The weather also took a toll on the developing winter wheat
crop, which deteriorated to its worst condition for this time of
year in 17 years.

The U.S. Agriculture Department said corn planting, as of
April 28, was 5 percent complete, just 1 percentage point ahead
of where farmers were a week ago. The pace was the slowest since
1984, when farmers also had completed just 5 percent of their
corn planting.

Analysts had predicted corn planting to be 9 percent
finished, according to the average of 13 estimates in a Reuters
poll that ranged from 7 to 11 percent.

Prior to USDA’s planting report, corn traders on Monday had
expected a slow planting place and bid Chicago corn futures 6
percent higher for their biggest gain since July.

In Iowa, the top U.S. corn producing state, planting was
just 2 percent complete. Farmers in Illinois and Indiana, two
other major producers, had finished just 1 percent of their corn
seeding.

“Wet fields are the topic for most farmers across the
state,” the Illinois field office of USDA’s National
Agricultural Statistics Service said in a report. “The heavy
rains from the week before combined with the cooler-than-normal
temperatures, have many fields still too wet. There has been no
significant planting done yet.”

The five-year U.S. average for the end of April is 31
percent, while a year ago, farmers had finished 49 percent of
their corn planting. Corn planting in 2012 was completed in
record time but the final crop came in well below expectations
due to the drought that hit the Midwest during the summer.

“Our main concern is not that we didn’t get most of our crop
planted by the end of April, it’s just we’re not quite sure when
we’re going to start,” said Emerson Nafziger, agronomist at the
University of Illinois.

In 1984, the last time planting was as slow as it is now,
the sluggish ace had little impact on harvest, with final corn
yields averaging 32 percent better than the previous year.

Farmers typically aim to have the bulk of their crop seeded
by the middle of May to ensure that the corn has enough time to
mature so it can withstand the heat of the Midwest summer.

USDA rated the winter wheat crop 33 percent good to
excellent, the lowest for this time of year since 1996, when the
crop also was rated 33 percent good to excellent. A week ago,
U.S. winter wheat was 35 percent good to excellent and was rated
64 percent good to excellent a year ago.

In Kansas, the largest producer of hard red winter wheat,
good-to-excellent ratings fell 3 percentage points to 27
percent.

The Wheat Quality Council’s annual tour of the state starts
on Tuesday and scouts will get a close look at the damage caused
by drought and a cold snap in April.

In the Midwest, farmers will likely push planting forward
during the first half of the week before more rain drives them
from the fields again. Forecasts call for rain amounts of 0.5
to 1.0 inch across the region.

Wet fields and cold weather also delayed farmers in the
northern U.S. Plains trying to seed spring wheat. USDA said
spring wheat planting was just 12 percent complete compared to
the five-year average of 37 percent.

USDA will provide its first update on soybean planting in
its May 6 crop progress report.

(Additional reporting by Christine Stebbins; Editing by Bob
Burgdorfer)

The exchange’s modified trading schedule, launched three
weeks ago, is failing to attract big volumes at the open as some
traders prefer to wait until the traditional starting time,
which is an hour after the opening bell, before booking new
deals.

The division of the opening burst, which has typically been
one of the most active parts of the trading day, leaves traders
wondering about the best time to wade into the market. Traders
generally prefer to deal when the market is most active as a
deep pool of liquidity ensures that bids or offers will not be
left unfilled for long.

During the first three weeks of the newly modified trading
session, trading volume in the front-month corn futures contract
has been heavier at 9:30 a.m. CDT (1430 GMT) than during
the market open at 8:30 a.m. CDT (1330 GMT) on eight of 15 days.

“What is the real open?” said Tony Rohrs, a farmer in
northwest Ohio who trades futures to hedge his crop as well as
to make additional money. “It is just a little confusing.”

Rohrs said that sometimes he will wait to book trades even
if he sees prices moving sharply early in the session in case
there is a reversal at the 9:30 a.m. burst.

Wheat volumes were bigger during the second burst seven out
of 15 times. Trading in soybeans has been more consistent, with
volume during the first 10 minutes of trading eclipsing the
burst that hits at 9:30 73 percent of the time.

“I do not know how to put my fingers on that,” said Tom
Grisafi, president and chief executive of trading firm Indiana
Grain Co. “It screwed me up a few times.”

The new grains open coincides with the start of trading in
U.S. equities, and many speculators who trade both markets are
more focused on the stock market. Gold and silver also are open
for trading during that time and may be attracting attention
away from grains.

“Speculators like myself are consumed with trading more
volatile markets,” Grisafi said. “I am not going to be bothered
with a small position in corn when I can have a massive swing in
gold.”

A spokesman for CME Group, which owns the Chicago
Board of Trade, declined to comment on trading activity under
the new schedule.

Under the new CBOT schedule, open outcry trading in the
exchange’s vaunted pits runs from 8:30 a.m., one hour earlier
than before, until 1:15 p.m. Pit trading in the 21-hour
schedule, which CBOT ran for about a year, began at 9:30 a.m.
and closed at 2 p.m.

Most volume in the extended session took place when the pits
were open, even though more than 90 percent of all trading is
done over computer screens without any input from traders on the
floor. The 21-hour day was scrapped after traders complained
that the extended session hurt liquidity, making it harder for
buyers and sellers to find each other in the market.

CME quickly responded to trader complaints about the
extended schedule. More than 600 traders, analysts and grain
handlers last year signed an online petition calling on the
exchange to shorten the trading day.

The exchange launched its 21-hour trading day May 2012 in a
bid to ensure that rival InterContinentalExchange, which
operates grain trading for 22 hours, did not poach CBOT volume
with its look alike grain contracts. ICE volume has remained
thin even with the longer session and reduced trading fees.

Under the new CBOT schedule, electronic trading runs from
7:00 p.m. CDT (2400 GMT) to 7:45 a.m. CDT (1245 GMT) Sunday to
Friday. Trading then stops until 8:30 a.m. CDT (1330 GMT) — a
pause that market participants are calling the biscuit break –
before resuming electronically and in Chicago’s open-outcry pits
until 1:15 p.m CDT (1815 GMT).

The earlier start does not give traders enough time to
digest the overnight news, which may be why many investors are
waiting an hour after the market opens, a veteran floor trader
said. Additionally, many commercial clients such as grain
elevators are not ready to give instructions to traders that
early in the morning.

The CBOT floor starts to fill up ahead of the 8:30 open, but
most traders just stand around when the opening bell rings,
ready to react in case the market swings violently early but not
willing to initiate their strategy for the day.

On one recent morning, a trader giving a tour of the CBOT
floor warned his guests that they would not be impressed by the
opening bell, which used to be accompanied by a surge of
activity and screaming brokers who waved their arms wildly to
execute trades.

“You are not going to see that much,” he said. “It is going
to be noisy for about 15 seconds.”

U.S. bankruptcy code allows for the court-appointed trustee,
Chicago lawyer Ira Bodenstein, to receive a commission of up to
3 percent of the $123.3 million that has been returned to former
brokerage customers. The returned monies represents less than
one-third of the funds customers had deposited with the futures
broker when the firm collapsed and the accounts were frozen last
July.

The initial payment is only part of the $3.7 million in
compensation Bodenstein is seeking for his role in the
bankruptcy proceedings, which represents the maximum 3 percent
commission allowed under federal law.

While that sum may seem large, the Bankruptcy Court judge,
Carol Doyle, said Wednesday that only one person had written a
letter to the court to complain about the trustee’s pay day
request.

In a letter that Doyle read in part in court, the person -
who claimed to have lost $100,000 – questioned why Bodenstein
should make more money in “one fell swoop” than the defrauded
Peregrine customer would make in a lifetime.

Peregrine Financial, known as PFGBest, collapsed last summer
after its founder, Russell Wasendorf Sr, tried to kill himself
just before regulators uncovered a customer fraud scheme going
back decades. Wasendorf began serving a 50-year prison term in
February for stealing close to $215 million from his customers.

Some 24,000 former customers are still missing most of the
money they had invested with the firm. The money to pay
Bodenstein will come from Peregrine’s estates and would
otherwise be used to pay back customers and creditors.

Bodenstein told Reuters after Wednesday’s 20-minute hearing
at federal Bankruptcy Court in Chicago that he expected the next
distribution to Peregrine customers would be sometime in the
summer, adding that he did not know how big the payments would
be.

Bodenstein has described his compensation request as
“appropriate in light of the results and benefits achieved
through his efforts on behalf of the estate and its creditors,”
according to court papers. Among other things, Bodenstein’s bill
covers months worth of work, including travel, meetings and
interviews with reporters, according to an itemized statement
filed with the court.

Bodenstein refrained from asking for the full payment right
away because he did not want to be seen as putting himself ahead
of Peregrine’s former customers, his lawyer, Robert Fishman,
previously told Reuters.

(Additional reporting by Tom Polansek and Ann Saphir; Editing
by Leslie Adler)

“I think if they compress the hours again … it serves the
needs of the customers that actually use this market,” said
Chris Robinson, senior trader at Top Third Ag Marketing. “I
think it is going to be good for the markets.”

CME announced this month that it plans to reduce the trading
cycle for the grain markets on its Chicago Board of Trade, which
are used to set food prices around the world, to 17.5 hours a
day from 21 hours a day starting on April 8.

The exchange operator lengthened its trading day to 21 hours
in May 2012 to compete with arch-rival IntercontinentalExchange
, which last year launched look-alike grain contracts and
nearly round-the-clock trading.

The new schedule irked many long-time customers who
complained that liquidity quickly dried up as trades were spread
out across the long day. Overall volume also dropped off as
investors cut back their exposure to the volatile market.

“It was kind of out of control,” said Jason Britt, president
of Central States Commodities. “I had some long-time customers
… who really scaled their volumes back because you did not
know if you were going to wake up in the middle of the night and
see that beans were down 30 or 40 cents.”

CME, which surveyed its customers about the effects of the
expanded trading session, said earlier this week it had
“quantitative evidence” that supported the customer complaints.

So far this year, CBOT corn, soy and wheat futures volume
has totaled 3.16 million contracts, down 4.6 percent from the
same period in 2012.

Volume for CBOT corn futures, the heaviest traded
agricultural contract, have fallen the most, dropping 14 percent
in the first three months of 2013 compared to a year earlier.

“You make a knee-jerk reaction to things that may or may
not be an issue, you open Pandora’s box,” said Garrett Toay,
risk management consultant at Toay Commodities Futures Group in
Des Moines, Iowa.

Traders said that many investors will be carefully
monitoring the liquidity pools, particularly at the opening and
closing when activity is the heaviest, before deciding if they
want to bring business back to the grains market.

Investors also will test the waters on days when there is
big fundamental news, such as a crop conditions report, and
heavy trading is expected.

CME’s willingness to change will boost the confidence that
investors have in the grains market, which could also make some
investors more willing to come back, Central States’ Britt said.

* Price drop second biggest of last 10 years

* Farmers locked in acres last fall with fertilizer
application

By Mark Weinraub

CHICAGO, March 8(Reuters) – Recent declines in U.S. corn
futures prices have failed to dent growers’ enthusiasm for
planting the feed grain this spring, even though soybean prices
have outperformed corn, farmers and analysts said.

Crop insurance guarantees, money spent on fertilizer and
recent rainy weather in key growing areas have cemented the
acreage decisions that farmers made in the fall.

The Chicago Board of Trade December corn futures contract
, which tracks the crop that will be harvested this fall,
shed 7.1 percent of its value over the first two months of 2013.
That was the second worst winter performance for the new crop
contract over the past 10 years.

The only bigger decline was in 2009, when new-crop prices
dropped 13.4 percent in the January/February time frame. By the
end of harvest that year, when farmers were delivering their
crop to elevators and processors, futures prices were just 1
cent above their end-of-February level.

Farmers have already prepared most of their corn acreage by
applying fertilizer, which is not necessary when planting
soybeans. Those tractor trips across the fields last fall to
apply fertilizer locked in the acreage for many farmers
regardless of what the futures market has done this winter.

“We are not going to change because we already have the
stuff down on our ground,” said Garry Niemeyer, an Illinois
farmer. “I think most farmers made their plans last fall and
they are sticking to them. When you put anhydrous ammonia on or
some form of nitrogen and you spend that kind of money, you are
not going to plant soybeans.”

Soybean prices also dropped during the first two months of
2013, but the declines were smaller than in corn as new-crop soy
futures lost just 3.3 percent.

Still, most farmers think that corn offers a better return,
even with the added expense of fertilizers and the higher seed
cost.

“In terms of input costs, they aren’t dramatically that
different from last year,” said Nicole Thomas, analyst with
McKeany-Flavell. “They can still make a pretty good margin at
the current levels.”

Corn planted on high productivity farmland in central
Illinois is projected to return a profit of between $603 and
$678 per acre, depending on a farmer’s crop rotation practices,
according to University of Illinois research. Soybean returns
were seen between $405 and $430 per acre.

Growers who have not had a chance to apply fertilizer to
fields earmarked for corn will be closely watching the futures
market during the next few weeks to see if it provides a further
incentive to switch. But a quick harvest and dry weather across
the Midwest last fall gave most growers the chance to prepare
their fields for this spring, so there is not too much acreage
in flux, Niemeyer said.

The U.S. Agriculture Department has projected 2013 corn
acreage at 96.5 million and soybean acreage at 77.5 million. It
will update its acreage outlook based on farmer surveys at the
end of the month.

USDA’s Risk Management Agency last week set floor prices for
crop insurance policies at $5.65 per bushel for corn and $12.87
a bushel for soybeans across most of the U.S. crop belt.

Andrew Goleman, a farmer in Illinois who plans on splitting
his corn and soybean acreage evenly, said that last year’s
drought, while devastating to the crop, made farmers more
comfortable with crop insurance and confident about their
acreage decisions for 2013. Many growers cashed in policies for
the first time ever in 2012 because of the drought.

Recent rains across key growing areas of the U.S. Midwest
have boosted much-depleted soil moisture levels and made farmers
more optimistic about this year’s crop as planting season
approaches, also furthering their commitment to corn.

Soybeans fared better than corn did in last year’s drought.
Corn yields plunged to their lowest level since 1995 as the crop
withered in the dry soils and scorching temperatures.

(Reporting by Mark Weinraub; editing by Jim Marshall)

At question is whether the furloughs will impact the
agency’s Agricultural Marketing Service (AMS), which among other
things generates prices used as benchmarks for some livestock
contracts on the CME Group’s exchange.

The U.S. Department of Agriculture has said 8,400 meat
inspectors could be idled by the automatic budget cuts, set to
come into effect on March 1, but has not said how the AMS will
be impacted.

Cattle traders are playing it cautious. Commercial traders
and speculators have been taking money out of the market during
the past week because they do not know if they will be able to
unwind those positions once the spending cuts are enacted,
traders said.

This action has limited gains in livestock futures despite a
winter storm in the U.S. Plains that could disrupt cattle
marketings.

“Most of the time we would have guys buying just on this
storm alone and being a little bit more aggressive but with this
uncertainty it has got guys sitting on their hands a little
bit,” said Jason Britt, president of Central States Commodities
in Kansas City, Missouri.

A CME spokesman said on Tuesday it was closely monitoring
the possible impact of the budget cuts but did not say if
trading in affected contracts would be halted. The exchange
operator also said it would keep its customers informed of
potential changes to its delivery or settlement procedures due
to the cuts, which will be enacted on Friday.

CME said last week that exchange rules allow it to modify
the delivery and settlement rules pertaining to its live cattle
contracts if USDA staff is not available for grading and
inspections. The exchange did not say if other contracts
affected by the cuts could also be modified.

Market players said the uncertainty could be seen in recent
price activity. CME live cattle prices have risen just
0.5 percent during the past week, despite the severe winter
storms that have dumped more than a foot of snow in parts of
Kansas and Texas and that will likely slash weight from feedlot
cattle.

Daily trading volume in CME’s live cattle futures has
averaged just 43,787 contracts since the exchange operator
announced it could be affected by the sequester on Thursday,
down from 58,255 contracts during the previous week.

Concerns that a glut of livestock could develop if USDA
inspectors are unavailable have kept cattle prices in check,
traders said.

“Feeder lots are real nervous that they are not going to be
able to move this product,” said Tom Grisafi, president and
chief executive of trading firm Indiana Grain Co.

Cash settled livestock and dairy products require data that
may be unavailable because of the sequester, CME said last week.
Additionally, the daily calculation of the CME Feeder Cattle
Index and CME Lean Hog index, the monthly calculation used to
determine settlement prices for CME Dairy futures products, and
spot call dairy markets could be disrupted.

U.S. Agriculture Secretary Tom Vilsack has said that it
could be months before a threatened shutdown of U.S. meat plants
would occur because of a furlough of meat inspectors. USDA
employees get from 30 to as many as 120 days notice of impending
layoffs. By law, plants cannot ship meat without the Agriculture
Department’s inspection seal.

The $85 billion in automatic across-the-board spending cuts,
are set to take effect on March 1 unless Congress can come up
with a deal to avoid them. Food inspections, air traffic
control, law enforcement and education programs also would be
among those hit.

Wheat volume rose to 17.6 million contracts traded from June
2012 through January 2013, up 14.8 percent from a year earlier.
Volumes were higher in seven of those eight months.

CME started its much-maligned extended trading session,
which allows for 21-hour trade, in late May. Critics have said
the move reduced liquidity in key agricultural contracts, and
the exchange operator recently announced it would cut back the
session although no details have been provided.

Corn volumes have fallen 10.4 percent during the same time,
and monthly trading was lighter in seven of the eight full
months since the switch to extended hours was made.

Total CBOT volumes fell 8.4 percent following the switch to
longer hours. CME extended the trading day as part of a bid to
fend off competition from the rival IntercontinentalExchange
, which launched grain and soy contracts that trade 22
hours a day in 2012.

The global reach of wheat, which is grown all over the
world, lends itself to near-24-hour trading better than a
commodity like corn.

Big wheat producers such as Russia and Australia often make
forecasts about crops outside of traditional trading hours.
Additionally, large purchases from importers such as Egypt are
often finalized before the start of the trading day in Chicago.

News about wheat hits throughout the day and commercial
buyers across the globe are eager to take advantage of hedging
opportunities no matter what time it is in the United States.

For example, Australian traders looking to hedge recent cash
market deals can make their moves as soon as they need to,
instead of waiting for the Chicago pits to open.

“Everybody sleeps at a different time,” said J. Mark Kinoff,
president of Ceres Hedge.

By contrast, the majority of the world’s corn is grown in
North and South America so most major announcements regarding
those crops, and subsequent prices moves, come during the
traditional trading hours for the Chicago grain contracts.

Wheat volumes also benefited from a surge in corn prices to
record highs during the summer. The high price of corn, as well
as limited supplies, forced livestock producers to use more
wheat in their rations than usual.

The increased wheat feeding also caused an increase in
futures market hedging, adding to the bump in trading volumes.

Huge price swings in wheat also helped to raise volumes,
traders said. Wheat prices shot up 27 percent between the
middle of April and early July, forcing speculators to scramble
to cover short positions they had built up due to light export
demand and expectations for a big crop in the U.S. Plains.

Commodity Futures Trading Commission data shows that
noncommercial traders, a category that includes hedge funds,
completely erased their net short position in wheat, which they
had built to the highest level ever, during that 11-week period.

The USDA, which has been issuing its monthly reports at 7:30
a.m. CST (1330 GMT) for nearly two decades, decided last year to
push back the release to 11 a.m. CST (1700 GMT) when trading at
the Chicago Board of Trade grain markets is usually in full
swing.

“I actually think it will be a lot better,” said Justin
Lewis, vice president of KIS Futures in Oklahoma. “It will allow
the entire country to participate a lot more actively.”

Following the last two monthly crop reports, 14 percent of
the entire day’s trading in the most active CBOT corn, soybean
and wheat contracts had been condensed into the 30 minutes after
the release of the data, according to Reuters data.

The pop in volume could be even bigger on Friday after the
report hits at 11 a.m. CST, as more traders from coast to coast
will be ready to make moves. However, volumes are expected to be
almost nonexistent in the hours heading up to the report.

Traders have had some practice dealing with reports released
when the market is open as the Chicago Board of Trade had
switched to 21-hour trading sessions in May. Since then, there
has been a surge in volume immediately following reports, market
activity would then cool before heating up again at 9:30 a.m.
central, the traditional opening time for trading in the CBOT’s
iconic pits.

Before CBOT’s extended hours, traders had two hours to
process the USDA data and formulate strategies before the market
opened.

The report on Friday will provide USDA’s final estimate of
the 2012/13 U.S. corn and soybean crops as well as 2013/14 wheat
plantings and estimates of how big domestic grain supplies were
when harvest ended last fall.

The U.S. government’s January report is one of the most
anticipated of the year and the market often swings violently
following its release. Corn prices have moved their daily
trading limit in the session after the report hits the market
five out of the last six times.

Volumes have been light so far this week as many traders
already have placed their bets on what direction they think the
market will move after the release.

“Watching the grains markets feels a bit like waiting for
the closing bell back in high school the past few days as the
January USDA report approaches everyone just stares at the clock
waiting,” Robert Chesler, vice president and head of the food
service division at INTL-FCStone said in a note.

CBOT corn averaged just 218,885 contracts a day during the
first three days of this week, 24 percent lower than its daily
average during 2012. Soybean volume averaged 149,919 contracts a
day this week, down 27 percent from 2012, and wheat averaged
90,933 trades a day so far this week, 16 percent lower than a
typical day in 2012.

Investors were reluctant to stake out new positions ahead of
the much anticipated report, which should provide fresh
direction to the grain markets and provide plenty of information
for traders to chew through.

“By the time we get to Friday morning, most of the actual
position squaring should be behind us,” said Bill Gentry, a
broker with Risk Management Commodities in Lafayette, Indiana.
“This market has been looking for headlines for months.”

SOY SETBACK
Soybeans fell despite concerns over production shortfalls in
South America, with further unfavorable weather forecast.
Widespread rainfall moved across Argentina over the weekend
causing another slowdown in crop seedings and the rain is
expected to continue through Wednesday, Global Weather
Monitoring said.
Analysts remain concerned the window in which soybeans must
be planted to avoid yield losses is closing, further tightening
global stocks.
Estimates for the country’s 2012/13 soy harvest, which
should start in March, vary wildly. Government officials have
said they expect a crop of 55 million tonnes or more while
worst-case private estimates reach down to 45 million tonnes.

Prices at 8:41 a.m. CST (1440 GMT)

LAST NET PCT YTD
CHG CHG CHG
CBOT corn 715.75 -8.25 -1.1% 10.7%
CBOT soy 1472.50 -23.75 -1.6% 22.9%
CBOT meal 446.80 -8.60 -1.9% 44.4%
CBOT soyoil 49.28 -0.51 -1.0% -5.4%
CBOT wheat 803.75 -4.25 -0.5% 23.1%
CBOT rice 1522.00 1.50 0.1% 4.2%
EU wheat 255.25 -2.50 -1.0% 26.0%

US crude 87.64 0.44 0.5% -11.3%
Dow Jones 13,258 23 0.2% 8.5%
Gold 1696.96 -.69 0.0% 8.5%
Euro/dollar 1.3179 0.0016 0.1% 1.8%
Dollar Index 79.4970 -0.0710 -0.1% -0.8%
Baltic Freight 743 -23 -3.0% -57.2%

In U.S. cents, benchmark contracts, except EU wheat (euros) and
soymeal (dollars). CBOT wheat, corn and soybeans per bushel,
rice per hundredweight, soymeal per ton and soyoil per lb.

(Additional reporting by Sam Nelson in Chicago, Nigel Hunt in
London, Colin Packham in Sydney and Michael Hogan in Hamburg;
Editing by Chizu Nomiyama) ]]> http://blogs.reuters.com/mark-weinraub/2012/12/18/soybeans-drop-after-u-s-export-deals-canceled/feed/ 0 http://www.reuters.com/article/2012/11/20/markets-commodities-idUSL1E8MKD0E20121120?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/mark-weinraub/2012/11/20/possible-middle-east-truce-pressures-oil-gold/#comments Tue, 20 Nov 2012 20:51:03 +0000 Mark Weinraub http://blogs.reuters.com/mark-weinraub/?p=40 CHICAGO, Nov 20 (Reuters) – Oil fell more than 2 percent on
Tuesday, retreating from a one-month peak as investors took risk
premium out of the market after a Hamas official announced that
militants from the Gaza Strip and Israel had agreed to a
ceasefire brokered by Egypt.

Gold also fell, erasing early gains after
better-than-expected U.S. housing data, while grains firmed amid
concerns about tight supplies. Corn prices rose for the third
day in a row, hitting their highest level in more than a week.

The Thomson Reuters-Jefferies CRB index, a global
commodities benchmark, dropped 0.6 percent a day after climbing
to its highest level in 3-1/2 weeks.

“Yesterday’s big rally was all about fears of a wider
conflict stemming from Israel and Gaza, so when the truce was
announced it’s not surprising we’ve seen prices come right off,”
said Andy Lebow, vice president at Jefferies Bache in New York.

Front-month Brent crude for January delivery dropped
$1.73, or 1.6 percent, to $109.97 a barrel. U.S. January crude
dropped $2.25, or 2.5 percent, to $87.03.

The market was still awaiting confirmation of a truce but
the reduced worry about supply disruptions pressured oil prices,
while the possibility of easing tensions weighed on gold, a
traditional safe-haven investment.

“Geopolitical tensions have always had an impact on gold,”
said Ross Norman, chief executive of precious metals trader
Sharps Pixley, said.

Spot gold fell to $1,726.94 an ounce by 2:23 p.m. CST
(202 3 GMT). U.S. gold fell 0.6 percent to $1,723.20 an
ounce.

Worries about Europe’s economy also pressured prices of oil
and other commodities after ratings agency Moody’s stripped
France of its prized triple-A badge, citing uncertainty about
the country’s fiscal and economic outlook.

Tight cash markets and technical buying boosted U.S. grain
futures, but gains were limited by a strong U.S. dollar, which
makes U.S. crops more expensive on world markets and lowers
demand from investors seeking a hedge against inflation.

January soybeans at the Chicago Board of Trade gained
1.3 percent to $14.12-3/4 a bushel, December corn added
0.6 percent to $7.43-1/4 and December wheat rose 0.3
percent to $8.45.

Wheat prices received support after the U.S. Agriculture
Department said late on Monday that the condition of the winter
wheat crop fell to 34 percent good to excellent, the lowest
level ever for November.

Little relief was in sight as most of the U.S. Plains were
expected to remain dry for the next two weeks.

“(It is) not very promising,” said Don Keeney, meteorologist
with MDA EarthSat Weather. “It does not look like you are going
to get a whole lot of rain for the next 15 days. It is very,
very dry there.”

In soft commodities, Arabica coffee notched the biggest
daily decline in four months due to the improving crop outlook
in Brazil. Sugar fell after a sharp rally on Monday.

March sugar dipped on ICE, settling 8 cents lower at
19.86 cents per pound. March white sugar on Liffe
dropped 0.5 percent to $523.60 per tonne.