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Oil Gains on Anticipation of QE, Weather Boosts Corn & Wheat

April 12, 2012 at 21:10 by Vladimir Vyun

Oil climbed today, rising for the second day, as central banks of developed nations signaled that they may stimulate their economies. Janet Yellen, a member of the Federal Open Market Committee, suggested that the US economy needs stimulus despite signs of recovery:

I consider a highly accommodative policy stance to be appropriate in present circumstances. But considerable uncertainty surrounds the outlook, and I remain prepared to adjust my policy views in response to incoming information. In particular, further easing actions could be warranted if the recovery proceeds at a slower-than-expected pace, while a significant acceleration in the pace of recovery could call for an earlier beginning to the process of policy firming than the FOMC currently anticipates.

Masaaki Shirakawa, the Governor of the Bank of Japan, said that the central bank will perform “powerful easing”. The European Central Bank hinted that it may resume purchases of sovereign securities. Futures for crude oil delivery in May gained $0.94 to $103.64 per barrel on NYMEX. Brent was up from $120.08 to $121.79 per barrel as of 20:29 GMT on ICE today.

Corn gained for the first time this week and wheat advanced for the second consecutive session today on concerns that low temperatures may hurt crops in the United States. The USA is the largest exporter of both grains. Prices may yet fall as rains in Europe may boost plant growth. Corn climbed from $6.3750 to $6.4450 per bushel today on CBoT before trading at $6.3925. Wheat was up from $6.2925 to $6.3900 per bushel, following the advance to $6.4775.

If you have any questions and comments on the commodities today, use the form below to reply.

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