Agriculture futures plunge, metals fall

Forecasts for cooler, wetter weather in the Midwest this week _ the conditions needed for a healthy crop of corn _ triggered a sharp pullback in agriculture prices Monday on the Chicago Board of Trade.

Elsewhere, precious and industrial metals finished the day mostly lower, while crude oil rose to an 11-month peak.

Traders sent corn and soybean futures tumbling to the low end of their daily trading limits on the Chicago Board of Trade, and wheat tailed them lower. The CBOT limits daily price swings in either direction to 20 cents for corn, 50 for soybeans and 30 cents for wheat.

Both corn and soybeans need moisture during the crucial pollination stage, which for corn comes in mid-July and for soybeans in early August. The unexpected rains over the weekend surprised the futures market, which had seen prices build last week amid unusually unified predictions for dry, hot weather, said Tim DeValle, agriculture consultant with Roach Ag Marketing Ltd.

If the Corn Belt gets cooler-than-usual nights and slightly above normal precipitation the week of pollination, farmers can expect better crop yields, said Elwynn Taylor, Iowa State University extension climatologist. The National Weather Service expects rain from northeast Iowa to Ohio over the next five days.

December corn closed at $3.485 a bushel, while November soybeans ended at $8.9875 a bushel. September wheat settled down 19 cents at $6.0175 a bushel.

Traders will closely monitor how weather models evolve in the coming days, said DeValle. They'll also eye crop progress reports from the U.S. Department of Agriculture. The latest, issued Monday after the market close, showed deterioration in both the corn and soybean crops.

The agency reported that 64 percent of the U.S. corn crop was in good or excellent condition in the week ended July 15, compared with 70 percent a week earlier. However, the crop's condition is about on par with where it was last year at this time. The condition of the soybean crop slipped to 62 percent good-to-excellent versus 65 percent in the prior week.

After teetering in early trading, crude oil futures found direction higher and ended the session at an 11-month high. The bulls seemed to have returned to the forefront: The latest data from the Commodity Futures Trading Commission on Friday showed a surge in speculative long positions, or bets that prices will rise, in crude oil and petroleum products traded on the New York Mercantile Exchange.

Light, sweet crude for August delivery gained 22 cents to close at $74.15 _ the highest settlement since Aug. 11 last year. Gasoline futures fell 9.86 cents to $2.1262 a gallon.

Sentiment in the crude market continued to be moved by last week's closure of a North Sea pipeline and the startup of several refineries in the U.S. following maintenance shutdowns. As refineries ramp up operations, they'll need more crude oil to pump out more gasoline _ an idea that helped contribute to the divergence in crude and gasoline prices.

Overseas, copper prices slipped on the London Metal Exchange as worker strikes at several mines were resolved, lessening the threat on world supplies. Workers at Chile's Collahuasi mine last week agreed to a new contract and ended their strike. Over the weekend, disputes were resolved at two mines in Zambia.

The London Metal Exchange also posted its first increase in copper stocks in nearly three weeks, and copper prices slipped about 1 percent.

Nymex copper fell 3.1 cents to settle at $3.562 a pound.

Lead pioneered into record territory for the fourth straight session as supply concerns spurred speculative buying, said BNP Paribas analyst David Thurtell, in a report. Lead settled up 2 percent on the LME.

With the dollar up against the euro but mixed against other world currencies, August gold shed $1 to close at $666.30 an ounce on the Nymex. September silver followed, edging down 4.5 cents to $13.065 an ounce.