Commodities fell to a five-year low on speculation abundant supplies and slowing economic growth outside of the U.S. will curb demand for raw materials.

The Bloomberg Commodity Index declined to the lowest since July 2009. Brent oil traded at the cheapest since 2012, wheat, corn and soybeans retreated to four-year lows, and gold slumped to a seven-month low.

Weak economic growth in Europe and Japan is leading to lower energy prices and interest rates in the U.S. at a time when the U.S. corn crop is a record high and U.S. oil production is poised to be the most in 45 years. The euro-area recovery stalled in the second quarter and Japan contracted by the most in more than five years. Food prices fell to the lowest in almost four years as costs of milk and and cooking oils tumbled, the Food & Agriculture Organization said today.

“We have had disappointing growth data,” Kevin Norrish, an analyst at Barclays Plc in London, said today by phone. “Growth now looks a bit less promising and supplies in many commodities are quite robust.”

Brent rose 4 cents to settle at $98.08, after falling as much as 1.4 percent to $96.72 a barrel, the lowest since July 2, 2012. Copper retreated 0.5 percent to $6,835 a metric ton and wheat fell to the lowest price since July 2010.

‘Buying Opportunity’

“It may be a buying opportunity for consumers,” said Jodie Gunzberg, global head of commodities at S&P Dow Jones Indices, part of McGraw Hill Financial Inc., in an interview in London yesterday. “The question going forward is have supplies been replaced for agriculture and energy enough to create a persistent excess?”

Prices have come down as stockpiles declined, leading to the buying opportunity, she said. Copper inventories in warehouses monitored by the London Metal Exchange dropped 57 percent this year. “Demand from companies for commodities should pick up,” she said.

Gold futures dropped as much as 0.8 percent to $1,235.30 an ounce on the Comex in New York, the lowest since Jan. 23. Prices have declined 11 percent from this year’s high as the U.S. economy gained traction. Demand for a haven declined after tensions in Ukraine and the Middle East eased. Global holdings in ETPs backed by gold declined in four of the past five months. Silver slumped as much as 1.9 percent to the lowest since June 2013.

Dollar Strength

“The strong wall of dollar strength and prospects of a rate hike are pushing gold lower,” Ira Epstein, the president of his namesake division at the Linn Group Inc. in Chicago, said in a telephone interview. “The outlook for gold is very weak in the absence of an escalation of violence” in Ukraine or the Gaza Strip, he said.

An index of 55 food items dropped 3.6 percent in August to 196.6 points, the lowest since September 2010, the United Nations’ Rome-based FAO said. The agency’s gauge of dairy prices slumped 11 percent and the vegetable-oil price index declined 8 percent to the lowest since November 2009, the FAO said.

Cotton, soybean, corn and wheat prices fell into bear markets this year as farmers in the U.S., the largest grain grower, prepare to collect what the government predicts will be record harvests. In the past three years, all agricultural values on the Bloomberg Commodity Index other than cattle and hogs have declined, led by corn, soybean oil and sugar.

Grains Outlook

“I don’t think we’ve seen the bottom yet,” Abdolreza Abbassian, a senior economist at the FAO, wrote in an e-mailed reply to questions. “Grains could fall further.”

The food index is down 3.9 percent from a year earlier, led by a 19 percent drop in dairy values and a 12 percent slide for the FAO’s grain-price index.

Domestic corn reserves before the 2015 Northern Hemisphere harvest will be 2.002 billion bushels, the U.S. Department of Agriculture said today, topping analyst forecasts for 1.995 billion bushels.

“The weather in most of the U.S. remains wonderfully grain productive,” economist Dennis Gartman wrote in his daily newsletter. “The trends still remain downward and relentlessly so.”

Bloomberg