Corn prices continued grinding lower this week, falling beneath $5.00 per bushel. The crop is entering its crucial pollination period, which affects the number of kernels each ear produces. Optimal pollination requires moisture to ensure a good crop. Widespread rains forecast for the Midwest this weekend are helping to increase optimism that this year's pollination will lead to a record-breaking crop near 14 billion bushels, pushing prices lower.
Although there are some concerns about dry conditions in Kansas, Nebraska and Missouri, the majority of this year's corn crop is in good or excellent condition, according to the USDA. During the week, corn for delivery in December lost 14 cents per bushel (-2.8%), trading midday Friday at $4.96.
Cocoa Market Sweetens
Cocoa prices rose to a one-month high on Friday on expectations of low production and high global demand. The Ivory Coast and Ghana, the world's two largest cocoa-producing nations are both experiencing weather problems that could shrink or delay this fall's harvest, limiting available supplies.
Furthermore, reports this week showed that cocoa processing is rising in Asia, Europe and North America, indicating widespread demand around the globe. Since chocolate is often viewed as a luxury good, cocoa demand is generally sensitive to economic growth, and optimism surrounding the global economy has contributed to price gains.
During the week, cocoa prices climbed by $140 per metric ton (+6.2%), reaching as high as $2377 on Friday.
Gasoline Fueled Higher
Gasoline prices exploded to a four-month high this week amidst a series of refinery closures that limited fuel production. Americans typically use more gasoline during the summer months, making this an inopportune time for additional supply constraints.
Prices are also being led higher by crude oil, which neared $109 per barrel on Friday, the highest price in over a year. Oil prices have been rising due to the ongoing conflicts in Egypt and Syria and were further supported this week by strong US economic data, indicating the potential for rising demand.
As of midday Friday, August gasoline futures, which represent the wholesale price without taxes or other expenses included, were trading at $3.16 per gallon, up 4.25 cents (+1.4%) during the week.