June 3, 2008

Grains

Corn closed 1.3-percent lower today, with the July contract settling 7 3/4 cents lower at $6.08 a bushel. Falling energy prices, speculation that a government investigation will change rules regarding commodity trading , and index funds were noted for today's decline. Corn gained 5.8-percent over the prior two sessions.

Net-long positions held by hedge funds and other large speculators in corn futures fell by 2.2 percent, or 7,801 contracts, to 352,320 contracts in the week ended May 27, CFTC data show.

Index traders and swap dealers need to be monitored more closely in the markets, the CFTC said. A change in classification for index traders from commercials to speculators would cause them to adhere to speculative position limits. This is seen as bearish to the market.

Soybeans closed 0.4-percent lower today, with the July contract settling 6 cents, lower at $13.595 a bushel. Bearish news regarding the CFTC was capped by planting delays. July soy-meal settled $4.00 higher at $347.00 per short ton, and July soy-oil settled 66 points lower at 61.04 cents per pound.

Rice closed 5.9-percent higher today, with the July contract settling 31 cents higher at $19.11 per hundredweight. Rice crop conditions rated good-to-excellent fell to 70-percent, from 72-percent the prior week.

July wheat settled 32 cents lower at $7.50 1/2 per bushel, and July oats settled unchanged at $3.78 a bushel.

Softs

Coffee closed 3.7-percent lower with the July contract settling 485 points lower at $1.3250 a pound. Strength in the US dollar, and huge crop estimates from Brazil continue to weigh on prices.

Orange juice climbed to a 3-week high today, with the July contract settling 270 points higher at $1.1120 a pound. Atlantic storm season began June 1st and hurricane fears pushed the market higher today.

Sugar fell to a fresh 8-month low today, with the July contract settling 60 points lower. Strength in the dollar and falling energy prices was noted for today's decline.

Cotton fell to a fresh 10-month low today, with the July contract settling 123 points lower at 64.21 cents a pound. Planting percentage in the US is above last year and sent prices lower on the session.

July ICE cocoa settled $1 lower at $2,789 a metric ton.

Meats

Cattle futures were mixed today, with August feeder cattle settling 7 points higher at $113.77 per hundredweight. Lower corn prices were noted for the rise in feeder cattle today. August live cattle settled 57 points lower at $100.25 per hundredweight.

The U.S. Department of Agriculture's mid-day boxed beef wire reported choice cuts gained $1.45 per hundredweight, while select items were $0.21 per hundredweight higher.

Hogs continued lower today, with June lean hogs settling 30 points lower at 76.02 cents. August pork bellies settled 250 points lower at 75.10 cents a pound.

Metals

Gold closed 1.3-percent lower today, with the August contract settling $11.50 lower at $885.50 an ounce. Bernanke's pro dollar comments sent the dollar higher reducing the appeal of precious metals as a hedge against inflation.

Federal Reserve Chairman Ben Bernanke said the Fed is working with the Treasury to "carefully monitor developments in foreign-exchange markets" and is aware of the effect of the dollar's decline on inflation and price expectations.

July silver settled 7 cents lower at $16.84 an ounce, July platinum settled $17.40 lower at $1,998.20 an ounce, September palladium settled $3.05 lower at $437.05 an ounce, and July copper settled 2.2 cents lower at $3.578 a pound.

Energy

Crude oil closed 2.7-percent lower, with the July contract settling $3.45 lower at $124.31 a barrel. Bernanke's pro-dollar comments sent crude oil to the lowest closing price since May 15.

Natural gas climbed to a 29-month high today, with the July contract settling 25.2 cents higher at $12.221 per million British thermal units. Forecasts for hot weather across much of the Northeast and Midwest next week, and storm fears sent natural higher.

July RBOB gasoline settled 3.82 cents lower at $3.3525 a gallon and July heating oil settled 8.24 cents lower at $3.6396 a gallon.

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