Commodities Watch: Corn Price Sets New Record; Cocoa Prices Falling; WTI Crude Could Drop Significantly (DBA, MOO, TSN, SFD, HRL, DE, CNH, AGCO, MOS, HSY, KFT, GLD, SLV, GDX, GDXJ, SIL, USO)

Time for our daily look at the world of commodity prices and key developments. Corn futures continue their seemingly inexorable march toward $8/bushel as wet and windy weather in the US Midwest threatens to stifle spring planting. Demand for corn points to a 2011 year-end supply of just four days, despite projected near-record acreage planting.

Rising corn prices, now above $7.66/bushel, is almost certain to drive cattle prices higher because ranchers are not increasing their herd sizes as they normally would with rising cattle prices because corn prices are rising faster. The PowerShares DB Agriculture ETF (NYSE: DBA) and the Market Vectors Agribusiness ETF (NYSE: MOO) are both trading essentially flat so far today.

Other ag-related stocks are also showing little movement today. Tyson Foods Inc. (NYSE: TSN), Smithfield Foods Inc. (NYSE: SFD), and Hormel Foods Corp. (NYSE: HRL) are trading essentially flat. Farm equipment makers Deere & Co. (NYSE: DE), CNH Global N.V. (NYSE: CNH), and AGCO Corp. (NYSE: AGCO) are all trading down about -1%. Fertilizer maker Mosaic Co. (NYSE: MOS) reported earnings today, and missed revenue expectations. However, the company sold 2.4 million tons of its phosphate fertilizers at $543/ton, way above last year’s sales price of $336/ton. The company also guided phosphate sales between 2.5 and 2.9 million tons for its fourth fiscal quarter ending in May.

Cocoa prices continue their slide as United Nations and French troops supporting the elected president of Ivory Coast, Alassane Ouattara, are negotiating with forces of the outgoing president, Laurent Gbagbo, who refused to relinquish power. Cocoa futures have fallen from a high of $3,775/ton early this month to $2,982, and the drop is expected to continue as hundreds of thousands of tons of cocoa in Ivory Cost warehouses are released into the market.

Chocolate makers Hershey Co. (NYSE: HSY) shares are up more than 1% today. The world’s largest maker of bulk chocolate, Swiss-based Barry Callebaut AG, said earlier that it would be able to meet its contractual obligations to Hershey, Nestle SA, and Kraft Foods Inc. (NYSE: KFT) without relying on Ivory Coast supplies.

Gold and silver are also continuing to set record highs. Gold is trading above $1,450/ounce, and silver has risen to more than $39/ounce. The SPDR Gold Shares ETF (NYSE: GLD) is up more than 1% today, and the iShares Silver Trust (NYSE: SLV) is up more than 1.5%. Gold miners are faring better, with the Market Vectors Gold Miners ETF (NYSE: GDX) up about 3.5% and the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) up about 3.75%. The Global X Silver Miners ETF (NYSE: SIL) is up about 3% as well.

West Texas Intermediate crude is off slightly, to below $108/barrel, while Brent crude is up to more than $122/barrel. The WTI price could fall further as the United States Oil ETF (NYSE: USO) begins to rollover its contracts tomorrow. WTI is priced at delivery at the storage facility in Cushing, Oklahoma, which is absolutely full to the top. Because the USO rolls its contracts forward every month, more oil that could presumably flow into the tanks at Cushing have to go somewhere else. Either refiners have to take the barrels or the barrels have to be exported. In either event, WTI prices are almost certain to fall. The question, of course, is by how much.

Paul Ausick