Favorable weather pressures corn, wheat prices

AP News
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Posted: Jun 06, 2011 3:41 PM
Favorable weather pressures corn, wheat prices

Corn and wheat prices fell sharply Monday after favorable weather helped crops in parts of the United States and Europe.

Wheat settled down 3.8 percent, while corn fell 2.9 percent.

Corn prices have more than doubled and wheat prices have risen 72 percent from a year ago because of supply concerns. Corn is in short supply globally and wheat stockpiles have grown tighter after a drought damaged at least a third of Russia's crop last summer and the U.S. winter crop was affected by dry conditions.

In Europe, rain fell last weekend on wheat fields in a region that has been plagued by a drought. "It definitely helped out the summer crops," said Northstar Commodity analyst Jason Ward.

Meanwhile, a few days of sunshine helped farmers in Ohio and Indiana plant corn in fields left soggy by heavy rains.

Ward estimated Ohio farmers have completed planting about 80 percent of the expected corn acreage. That's up from 19 percent completed a week ago. In Indiana, he projected corn planting was about 90 percent complete, compared with 59 percent a week ago.

The two are among the 10 largest states in the U.S. for corn production, which makes the planting season critical because supplies are so short, he said. "Since it's a big year where we need all those acres and the yield with it ... the market pays particular attention to it," Ward said.

Many investors are awaiting a U.S. Agriculture Department report expected Thursday that will update global supply and demand picture for several crops.

In contracts for July delivery, wheat fell 29.75 cents to settle at $7.44 a bushel, corn dropped 22 cents to settle at $7.32 a bushel and soybeans lost 31.25 cents to $13.8325 a bushel.

In other trading, oil fell below $100 a barrel ahead of a key OPEC meeting and an updated outlook on U.S. supply and demand.

The 12-member Organization of Petroleum Exporting Countries is scheduled to meet Wednesday in Vienna to debate whether to boost production to help lower prices. The cartel produces about 40 percent of global crude supplies.

The U.S. Energy Department releases its monthly short-term energy outlook on Tuesday and weekly petroleum inventories on Wednesday. The recent trend has been for rising supplies and falling demand.

Benchmark crude for July delivery fell $1.21 to settle at $99.01 per barrel on the New York Mercantile Exchange.

In other Nymex contracts, heating oil dropped 3.93 cents to settle at $3.0174 per gallon, gasoline fell 4.32 cents to $2.9499 per gallon and natural gas rose 12 cents to $4.827 per 1,000 cubic feet.

Most metals settled higher, including gold and silver.

In July contracts, silver rose 59.1 cents to settle at $36.782 an ounce, copper rose 0.75 cent to $4.142 a pound and platinum fell $2.50 to $1,821.20 an ounce. August gold gained $4.80 to settle at $1,547.20 an ounce and September palladium gained $13.30 to $798.70 an ounce.