Commodities markets suffered significant declines in the third quarter.

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Commodities markets suffered significant declines in the third quarter.

Since late June, prices for corn and other grains, natural gas and oil have dropped after rising for several years.

Lower costs for commodities could boost U.S. corporations’ fourth-quarter profit margins.

Still, economic uncertainty amid financial turmoil makes demand hard to predict. This could cause heightened volatility in commodities prices, writes Barclays Capital analyst Gayle Berry in a report.

The Dow Jones-AIG commodity index is down 9.3 percent this year. But some improvement, especially in energy and precious metals, came in late September amid credit-market distress.

Investors frequently pour into gold during troubled times. It recently rose back to around $900 an ounce after falling near $700.

Oil prices have dropped from a high of about $148 a barrel on July 11. Regis Collieux, senior oil analyst at BNP Paribas, says declining oil consumption and the risk of a further economic slowdown could continue to pressure oil prices. Natural-gas prices are down even more sharply for the third quarter.

A weaker demand outlook due to poor economic sentiment has weighed on metals prices. Industrial metals like copper and aluminum are typically used in manufacturing and infrastructure development, and prices suffered as the outlook for global growth cooled.

Despite slipping recently, prices for agricultural commodities remain high. Biofuel demand is still strong and inventories continue to be low. Prices for corn and soybeans are also still high, boosting food costs for consumers.

Wheat prices, down more than 20 percent for the quarter, are not expected to recover, as farmers anticipate a record global harvest in 2008.

Cotton prices started strong this year but have since dropped. U.S. cotton production has the potential to fall to historically low levels next year, according to Barclays.