MercoPress. South Atlantic News Agency

Falling crude prices drive commodities to sharp fall

Commodities fell sharply Monday as another big drop in crude prices prompted traders to shed copper, corn and other hard assets as alternative investments.

Crude tumbled as much as 5 US dollars a barrel during the day on a host of bearish news items, chief among those investors' belief that Tropical Storm Edouard wouldn't damage oil and natural gas facilities in the Gulf of Mexico. Corn futures sank to their lowest level in more than four months as traders who bought the grain as an inflation hedge began unloading their positions. Corn for December delivery 29.5 cents settled at 5.555 US dollars a bushel on Chicago Board of Trade the lowest settlement price since March 24. The contract has plunged 30% from June highs reached after floods devastated parts of the US Midwest, driven lower in recent weeks by warm, dry weather that has reinvigorated crops. Other grains also traded lower. Soybeans for November delivery dropped the maximum 70-cent limit to settle at 12.95 US dollars a bushel on the CBOT, while September wheat lost 35.25 cents to settle at 7.5875 a bushel. Oil initially turned lower after the US Commerce Department reported that consumer spending fell in June as shoppers dealt with higher prices for gasoline, food and other items. That bolstered analysts' arguments that a US economic slowdown is forcing US citizens to scale back on energy use. Light, sweet crude for September delivery fell 3.69, or 2.9%, to settle at 121.41 a barrel on the New York Mercantile Exchange. Earlier, prices plummeted more than 5 dollars to 119.50, the lowest level since May 6. Crude has now fallen in six of the last nine sessions and 18% from its trading record of 147.27 US dollars reached July 11. On Monday, the price of platinum hit six-month lows as falling car production hit demand for emission control devices, its largest market. Meanwhile, rubber prices - the main raw material for tires hit two-month lows. Copper, lead and zinc - all used in the industrial sector - have seen their prices fall in recent days with many blaming falling demand from the previously red-hot Chinese economy.