Demand continues to be a big drag upon commodities, as slowing economic growth continues to hammer raw materials and agricultural products in a number of areas.
We talked about platinum and palladium last post, which is being directly impacted from the declining auto industry.
But cooler and wetter weather has also increased the outlook for corn, which has been plummeting since corn reached a record price of $7.30 a barrel on the CBOT Friday the 13th of 2008. Corn fell today to a four-month low of $5.3625 a bushel, a 3.5 percent drop.
With the World Bank predicting global growth for crude oil dropping from the 2007 levels of 3.7 percent to 2.7 percent this year, prices have been dropping, going as low as $188 a barrel.
Other commodities plunging have been rubber, which is now at a two-month low; palm oil; nickel, which fell to a two-year low ($17,450 a metric ton); and zinc, which is at its lowest since December 2005 ($1,730 a ton); and soybeans, which fell 3.4 percent to $12.51 a bushel.
Commodity-tracking indexes show investors took out $680 million out of commodities last week, a record sixth week in a row.
"I'm not saying the long-term upward trend for commodities is going to come down," Mark Mobius, who oversees about $40 billion in emerging-market equities at Templeton Asset Management Ltd. in Singapore, said in an interview. "But you're going to see this overreaction, or the higher prices that we've seen recently that are beyond the trend, come back down again."
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