January 26, 2012

Argentina's corn prices up on weather conditions

Argentina's corn and cocoa prices went up Tuesday (Jan 24) on a stretch of dry weather on two continents.

Investors are concerned that the weather problems will lead to smaller harvests of corn in Argentina and cocoa in the Ivory Coast.

Argentina, one of the world's biggest corn exporters, has been coping with dry weather for weeks. Recent rainfalls have done little to ease damage, Barclays Capital analysts stated in an email.

Hot weather also is baking the Ivory Coast, a major global producer of cocoa. "They're looking for rain and the crop is getting exhausted by heat," said Spencer Patton, founder of the hedge fund Steel Vine Investments LLC.

Corn for March delivery rose for a fourth straight day Tuesday, ending up US$0.1025 at US$6.3025 per bushel. March cocoa increased US$144, or 6.3%, to finish at US$2,413 per tonne.

Other commodities were mixed as talks continued over the best way to reduce Greece's massive debt burden. The marathon negotiations are between the finance ministers of countries that use the euro currency and private creditors such as banks and investment firms that hold Greek government bonds.

Investors are worried that a deal may not be reached, which could threaten the broader European economy.

Other March agriculture contracts rose. Wheat increased US$0.1375 to end at US$6.335 per bushel and soy ended up US$0.025 at US$12.20 per bushel.