Grain Prices Lead Commodities Lower on Fears of Bigger Gluts
Commodity markets may be giving the Federal Reserve one less inflation worry.
Grain futures tumbled Monday, and cotton and pork markets also slid as the prospects of poor demand and large supplies put commodity prices under new pressure.
The Commodity Research Bureau index of 17 key commodity futures fell 1.3% to 186.24, heading back toward February lows after a recent rally.
Demand from Asia for grain, meat, metal and other raw materials has been muted for almost two years, and supply problems continue to plague commodity prices worldwide.
On Monday, the outlook for big U.S. crops this year in the face of only routine world demand prompted waves of selling. July corn futures fell 6.75 cents to $2.118 a bushel, and July soybeans lost 6.75 cents to $4.55 a bushel.
A wet, cold spring in the Midwest had sparked concern that grain sowings might be reduced. But with small windows of good weather, farmers have planted at stunning speed.
Their production will only add to burdensome stockpiles in the United States, given an absence of crop problems elsewhere in the world.
At the Chicago Mercantile Exchange, pork markets also fell sharply in reaction to swollen supplies. Friday’s monthly report on stocks of pork in refrigerated warehouses showed a record 593.5 million pounds at the end of April.
