US agriculture futures advance on bargain buying
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NEW YORK: Agriculture futures traded broadly higher Wednesday as the previous day's declines attracted new buyers to hard assets like wheat, corn and soybeans.
Other commodities traded mostly lower Wednesday, with gold, crude oil, copper and rice futures all falling.
Agriculture futures mostly fell on Tuesday after Federal Reserve Chairman Ben Bernanke signaled an end to the central bank's interest rate cutting cycle, comments that boosted the dollar and sparked a sell-off in the commodities complex. A stronger dollar encourages investors to sell commodities, which are often traded as inflation hedges.
Also weighing on prices was a disclosure Tuesday by the Commodities Futures Trading Commission that it will investigate possible price manipulation of cotton futures, following a similar probe into energy markets.
"Yesterday was a really shaky day because of the CFTC statements but it didn't have long-lasting effects. We're seeing some renewed confidence in the market," said Elaine Kub, analyst with DTN in Omaha.
Today in Business with Reuters
Soybean futures for July delivery added 29.5 cents to settle at $13.89 a bushel on the Chicago Board of Trade, after earlier trading as high as $13.96 a bushel.
Other agriculture futures also rose Wednesday. Wheat for July delivery rose 2.5 cents to settle at $7.53 a bushel on the CBOT, while corn for July delivery gained 6.5 cents to settle at $6.145 a bushel.
Meanwhile, rough rice futures for July delivery fell 50 cents to settle at $18.61 per 100 pounds.
In energy markets, oil futures fell below $123 Wednesday after the Energy Department said gasoline demand dropped sharply last week while fuel inventories jumped more than expected. The department's Energy Information Administration said demand for gasoline fell by 1.4 percent over the last four weeks. Gasoline inventories rose by 2.9 million barrels last week, more than three times the increase analysts polled by energy research firm Platts had expected.
Light, sweet crude for July delivery fell $2.01 to settle at $122.30 barrel on the New York Mercantile Exchange after earlier falling as low as $121.84. It was oil's lowest settlement since May 6.
Other energy futures also fell Wednesday. July gasoline futures dropped 15.74 cents to settle at $3.1951 a gallon on the Nymex, while July heating oil futures fell 9.38 cents to settle at $3.5458 a gallon.
In precious metals, gold futures fell slightly Wednesday after the dollar strengthened, diminishing the metal's appeal as an inflation hedge.
Gold for July delivery fell $1.70 to settle at $879.90 an ounce on the Nymex, after earlier falling as low as $876 an ounce.
Other precious metals traded mixed. July silver futures rose 10.5 cents to settle at $16.94 an ounce, while July copper fell 3.3 cents to settle at $3.545 a pound.
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