Non-energy commodity prices rose 1.4 percent in June, up for the sixth straight month, on strong gains in agriculture prices which were partly offset by further declines in metals prices. For the first half of 2008, non-energy commodity prices rose 32 percent, with a 29 percent jump in agriculture prices, 16 percent increase in metals prices, and a more than doubling of fertilizer prices—the latter due to  higher crop plantings and capacity constraints.       

Crude oil prices rose 7.2 percent in June, to average $131.5/bbl, and surged in early July with WTI trading above $145/bbl. Prices have been driven higher by low stocks and sluggish supply growth. In addition, a very tight middle distillate market is causing refiners to bid up the prices of light crudes, such as WTI. New ultra-low sulfur diesel requirements and emergency power generation needs in Australia, South Africa and South America—coupled with China’s surging distillate imports—have all contributed to the tightness in the diesel market.

Agriculture prices surged 4.0 percent in June, up for the 15^th straight month, with strong gains among all the main groups. The largest increase was an 18 percent jump in maize prices due a large drop in U.S. plantings that may be further affected by recent flooding in the Midwest. The entire soybean complex rose 6-10 percent, partly due to the effects from flooding and strong global demand for food, feed and biofuels. Only rice recorded a large decline, falling 14 percent from its recent spike, on favorable prospects for new crops.    

Metals and minerals prices declined 2.1 percent in June, with most metals dropping for the second straight month on slowing demand and improving supply prospects. Lead prices plunged 17 percent due to both rising stocks and production prospects, while zinc prices fell 13 percent on higher inventories and expectations of strong growth in production. Prices for energy-intensive aluminum rose 2 percent on concerns about the availability and pricing for electric power, and have moved sharply higher in July on announced production cuts in China.