Corn, cocoa prices rise on weather concerns

AP News
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Posted: Jan 24, 2012 3:46 PM
Corn, cocoa prices rise on weather concerns

A stretch of dry weather on two continents sent corn and cocoa prices higher Tuesday.

Investors are concerned that the weather problems will lead to smaller harvests of corn in Argentina and cocoa in the Ivory Coast.

Argentina, one of the world's biggest corn exporters, has been coping with dry weather for weeks. Recent rainfalls have done little to ease damage, Barclays Capital analysts stated in an email.

Hot weather also is baking the Ivory Coast, a major global producer of cocoa. "They're looking for rain and the crop is getting exhausted by heat," said Spencer Patton, founder of the hedge fund Steel Vine Investments LLC.

Corn for March delivery rose for a fourth straight day Tuesday, ending up 10.25 cents at $6.3025 per bushel. March cocoa increased $144, or 6.3 percent, to finish at $2,413 per metric ton.

Other commodities were mixed as talks continued over the best way to reduce Greece's massive debt burden. The marathon negotiations are between the finance ministers of countries that use the euro currency and private creditors such as banks and investment firms that hold Greek government bonds.

Investors are worried that a deal may not be reached, which could threaten the broader European economy.

Gold for February delivery fell $13.80 to end at $1,664.50 an ounce and March silver fell 29.5 cents to $31.975 per ounce.

March copper rose 0.9 cent to finish at $3.8075 per pound, April platinum declined $8.70 to $1,552.40 an ounce and March palladium fell $8.30 to $680.55 per ounce.

In energy trading, natural gas futures moved off their 10-year lows as production was trimmed and colder weather increased demand. Natural gas rose 2.1 cents to end at $2.601 per 1,000 cubic feet.

Benchmark crude fell 63 cents to end at $98.95 per barrel on the New York Mercantile Exchange. Heating oil rose 1.16 cents to at $3.0151 per gallon and gasoline futures increased 2.49 cents to $2.8105 per gallon.

Other March agriculture contracts rose. Wheat increased 13.75 cents to end at $6.335 per bushel and soybeans ended up 2.5 cents at $12.20 per bushel.