In 2008, corn fell by 14%, soybeans lost 22% and wheat tumbled 33%. The slump comes on the back of record highs seen in early part of the year. In 2008 itself, corn prices reached a record $7.9925 on June 27, soybeans reached an all-time high of $16.3675 on July 3, wheat touched a record $13.495 on February 27 and palmoil futures touched a record 4,486 ringgit a tonne in March. "On the last trading day of this year, speculation that the economic slump will curb demand for grains and soybeans outweighed concern over dry weather in Brazil and Argentina," Bloomberg news quoted Han Sung Min, a manager at the international marketing division of Korea Exchange Bank Futures Co. in Seoul as saying.
Crude oil, the main driver for all commodities, plunged 61% this year, the first time since 2001 and is set for further drop as the world comes to terms with the worst economic crisis since World War II.
Wednesday crude oil for February delivery declined as much as $1.28, or 3.3%, to $37.75 a barrel on the New York Mercantile Exchange and traded at $37.91 at 10:21 a.m. London time. "Crude is still absorbing the negative economic news, focusing on consumer confidence and those types of indicators," said Olivier Jakob, managing director of Zug, Switzerland-based Petromatrix.
The gloom in world economies was clearly stated in latest report by the New York-based Conference Board that said that in 2008 confidence among US consumers sank to the lowest level in at least 41 years, as Americans grew concerned that they will lose their jobs.
Among all the bad news surrounding commodity prices, gold, stood out because of its appeal as a safe-haven investment and also because of slump in dollar.
Gold rose 4% this year, preserving investors' money as $30 trillion was wiped off equities. The metal is the second-best performer in the UBS Bloomberg CMCI Index of 26 commodities this year, behind cocoa. The gains attracted money from investors seeking to diversify their portfolios.
"Gold remains the best performing metal for 2008," Jonathan Barratt, managing director of Commodity Broking Services in Sydney, said in an e-mail note today. "All roads point to gold continuing its ascent in 2009." Gold in the SPRD Gold Trust, the largest exchange- traded fund backed by bullion, reached a record, overtaking Japan as the world's seventh-largest gold holding.