet weather down there has been plaguing their harvest so this drier outlook that you’re getting for them is going to get their harvest back going,» he said. «You’re seeing that soybean market take it on the chin as a result of that better forecast.» Wheat for May delivery fell 13.5 cents to settle at $5.0225 a bushel. Corn for May delivery fell 3.75 cents to $3.83 a bushel and May soybeans fell 21.5 cents to close at $9.42 a bushel. In metals trading, April gold fell $10.20 to $1,133.10 an ounce while silver for May delivery declined 15.3 cents to $17.176 an ounce. Copper for May delivery fell 5.95 cents to $3.375 a pound. Natural gas prices fell nearly 4 percent after the government’s Energy Information Administration said supplies fell less than expected last week. The natural gas contract for April delivery lost 18.2 cents, nearly 4 percent, to settle at $4.575 per 1,000 cubic feet on the New York Mercantile Exchange. Benchmark crude for April delivery fell 66 cents to settle at $80.21 on the Nymex as the U. S. Dollar Index gained 0.83 percent. In other Nymex trading in April contracts, heating oil fell 2.5 cents to settle at $2.0687 a gallon, and gasoline lost 1.39 cents to settle at $2.2337 a gallon. In London, Brent crude gave up 48 at $78.77 on the ICE futures exchange.

Agro Perspectiva




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