Commodity Blog

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Crude Oil Falls, Corn & Soybeans Threatened by Drought

November 22, 2010 at 20:51 by Vladimir Vyun

Crude oil dropped today on concerns the Ireland won’t be able to resolve its debt problems and crisis will spread to other European countries. Optimism for Ireland bailout receded after Moody’s Investors Service said that it may downgrade Ireland’s credit rating. Concerns for other debt-laden European countries also suppress demand for commodities. January delivery for crude oil dropped $1.13 (1.4 percent) to $80.85 per barrel as of 12:35 on NYMEX.

Corn and soybeans in Brazil may experience a drought similar to the one in 2005, which harmed 13 percent of crop. The country received below-average precipitation since October. Experts say that heavy rains, followed by drought, may be very harmful to harvest. Estimated output of corn next year varies between 51.8 million and 52.7 million metric tons, while expected soybean harvest is put in range between 67.7 million and 69 million tons.

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