Unlike bacon, eggs and toast, all of which have been on the rise as a result of this year’s drought, the prices of coffee, cocoa, orange juice and sugar have all fallen this month.
Coffee and cocoa fell on fears the European debt crisis will lower European demand for these two commodities. Orange juice has dropped on estimates that orange-juice production will be larger than last year's. Sugar has fallen on expectations that Brazil’s sugar crop will be large.
Corn pulls grains higher
Corn moved higher on Thursday morning after a bullish crop report showed that ending stockpiles of corn would be much lower than expected, with a USDA estimate of 619 million bushels versus 648 million bushels expected by analysts.
In addition to lower ending corn stockpiles, the USDA estimated the average yield for corn would only be 122 bushels per acre.
Estimates for soybean ending stockpiles was also lower than expected, with the USDA estimating 130 million bushels being left over versus 134 million bushels by analysts. However, it was corn prices that influenced most of the trade on Thursday with its estimates of ending stockpiles being 4.5 percent lower than expected versus beans' 3 percent.
As of midday Friday, corn for December delivery was at $7.54 per bushel, up 6.25 cents (+ 0.8 percent) on the week.
As a result of this year’s climb in soybean prices (up more than 25 percent this year), South American farmers are hoping to capitalize on high prices by increasing planting of soybeans. If estimates hold true, Brazil will surpass the United States as the largest producer of soybeans in the world.
Natural gas rises to high of year
Improving economic conditions, the coming winter, and fears that Tropical Storm Patty could disrupt natural gas supplies have driven natural gas prices up to a high of the year.
Natural gas, which is used to provide heating to millions of U.S. households each year, may put a pinch to U.S. families' pocketbooks this year.
As of midday Friday, natural gas for November delivery was at $3.58 per million BTU, up 18.2 cents (+ 5.4 percent) on the week.