May 20, 2008

Metals

Gold climbed to a 4-week high, with the June contract settling $14.40 higher at $920.20 an ounce. Weakness in the U.S. dollar and soaring energy prices increases the appeal of precious metals as a hedge against inflation.

U.S. producer prices, excluding food and energy, rose more than analysts expected in April. Food costs last month jumped the most in 18 years, increasing worries over inflation.

The U.S. dollar fell as much as 1.1-percent against the euro on speculation the European Central Bank will keep interest rates unchanged on bullish GDP numbers out of Germany.

July silver settled 7 cents higher at $17.03 an ounce, July copper settled 5 cents lower at $3.78 a pound, July platinum settled $26.20 higher at $2,158.20 an ounce, and June palladium settled $1.95 lower at $451.35 an ounce.

Energy

Crude oil closed at a fresh all-time high, with the June contract settling $2.02 cents higher at $129.07 a barrel. Falling value of the U.S. dollar, bullish predictions from Boone Pickens and many Wall Street firms continue to send crude higher.

The US EIA reported last week that U.S. crude oil inventories rose by 200,000 barrels in the week ending May 9. The build in inventories was less than analysts' expectations of a gain of 2.25 million barrels.

June RBOB gasoline settled 6 cents higher at $3.30 a gallon, June heating oil settled 9 cents lower at $3.775 a gallon and June natural gas settled 42 cents higher at $11.37 per million British thermal units.

Grains

Corn futures closed .5-percent higher, with the July contract settling 3 cents higher at $5.8975 a bushel. Concerns that planting delays and slow emergence of the corn crop in the U.S. Midwest will result in smaller yields sending corn higher on the session.

Soybeans settled modestly lower with the July contract settling 1 1/2 cents lower at $13.31 1/2 a bushel. A halt to the farmers strike in Argentina was noted for much of today's retreat from early gains.

Argentine farmers will halt protests tomorrow in an effort to encourage the government and farmers to resolve the dispute over higher export taxes that have led to a nationwide strike. Any disruption of Argentine exports increases demand of U.S. crops.

Soybean processing in Argentina declined 50-percent in March as farmers withheld supplies during a three-week strike. Demand for U.S. soybeans, typically shifts to South America this time of the year.

July wheat settled 7 cents lower at $7.84 per bushel, July rice settled 3 cents higher at $20.33 per hundredweight, and July oats settled unchanged at $3.94 a bushel. July soy-meal settled $5.30 lower at $333.50 per short ton, and July soy-oil settled 83 points higher at 61.03 cents per pound.

Softs

Orange juice futures fell to a seven-week low today with the July contract settling 65 points lower at $1.0702 a gallon. Climbing inventories and favorable weather in Florida's citrus belt continues to squeeze orange juice futures.

Florida harvested 6.3 million 90-pound boxes of oranges in the week to Sunday, up from 6.0 million the previous week, the U.S. Agriculture Department reported.

Sugar fell to a 5-month low with the July contract settling 23 points lower at 10.56 cents a pound. Record sugar harvest in Brazil, the world's largest producer, continues to pressure sugar lower on expectations for rising global supplies.

July cotton settled 104 points lower at 70.77 cents a pound, July coffee settled 160 points higher at $1.3680 a pound, and July cocoa settled $8 lower at $2,603 a metric ton.

Meats

Hogs were higher today, with July pork bellies settling 10 points higher at $77.15 per hundredweight. Strong demand and weakness in the U.S. dollar increases demand on U.S. meats. July lean hogs settled 35 points higher at 76.45 cents a pound.

U.S. exported 361.7 million pounds of pork in March, gaining 37-percent from a year earlier. U.S. packers slaughtered 1.65 million hogs through Thursday last week, up 7.3-percent from a year earlier, the USDA estimated.

Cattle futures closed higher today, with August live cattle settling 62 points higher at 98.525 cents a pound, and August feeder cattle settled 192 points higher at 113.675 cents a pound.

The U.S. Department of Agriculture's mid-day boxed beef wire reported choice cuts gained $0.03 per hundredweight, while select items were $0.77 per hundredweight higher.

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