Grains and beans drop on concerns Gulf of Mexico oil spill could shut down shipping channels

Grains and beans fall on oil spill concerns

NEW YORK — Grain and bean prices fell Monday as investors worried that an oil spill in the Gulf of Mexico might hinder shipments of the crops.

Corn, wheat and soybean prices all dropped as uncertainty grows about whether the oil spill might shut down a major shipping passage from the Mississippi River. Jason Ward, an analyst with Northstar Commodity in Minneapolis, said there is no guarantee the shipping passage out of the Mississippi River, called the Southwest Pass, will be open beyond Tuesday. A closure of the route would put a serious dent in farmers’ abilities to export crops.

That hurts the price of the crops at a time when foreign buying was picking up.

“We could lose business,” Ward said. Demand could drop as buyers look to other countries to purchase grains like corn, Ward added.

Wheat for July delivery fell 1.25 cents to settle at $5.0175 a bushel. June soybeans dropped 12.5 cents to $9.865 a bushel, while corn dropped 3.75 cents to $3.715 a bushel.

Not all commodities were being hurt by the oil spill. Lean hog and live cattle prices crept higher as fishing areas in the Gulf of Mexico continued to be shut down, potentially crimping supplies of fish.

“If fish prices rise, then consumers might shift to red meat,” said Mark Schultz, chief analyst at Northstar Commodity.

Lean hogs for June delivery rose 0.575 cents to settle at 86.90 cents per pound, while live cattle climbed 1.3 cents to 95.525 cents per pound.

The oil spill’s potential to shut down the main route to the Mississippi River also helped energy prices. If shipping lanes are shut down, it would cut down imports of oil and other energy products. The lack of supply would further boost the price of oil, which is already hovering nearest its highest levels since late 2008.

Benchmark crude for June delivery climbed 4 cents to $86.19 a barrel on the New York Mercantile Exchange. In other Nymex trading in June contracts, heating oil rose 2.94 cents to $2.3451 a gallon, and gasoline added 3.57 cents at $2.4351 a gallon. Natural gas gained 8 cents to settle at $4 per 1,000 cubic feet.

Elsewhere, the metal prices were mixed. Gold for June delivery rose $2.60 to settle at $1,183.30 an ounce. July silver rose 20.1 cents to $18.84 an ounce.

July copper dropped 65 cents to $3.2935 a pound after China said it would force banks to hold greater reserves. China has been trying to slow down its economy to avoid speculative bubbles, especially in the real estate market. China is one of the biggest importers of copper, using its extensively as it builds infrastructure, so any attempt to scale back building in the country would hurt the price of copper.

July platinum fell $16.20 to settle at $1,728.90 an ounce, while palladium for June delivery fell $7.50 to $548.25 an ounce.