Corn Advances on Hot Weather, Oil Falls: Commodities at Close

The Standard & Poor’s GSCI gauge of 24 commodities rose 0.7 percent to 567.6 at 4:49 p.m. in New York after corn and soybeans gained on speculation that dry weather will reduce yields in the U.S.

The UBS Bloomberg CMCI index of 26 raw materials rose 1.2 percent to 1427.014.

GRAINS, OILSEEDS

Corn gained the most in almost two years and soybeans jumped to a five-week high on speculation that unusually hot, dry weather will reduce yields in the U.S., the world’s biggest producer of both crops.

Dry weather during the next 10 days and intensifying heat will increase plant stress in the U.S., where 57 percent of projected production areas have been drier than usual in the past 30 days compared with about 10 percent a year earlier, T- Storm Weather LLC said in a report. June is expected to be the driest since 1988. Corn is beginning to reproduce, the most critical time for moisture.

Less than 10 percent of the normal amount of rain fell in parts of Iowa and Illinois, the biggest U.S. producers of corn and soybeans, in the past month, National Weather Service data show. The hot, dry weather may curb corn production that was forecast to be a record 14.8 billion bushels after U.S. growers planted 95.9 million acres, the most since 1937.

Corn futures for December delivery surged the exchange limit of 40 cents, or 7.2 percent, to settle at $5.94 a bushelon the Chicago Board of Trade, the biggest gain since June 30, 2010.

Soybean futures for November delivery rose 3.6 percent to $14.255 a bushel in Chicago. Earlier, the price touched $14.37, the highest since May 18.

Wheat futures for September delivery climbed 7.8 percent to $7.41 a bushel in Chicago, the most since March 30. The most- active contract has gained 14 percent this year.

CRUDE OIL

Oil fell below $80 a barrel for a third day in New York on concern that a meeting of European Union leaders this week will fail to check the region’s debt crisis, leading to a reduction in fuel demand.

Futures dropped 0.7 percent as George Soros warned that a failure by EU leaders to produce drastic measures may spell the demise of the bloc’s shared currency. Crude climbed earlier as oil and gas installations in the Gulf of Mexico were shut because of Tropical Storm Debby. Prices slid as the storm moved toward Florida and away from energy fields.

Oil for August delivery declined 55 cents to settle at $79.21 a barrel on the New York Mercantile Exchange. Futures are down 20 percent this year. Prices have fallen 23 percent since the end of March, heading for the biggest quarterly decline since the final three months of 2008.

Brent oil for August settlement rose 3 cents to end the session at $91.01 a barrel on the London-based ICE Futures Europe exchange. The European benchmark’s premium to West Texas Intermediate, the crude grade traded in New York, was at $11.80, up from $11.22 on June 22.

OIL PRODUCTS

Gasoline surged the most in six months on speculation that refinery closures in North America and Europe will make summer- blend gasoline inventories tight along the U.S. East Coast.

Futures rose 3 percent after the U.K.’s Coryton refinery stopped operating, at least the sixth European plant to close since the start of 2011. Hovensa LLC’s St. Croix refinery in the U.S. Virgin Islands is shut and Monroe Energy LLC isn’t expected to open the idled Trainer, Pennsylvania, refinery in time for the summer driving season.

July-delivery gasoline rose 7.59 cents, to settle at $2.6458 a gallon on the Nymex, the biggest gain since Dec. 20. The premium to the August contract widened 4.53 cents to 14.76 cents, the most since Aug. 31.

Sunoco Inc. shut a vacuum tower associated with the 137 crude unit for repairs at the 355,000-barrel-a-day Philadelphia refinery on June 20, a notice to city regulators shows.

The closing of Coryton and other plants in Europe has reduced imports into New York Harbor, the delivery point for the Nymex futures contract. U.S. East Coast gasoline imports have averaged 612,000 barrels a day so far this year, down from 789,000 barrels a day during the same period in 2011.

PRECIOUS METALS

Gold futures gained the most in three weeks as European debt concerns mounted, spurring demand for the metal as a hedge.

Failure by leaders at this week’s summit to come up with measures to shore up the weakest countries’ finances may be “fatal” for the euro, billionaire investor George Soros said yesterday, while German Chancellor Angela Merkel rejected joint euro-area bonds or bills. Holdings in exchange-traded products backed by gold approached a record high.

Gold futures for August delivery advanced 1.4 percent to settle at $1,588.40 an ounce on the Comex in New York, the biggest gain for a most-active contract since June 1.

Silver futures for September delivery climbed 3.2 percent to $27.587 an ounce, the biggest gain since June 6.

On the Nymex, platinum futures for October delivery rose 0.5 percent to $1,442.70 an ounce, ending a six-session slide. Palladium futures for September delivery gained 5 cents to $607.25 an ounce.

SOFT COMMODITIES

Coffee futures rose on supply concerns in Brazil, the world’s top producer and exporter. Sugar also gained.

Brazil’s National Coffee Council, a group that represents producers, said on June 22 that heavy rain is hurting the crop and the quality of the beans, possibly curbing exports and domestic sales.

Arabica coffee for September delivery increased 1.8 percent to settle at $1.5875 a pound on ICE Futures U.S. in New York. The price climbed 2.6 percent last week.

Raw-sugar futures for October delivery rose 0.9 percent to 19.93 cents a pound in New York. On June 22, the price plunged 5 percent, the most in five months.

Cocoa futures for September delivery were unchanged at $2,102 a metric ton.

In London futures trading, robusta coffee slid, and refined sugar gained on NYSE Liffe. Cocoa was unchanged.

NATURAL GAS

Natural gas rose to a one-month high in New York as production shutdowns in the Gulf of Mexico caused by Tropical Storm Debby limited supplies.

The futures gained 2.6 percent as about 35 percent of gas output in the Gulf was shut as of 12:30 p.m., up from 23 percent yesterday, the U.S. Bureau of Safety and Environmental Enforcement said. Demand may rise from power plants in the Midwest because of a heat wave this week, according to National Weather Service forecasts.

Natural gas for July delivery gained 6.9 cents to $2.694 per million British thermal units on the Nymex, the highest settlement price since May 23. The futures have advanced 42 percent since dropping to a 10-year low of $1.902 on April 19.

LIVESTOCK

Cattle futures declined to a six-week low on signs of increasing animal supplies amid dwindling demand. Hog prices declined to the lowest this month.

Feedlots bought 15 percent more cattle last month than in May 2011, the U.S. Department of Agriculture said in a report after the close of regular trading on June 22. Fourteen analysts in a Bloomberg survey forecast a gain of 12 percent, on average. Feedlots sold about 2.015 million animals to meatpackers in May, up 0.6 percent from a year earlier. Analysts projected a 4.4 percent increase.

Cattle futures for August delivery fell 0.9 percent to settle at $1.15875 a pound on the Chicago Mercantile Exchange. Earlier, the price touched $1.15725, the lowest for a most- active contract since May 10. The commodity has fallen 4.6 percent this year.

Feeder-cattle futures for August settlement tumbled by the exchange limit of 3 cents, or 2 percent, to settle at $1.498 a pound. That’s the lowest since April 11.

Hog futures for August settlement declined 2.4 percent to settle at 89.15 cents a pound. Prices reached 88.95 cents after the close of regular trading, the lowest since May 31. The commodity has climbed 5.8 percent this year.

Pork stockpiles in the U.S. surged 16 percent at the end of May from a year earlier to the highest ever for the date, the USDA said in a separate report on June 22.

BASE METALS

Copper rose for the second straight session in New York as new-home sales in the U.S. reached a two-year high, signaling prospects for higher metal demand.

Home purchases climbed to a 369,000 annual rate last month, the most since April 2010 and above the 347,000 median estimate in a Bloomberg survey of economists. The number of houses on the market held close to a record low. The Copper Development Association says construction generates about 40 percent of demand for the metal used in pipes and wiring.

Copper futures for September delivery gained 0.3 percent to settle at $3.3325 a pound on the Comex in New York. On June 22, the price climbed 0.3 percent.

Aluminum and zinc rose in London, while nickel, tin and lead fell.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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