Soft Commodities Price Watch: Agricultural Futures Succumb to Stimulus Fears

By: Deyana Ivanova
Deyana Ivanova
Deyana has a media background as a Journalism graduate. With a general interest in the financial markets and global… read more.
on Jun 20, 2013

Soft commodities fell sharply today, June 20, after comments by Federal Reserve Chairman Ben Bernanke sent the U.S. dollar higher.

Bernanke said yesterday that the U.S. central bank could begin slowing asset purchases by the end of 2013 and wind them down completely by the middle of 2014 if the economy picks up as expected. Following Bernanke’s statement, the U.S. dollar index extended its previous day’s gains to the highest level since June 10. The stronger greenback reduced the appeal of dollar-denominated commodities to overseas buyers and made raw materials less attractive as an alternative investment.

**Grains Post Declines, with Soybeans and Corn Leading the Pack**

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All grain futures fell, with the soybean price the biggest decliner. As of 16:00 GMT, soybeans for delivery in November on the Chicago Board of Trade (CBOT) traded at $12.9250 a bushel, down 1.39 percent on the day. Soybeans for July delivery posted a smaller decline of 0.6 percent. The front-month contract held in a range between a daily low of $15.1188 and a session high of $15.2188 a bushel.

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Continuing its slump from the previous day, the corn price followed soybeans in their steep fall. CBOT corn for December delivery was 1.27 percent down at $5.6325 a bushel, after reaching an 11-week high on Tuesday, June 18.

Elsewhere on the CBOT, the wheat price for September delivery fell 1.19 percent to $7.0575 a bushel, while the front-month contract traded at $6.9663 a bushel, down 1.4 percent on the day. Oats and rough rice were also down, with losses of 0.96 and 0.49 percent respectively.
**Cocoa, Coffee and Sugar Major Fallers**
!m[ICE cocoa for delivery in September shed 2.53 percent to $2,160 a tonne.](/uploads/story/3266/thumbs/pic_1_inline.jpg)

Agricultural futures on the ICE Futures U.S. Exchange also came under pressure. The sugar price for October delivery was 2.31 percent down at $0.1689 a pound, while the July contract declined 1.85 percent, trading at $0.1662 a pound. Earlier in the day, front-month sugar fell by as much as three percent to a session low of $0.1643 a pound, the lowest level since June 14. Sugar prices fell to a three-year low of $0.1617 a pound on June 13, as farmers in Brazil, the world’s largest producer and exporter of the commodity, started to accelerate sugar cane harvesting.
In London, white, or refined, sugar for August delivery fell 1.4 percent to $489 a tonne on NYSE Liffe. Robusta coffee for September delivery retreated 1.4 percent to $1,770 a tonne, while the September cocoa price declined 0.3 percent to 1,444 pounds a tonne.
ICE cocoa for delivery in September shed 2.53 percent to $2,160 a tonne. Arabica coffee for September delivery traded at $1.2100 a pound, down 2.69 percent on the day, surpassing the commodity’s three-year low of $1.2117 a pound, reached on June 12. The coffee market has been under heavy selling pressure in recent weeks as traders expect a huge harvest in top producer Brazil.
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