Commodity Prices Sinking to 52-Year Low
Nov 3rd, 2008 | By Mike Caggeso | Category: Financial NewsCommodity prices are bracing for their worst month in 52 years as global demand continues to slide. The Reuters/Jefferies CRB Index - a measure of 19 global commodities from light crude to lean hogs - fell 24% in October, Bloomberg reports.
“October is at last ending - the worst month in commodity history,” Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt, told Bloomberg. “Investors are expecting lower growth for the longer term and that is putting prices under pressure.”
The news came one day after the revelation that the U.S. economy shrank 0.3% in the third quarter, and on the very same day that the government announced consumer spending tumbled 0.3% in September - meaning the world’s largest economy is struggling to produce and purchase.
It also continues a steady, months-long decline of commodity prices.
The past year’s inflation epidemic has waned significantly because consumer spending and demand has significantly cooled.
Prices for staple foods such as corn, soybeans and wheat have all come down from their record highs in near perfect harmony.
Corn futures are down nearly 50% from their summer high of $8 per bushel. Same story and stats for soybeans and wheat, the latter hitting a 16-month low in mid-October.
Gas prices have fallen 37.1% from their July 17 high of $4.114 a gallon.
Not coincidentally, gold has fallen 21.1% in that same time frame.
Short-term prices are likely to continue to wane or tread water, as economies around the world are hording their pennies and trying to build capital to start buying again.
“The outlook for demand remains weak while we wait for economic rescue measures to feed their way through the system,” Christopher Bellew, senior broker at Bache Commodities Ltd. in London, told Bloomberg. “Even in emerging markets the growth there is likely to be lower than was previously expected.”
Source: Commodity Prices Sinking to 52-Year Low
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