Corn prices plunge on weak export sales, weather

AP News
Posted: May 24, 2012 4:33 PM
Corn prices plunge on weak export sales, weather

Corn prices dropped 4 percent Thursday because of weak export sales and improving weather in parts of the Corn Belt.

Corn for July delivery fell 25 cents to end at $5.785 per bushel, its lowest price since mid-December.

The U.S. Agriculture Department said that export sales totaled 482,000 metric tons last week. Investors had expected export sales to range between 900,000 metric tons and 2 million metric tons, Mike Zuzolo, president of Global Commodity Analytics & Consulting LLC, stated in an email.

In addition, rain has been falling in the western region of the Corn Belt, which is expected to ease some of the dry conditions there.

Investors are worried about the prospect of weaker demand for corn because of slower economic growth in China, a huge importer of commodities. In addition, there are concerns about the impact that Europe's financial crisis may have on the global economy.

European leaders could not reach agreement on ways to solve their debt crisis during a summit that ended Thursday. Seven countries that use the euro as currency are in recession, including Italy and Spain. A June election in Greece may result in that country leaving the group of countries that use the euro.

That has pressured the corn market because U.S. farmers have planted one of the largest crops in decades. The government is predicting a record harvest this fall, although it still is early in the growing season and many factors, including weather, could affect production.

Other commodity prices have been volatile, too, because of the uncertainty about what is ahead for the global economy.

In July contracts, wheat fell 2.5 cents to end at $6.63 per bushel and soybeans rose 13.5 cents to $13.76 per bushel.

Gold for June delivery rose $9.10 to finish at $1,557.50 an ounce, snapping a three-day losing streak. July silver increased 63.8 cents to $28.157 per ounce.

Industrial metals were mixed. July copper climbed 3.25 cents to end at $3.4285 per pound, July platinum gained $8.30 to $1,422.40 an ounce and June palladium fell $3.60 to $587.50 per ounce.

Benchmark oil rose 76 cents to finish at $90.66 per barrel in New York. Heating oil rose 0.98 cent to $2.8219 per gallon, gasoline futures increased 0.42 cent to $2.8765 per gallon and natural gas fell 9 cents to $2.647 per 1,000 cubic feet.