Wheat drops to 3-year low on demand outlook
Sunday, 6 June 2010
CHICAGO, June 5 (Bloomberg): Wheat fell to a three-year low, corn touched the lowest price since October and soybeans dropped the most in four weeks as slower-than-expected US job growth revived concern that demand for crops will weaken.
The Reuters/Jefferies CRB Index of 19 commodities fell the most in three weeks after the Labor Department said the US added 431,000 jobs in May. Economists expected a 536,000 gain, according to the median forecast in a Bloomberg News survey. The dollar surged to a four-year high against the euro, reducing the appeal of commodities as an alternative investment.
"The disappointing jobs report underscores the global economy still remains soft," which may curb demand for food, livestock feed and biofuel, said Dale Durchholz, the senior market analyst for AgriVisor LLC in Bloomington, Illinois. "The bearish commodity story will end only when the dollar reaches a peak, and that may require coordinated central bank policies."
The Reuters/Jefferies CRB Index of 19 commodities fell the most in three weeks after the Labor Department said the US added 431,000 jobs in May. Economists expected a 536,000 gain, according to the median forecast in a Bloomberg News survey. The dollar surged to a four-year high against the euro, reducing the appeal of commodities as an alternative investment.
"The disappointing jobs report underscores the global economy still remains soft," which may curb demand for food, livestock feed and biofuel, said Dale Durchholz, the senior market analyst for AgriVisor LLC in Bloomington, Illinois. "The bearish commodity story will end only when the dollar reaches a peak, and that may require coordinated central bank policies."