SALON

Wednesday, Dec 19, 2012 9:00 PM UTC

Corn drops as ethanol fuel inventories increase

By

Topics: From the Wires,

An increase in ethanol inventories has sent the price of corn to its lowest level since July.

Corn for March delivery fell 17 cents to finish at $7.03 a bushel Wednesday. That’s the lowest since July 6, just about the time that last summer’s record-setting drought began pushing corn prices to all-time highs.

The Energy Department reported that fuel ethanol supplies rose 4 percent to 20.8 million barrels last week. That’s up 18 percent more than a year ago.

Corn is a key ingredient in the process of manufacturing ethanol vehicle fuel. The increase in supplies indicates that demand could slow, said Sterling Smith, a futures specialist with Citibank Institutional Client Group.

Wheat for March delivery fell 5.5 cents to end at $8.0575 a bushel and January soybeans dropped 2.9 cents to $14.37 a bushel.

In other trading, orange juice futures rose on persistent worries that a freeze could damage Florida’s crop. The U.S. Agriculture Department has predicted that Florida’s production of early, midseason and Navel varieties will total 67 million boxes, which would be down 10 percent from last season.

Spencer Patton, founder and chief investment officer of Steel Vine Investments LLC, said he isn’t sure the steady price increases can be sustained. “I think at some point this is going to have to slow down a little bit,” Patton said.

Frozen orange juice concentrate for January delivery rose 1.95 cents to end at $1.4150 per pound. The price has risen about 14 percent since Dec. 4.

Other commodities were mixed as U.S. budget negotiations appeared to hit a wall less than two weeks before tax hikes and government spending cuts are set to take effect.

President Barack Obama said he and House Speaker John Boehner were “pretty close” to a deal. His comments came shortly after the White House threatened to veto Boehner’s backup plan for averting the “fiscal cliff.”

Gold for February delivery fell $3 to finish at $1,667.70 an ounce. In March contracts, silver fell 55.3 cents to $31.116 an ounce, copper fell 4.8 cents to $3.6055 a pound and palladium rose $7.40 to $698.35 an ounce. January platinum dropped 80 cents to $1,592.90 per ounce.

Benchmark crude jumped $1.58, or about 1.8 percent, to finish at $89.51 per barrel in New York. It was the biggest gain in a month.

In other energy trading, heating oil rose 3.91 cents to finish at $3.0356 a gallon. Natural gas fell 9.8 cents, or 2.9 percent, to $3.32 per 1,000 cubic feet after rising for two straight days. Wholesale gasoline gained 5.22 cents to finish at $2.7431 a gallon.

More By Sandy Shore.

Next Article

Related Stories

More Related Stories

Featured Slide Shows

The week in 10 pics

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
    Credit: AP/LM Otero

  • Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
    Credit: AP/Matt Rourke

  • A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
    Credit: AP/Jenny Aicher

  • Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
    Credit: AP/Molly Riley

  • Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
    Credit: AP/J. Scott Applewhite

  • Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
    Credit: AP/Carolyn Kaster

  • O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
    Credit: AP/Las Vegas Review-Journal/Jeff Scheid

  • Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
    Credit: AP/NASA/Chris Hadfield

  • When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
    Credit: AP/Jacquelyn Martin

  • A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
    Credit: AP/The Duluth News-Tribune/Clint Austin

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

Comments

 0 Comments

Comment Preview

Your name will appear as username

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>

follow salon

Most Read

Popular on Reddit

links from salon.com

From Around the Web

Presented by Scribol
listener_new_rect The Listener: So long, Sookie Stackhouse

Recommendations