News

September 08, 2008

Commodity Prices Fall Across the Board In Face Of Stronger Dollar

By Sally White

Markets buckled under the weight of bad news and funds dumped commodities to flee to the safety of the rising dollar. Oil fell by ten per cent to below US$105/barrel. Gustav, the first of a forecast series of devastating hurricanes, threatened the US commodity transport system, its off-shore oil installations and much of its growing areas. Details of the collapse of commodities fund Ospraie in the US panicked funds further, and then came worsening US and European economic data to convince them that global recession was looming. The Reuters/Jefferies CRB index of 19 raw materials fell for six straight sessions, closing the week down 22 per cent from its July record.

Only rice prices in among the major Chicago markets moved against the tide of the general fall in commodity prices, rising on concerns of damage from hurricane Gustav and the hurricanes to follow. September rice closed up US 14 cents at US$18.90 a hundredweight, and the intra-day high for November, of  US$19.25, was the highest for two months. Gustav flattened rice in Arkansas, destroying as much as 45 per cent of the crop, and could have caused losses of 25-30 per cent in Louisiana.<br...