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Corn Price Concerns Increasing

ByGoldMoney News Desk
Published 07/20/2012, 09:11 AM
Updated 05/14/2017, 06:45 AM

Rising commodity prices are back in the news in a big way, with many column inches being devoted in particular to rising crop prices. Corn and soybean prices hit new record highs yesterday, with half the continental US in the grip of the worst draught since 1956. The US Department of Agriculture cut its estimate of the size of the corn crop by 12%. Nymex crude oil and gasoline futures also had another strong session, with WTI gaining $3 to settle at $92 a barrel, while gasoline continues what has been a relentless march higher since the start of this month.

Interestingly, a report yesterday from the US Energy Information Administration reported American gasoline use as being at a 13-year low for July! Imagine what the price would be if the Fed had started another round of quantitative easing. The continuing tensions surrounding Iran and Syria are not helping as far as crude oil and gasoline shorts are concerned.

Precious metals had another quiet day yesterday, palladium being the standout performer, gaining around $7 (1.2%). Strength across the commodity sector is supporting precious metals, with gold receiving good support on dips towards $1,550, while silver appears to have decent support at $26.

It was also reported that the Conference Board Leading Economic Index® for the US declined 0.3% in June to 95.6 (2004 = 100), following a 0.4% increase in May, and a 0.1% decline in April. Jobless claims were also reported as higher, while existing home sales fell, as did an index of manufacturing activity in the Mid-Atlantic states. Rising food and energy prices and a struggling economy: not a happy recipe.

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