Posted on 03/31/2008 2:49:48 PM PDT by kiriath_jearim
NEW YORK (AP) - Commodities prices fell in a broad sell-off Monday as profit-taking on the last day of the quarter and a bearish U.S. agriculture report battered everything from precious metals to grains and energy futures.
Relentless global demand for agricultural coupled with dwindling world stockpiles has exacerbated the supply crunch for wheat, soybeans and corn, which have spiked to historic levels in the past year.
Hoping to capitalize on the boom, U.S. farmers are expected to plant about 75 million acres of soybeans and nearly 64 million acres of wheat in 2008, year-to-year increases of 18 percent and 5.5 percent, respectively, the U.S. Department of Agriculture said in its annual planting report.
"It's a very big planting, a lot higher than last year," said Elaine Kub, analyst with DTN in Omaha, Neb. "It's very profitable for farmers to put any land they have into production, no matter what they put into it, so they're planting whatever they can."
The report at least temporarily eased supply concerns for wheat and soybeans, sending prices plummeting the maxium-allow limit in Chicago. Soybeans for May delivery dropped 70 cents to $11.9725 a bushel on the Chicago Board of Trade, its lowest level in three months. Wheat fell to a two-month low, losing 60 cents to $9.29 a bushel on the CBOT.
"A lot of investors are liquidating their long positions (in soybeans and wheat) because this report was even more bearish than expected," Kub said.
Meanwhile, corn prices rose Monday—virtually alone among major commodities—after the USDA predicted farmers will plant 86 million acres of corn in 2008, an 8 percent drop from last year. Corn prices added 9.25 cents to $5.6975 a bushel on the CBOT.
In precious metals, gold, silver and copper prices fell sharply as investors locked in profits on the last day of the quarter.
Gold for April delivery lost $13.20 to $917.40 an ounce on the New York Mercantile Exchange. The April contract is set to expire Tuesday, adding to the trading volatility. May silver shed 69.5 cent to $17.245 an ounce, while May copper lost 0.5 cent to $3.8265 a pound on the Nymex.
"It's the quarter end and we've seen a lot of liquidation and profit- taking since last week," said Robin Bahr, analyst with UBS in London. "It's basically sit back and see what the new quarter brings, because there's expectations that there will be new managed money coming into the commodities markets."
In energy futures, crude oil extended its losses Monday, joining the overall sell-off in commodities. In addition, news that a bombed Iraqi oil pipeline has resumed exports eased supply concerns and added to the downward pressure on crude.
Light, sweet crude for May delivery dropped $3.64 to fetch $101.98 a barrel on the Nymex.
Other energy futures also fell. April gasoline futures dropped 8.3 cents to $2.6340 a gallon on the Nymex, while April heating oil futures slipped 3.85 cents to $3.0665 a gallon.
I always wondered. Why is it called light SWEET crude? Does it taste/smell better than the other stuff or what?
IMHO the higher prices of commodities has had nothing to do with actual availability, just speculation.
I do hope some of those whose greed has overrun their judgement get a lesson in why greed isn't good.
sweet crude has less sulfer and is easier to refine....
I believe it has a lower sulphur content, making it easier to refine.
Easier to refine to gasoline.
“IMHO it has been the futures trading that has exacerbated the higher costs of every commodity traded.
IMHO the higher prices of commodities has had nothing to do with actual availability, just speculation.
I do hope some of those whose greed has overrun their judgement get a lesson in why greed isn’t good.”
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I found it interesting that commodities prices often jump or fall depending on the current rumors of the trading day. For example, soybean prices go up because of rumors that dockworkers in Brazil may go on strike. When the rumors prove to be unfounded, the prices go back to normal for the next trading day.
I’ve heard others say it was easier to refine.
All the winter rye I’ve seen here in central NC is juicy and dark green.
Petroleum is considered "sweet" if it contains less than 0.5% sulfur, compared to a higher level of sulfur in sour crude oil.
Light Crude are crude oils with an API gravity of 36 degrees or greater. Light crude oil produces a higher percentage of lighter, higher priced premium products.
Intermediate Crude are crude oils with an API greater than 18 and less than 36 degrees are referred to as intermediate.
Heavy Crude are crude oils with API gravity of 18 degrees or less is characterized as heavy. The oil is viscous and resistant to flow, and tends to have a lower proportion of volatile components.
It goes really well with pork bellies.
>>Gold for April delivery lost $13.20 to $917.40 an ounce<<
Is that not in the range of over an 8% drop in a few weeks?
“>>Gold for April delivery lost $13.20 to $917.40 an ounce<<
Is that not in the range of over an 8% drop in a few weeks?”
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It seems so. I don’t know if that’s normal for the time frame, or if gold will slowly go down to something like $500 per ounce.
Gold peaked at 1038.60 so would represent larger than an 11% decline. Silver has fared any worse peaking at 21.44 and now at 17.28 or about a 20% decline in about 2 weeks.
Commodities prices fell in a broad sell-off Monday as profit-taking on the last day of the quarter and a bearish U.S. agriculture report battered everything from precious metals to grains and energy futures. Relentless global demand for agricultural coupled with dwindling world stockpiles has exacerbated the supply crunch for wheat, soybeans and corn, which have spiked to historic levels in the past year. Hoping to capitalize on the boom, U.S. farmers are expected to plant about 75 million acres of soybeans and nearly 64 million acres of wheat in 2008, year-to-year increases of 18 percent and 5.5 percent, respectively, the U.S. Department of Agriculture said in its annual planting report.
Minianville just posted that they thought it could “correct” to $700.
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