Red October for commodities mkts

Written by Commodities Bureau | Agencies | New Delhi, Oct 31 | Updated: Nov 1 2008, 06:30am hrs
Commodities across the globe dropped again Friday capping a month when prices of wheat, soybeans, maize, rubber, tea in farm and gold, copper, aluminum, zinc and lead dropped to their worst month on record.

Gold tumbled by more than 15% in October, the largest plunge since February 1983, according to Bloomberg data. Oil has slumped 37% while the US Dollar Index against six major currencies gained 7.3% in October.

Bullion for immediate delivery traded at 0.8% lower at $732.62 an ounce at 10.26 am in Singapore after dropping 2.2% on Thursday. Silver for immediate delivery slumped 4.2% to $9.38 an ounce. The Reuters-Jeffries CRB Index, a global benchmark of 19 commodities, was down around 23% in October so far, also set for its largest monthly decline ever.

Wheat price on the Chicago Board of Trade (CBOT) dropped by 21% in October to below $6 a bushel, its biggest monthly fall in more than 22 years, as a gain in the dollar curbed the appeal of US supplies. Corn and soybeans headed for a fourth straight monthly loss.

Wheat for December delivery was down 1.5 cents at $5.365 a bushel in electronic trading in Chicago by 4.19 pm Singapore time after losing 4.1% on Thursday as a government report showed the pace of US exports had slowed. Wheat has fallen 60% from a record $13.495 on February 27.

World wheat production will rise 12%, to a record 683 million tonne in the year to June 2009, up from 610 million tonne in the past year, the International Grains Council said on Thursday.

Rubber futures reached a three-year low of 154.6 yen on October 28, plunging 57% from a 28-year high of 356.9 yen on June 30, when record-high oil boosted investor demand for commodities as an inflation hedge. If it was a bad October for farm commodities, it was worse for non-farm commodities, mainly base metals like copper, aluminum and zinc. Copper on the London Metal Exchange has fallen 35% so far in October and is heading for its biggest monthly drop since at least 1977, despite a 10% rise this week.

Inventories monitored by the London Metal Exchange climbed to 223,875 metric tonne on Thursday, the most since March 18, 2004. Supplies have increased 13% in 2008.

By 0638 GMT copper was down 2.5% at $4,095, following a 10% fall in the previous session that came on the heels of a 13% surge on Wednesday. Among other LME-traded metals, aluminum was down 1% at $2,040.25 a tonne, zinc fell 1.6% to $1,141, lead declined 4.5% to $1,451, nickel slipped 5.1% to $11,300, and tin fell 1.7% to $14,400 a ton as of 2.30 pm in Singapore.