Crop prices jump on hot weather in South America

AP News
Posted: Dec 27, 2011 4:07 PM
Crop prices jump on hot weather in South America

Crop prices rose sharply Tuesday on worries that unusually dry weather in South America could cut global supplies.

Temperatures rose last week in South America and rains that fell over the weekend were lighter than had been expected. The dryness could leave corn plants there stunted because they are pollinating this time of year.

Traders are worried that lower exports from Brazil and Argentina could reduce world food supplies. Strong demand from livestock producers and ethanol makers has already drawn down global reserves of corn and soybeans.

Crop prices had been falling this winter on expectations that exports from the United Sates could help supply the global market. A hot summer didn't damage the U.S. corn crop as severely as some traders had expected. But gains from the U.S. Farm Belt could be offset by losses in South America if dry weather there leads to lower crop yields.

January soybeans rose 37 cents Tuesday to $12.095 per bushel. March wheat rose 22.75 cents to finish at $6.4475 per bushel. March corn rose 13.75 cents to $6.3325 per bushel.

In other trading, Precious metals fell. Gold closed below $1,600 an ounce for the first time in a week.

Gold for February delivery fell $10.50 to end at $1,595.50 an ounce. March silver lost 34.4 cents to end at $29.74 an ounce.

Copper for March delivery fell 6.05 cents to $3.409 per pound. March palladium gained 35 cents to $666.60 an ounce. January platinum gained $4.40 to $1,433.90 an ounce.

Benchmark crude oil rose $1.66 to finish at $101.34 per barrel on the New York Mercantile Exchange. Heating oil gained 1.64 cents to end at $2.9159 per gallon, gasoline futures rose 0.29 cents to $2.681 per gallon and natural gas lost 0.2 cents to $3.112 per 1,000 cubic feet.