Unlike bacon, eggs, and toast, all of which have been on the rise as a result of this year’s drought, coffee, cocoa, orange juice and sugar have all fallen in price this month.
Coffee and cocoa fell on fears that the European debt crisis will lower European demand for these two commodities. Orange Juice has dropped on estimates orange juice production will be larger than last year's. Sugar has fallen on expectations Brazil’s sugar crop will be large.
Corn Pulls Grains Higher
Corn moved higher Thursday morning after a bullish crop report showed ending stockpiles of corn would be much lower than expected with a USDA estimate of 619 million bushels versus 648 million bushels expected by analysts.
In addition to lower ending corn stock piles, the USDA estimated the average yield for corn would only be 122 bushels per acre. Estimates for soybean ending stockpiles also was lower than expected with the USDA estimating 130 million bushels being left over versus 134 million bushels by analysts.
However, it was corn prices that influenced most of the trade Thursday with its estimates of ending stockpiles being 4.5 percent lower than expected versus beans 3 percent.
As of midday Friday, corn for December delivery was at $7.54 per bushel, up 6.25 cents (0.8 percent) on the week.
As a result of this year’s climb in soybean prices (up more than 25 percent this year), South American farmers are hoping to capitalize on high prices by increasing planting of soybeans. If estimates hold true, Brazil will surpass the United States as the largest producer of Soybeans in the world.
Nat Gas Rises to High of the Year
Improving economic conditions, the coming winter and fears that Tropical Storm Patty could disrupt natural gas supplies have driven natural gas prices up to a high of the year. Natural gas, which is used to provide heating to millions of American households each year, may put a pinch to American family’s pocket books this year.
As of midday Friday, natural gas for November delivery was at $3.58 per million BTU, up 18.2 cents (5.4 percent) on the week.