Chicago agricultural products drop as market bets on China interest rate hike

14:45, November 13, 2010      

Email | Print | Subscribe | Comments | Forum 

Chicago agricultural products concluded the week with a sharp drop as market expected that China will raise interest rates soon. Soybeans fell from a 26-month high, corn suffered the sixth straight drop and wheat declined the most in three months.

The most active corn contract for December delivery dropped 30 cents, or 5.3 percent, to 5.48 U.S. dollars per bushel. December wheat declined 34.6 cents, or 4.9 percent, to 6.6915 dollars per bushel. January soybean shed 70 cents, or 5.2 percent, to 12.69 dollars per bushel.

Market traders noted that the speculation of China's continuing tightening of its monetary policy hammered commodity markets, as China's interest rate rates hike would increase the chances for slowdown in demand.

China's October's CPI, a major gauge of inflation, hiked 4.4 percent from the same period of last year, triggering wide speculation that the central bank will lift the interest rate.

China's central bank on Nov. 10 decided to raise the reserve requirement ratio by 0.5 percentage points as of Nov. 16, a measure to tight money supply in the banking system. Besides, it lifted the yield in the 1-year central bank bill, a beacon of its benchmark 1-year deposit interest rate.

A trader noted that China will endeavor to take a more aggressive stance to cool inflation and push speculative money out of commodities. China is the world's biggest consumer of soybeans and wheat, and the second largest user of corn.

As a result, all the three major agricultural products listed on Chicago exchange, or corn, wheat and soybean, suffered a sharp drop on Friday.

Aside from the above negative force, the wheat market was also weighed on by the upcoming rainfall in the U.S. Great Plains, which will improve the prospects of winter wheat crop.

As much as 2 inches (5 centimeters) of rain fell on Thursday in parts of Texas, Oklahoma and central Kansas, the largest winter- wheat state, according to QT Weather. Parts of those states have received 25 percent of normal rainfall in the past 30 days.

Source: Xinhua

(Editor:赵晨雁)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Chinese Navy soldiers hold an evening party marking the upcoming 62nd National Day aboard Chinese Navy hospital ship "Peace Ark" in the Pacific on Sept. 28, 2011. The Chinese National Day falls on Oct. 1. (Xinhua/Zha Chunming)
  • Photo taken on Sept. 30, 2011 shows the crowd at the plaza of Beijing Railway Station in Beijing, capital of China. The railway transportation witnessed a travel peak with the approach of the seven-day National Day holidays on Friday. (Xinhua)
  • A man wearing high-heel shoes takes part in the 3rd annual Walk a Mile in Her Shoes, an event when men literally walk in women's shoes to raise awareness about ending violence against women, at Yonge-Dundas Square in Toronto, Canada, Sept. 29, 2011. (Xinhua/Zou Zheng)
  • Photo taken on Sept. 29, 2011 shows a cargo ship in danger on the sea near Zhuhai City, south China's Guangdong Province. Cargo ship Fangzhou 6 of Qingzhou of southwest China's Guangxi Zhuang Autonomous Region lost control after water stormed into its cabin due to Typhoon Nesat on the sea near Zhuhai Thursday, leaving 12 crew members in danger. Rescuers rushed to the ship and saved them by using a helicopter. (Xinhua)
  • Actress Gong Li poses for L'Officiel Magazine. (Xinhua Photo)
  • Demonstrators from the Occupy Wall Street campaign hold placards as they march in the financial district of New York September 29, 2011. After hundreds of protesters were denied access to some areas outside the New York Stock Exchange on September 17, demonstrators set up a rag-tag camp three blocks away. Zuccotti Park is a campground festooned with placards and anti-Wall Street slogans. The group is adding complaints of excessive police force against protesters and police treatment of ethnic minorities and Muslims to its grievances list, which includes bank bailouts, foreclosures and high unemployment. (Xinhua/Reuters Photo)
Hot Forum Discussion