Corn surges on lingering questions about supply
By SANDY SHORE
A rally in corn prices showed little sign of slowing Tuesday amid lingering questions about whether tight supplies will meet global demand.
Corn for December delivery added 23.25 cents to settle at $5.79 a bushel after hitting $5.84 a bushel earlier in the day. The price has gained 90.5 cents since Wednesday's settlement and is at the highest level since 2008.
The rally was triggered by a government forecast issued last week that lowered production and yield estimates for this year's crop. Corn is a key commodity because of its use in the gasoline additive ethanol and as livestock feed as well as U.S. export.
John Sanow, an analyst with Telvent DTN, said Tuesday's trading was driven largely by non-commercial buyers. "They have no reason at this point not to keep buying with concerns over future stocks meeting needs," he said.
Soybeans benefited from corn's rally even though supplies are at a comfortable level both in the United States and globally, Sanow said.
November soybeans rose 26 cents to settle at $11.7850 a bushel while December wheat added 0.75 cent to $7.10 a bushel.
Other commodities were mixed as the dollar grew stronger against other currencies. Since commodities are priced in dollars, a stronger dollar makes them less attractive to foreign investors.
Most commodity prices settled before the Federal Reserve released the minutes of its September meeting, which indicated the policymakers were nearing a consensus on what steps to take to stimulate the economy.
Traders and investors are hoping for more details after the Fed meets in early November.
Gold for December delivery retreated from its record high, settling down $7.70 at $1,346.70 an ounce.
In other December metals contracts, silver lost 20.2 cents to settle at $23.147 an ounce; copper was unchanged at $3.7895 a pound and palladium fell $8.10 to $580.65 an ounce.
Platinum for January delivery dropped $7.50 to settle at $1,683.30 a pound.
In energy trading, crude retreated on a stronger dollar and expectations that Organization of Petroleum Exporting Countries will hold production at current levels when it meets later this week to discuss its official policy.
Benchmark crude for November delivery slipped 56 cents to settle at $82.45 a barrel on the New York Mercantile Exchange.
In other Nymex trading in November contracts, heating oil lost 1.65 cents to settle at $2.2625 a gallon, gasoline fell 4.16 cents to settle at $2.1239 a gallon and natural gas gained 2.8 cents to settle at $3.629 per 1,000 cubic feet.
Copyright 2010 The AP.