Associated Press

Corn prices are climbing on expectations that farmers will harvest a smaller crop than initially anticipated this fall because of damage from the summer's blistering heat wave.

Corn ended about 1 percent higher after the U.S. Agriculture Department estimated that production will be 12.5 billion bushels this season. That's about 3 percent less than its August forecast.

Yield is expected to be 148.1 bushels per acre, about 4.9 bushels per acre less than the previous forecast. It's also 16.6 bushels less than the record set in the 2009/2010 growing season. If the forecast holds, supplies will be very tight both globally and in the United States, Telvent DTN analyst John Sanow said.

U.S. farmers planted the second-largest crop since World War II last spring after smaller reserves sent prices up 52 percent in 2010. Prices have climbed an additional 18.5 percent this year.

The agriculture agency also increased its forecast for supplies of soybeans and wheat at the end of next summer. Both products are at comfortable supply levels, Sanow said.

December corn rose 9 cents to finish at $7.455 a bushel, December wheat fell 2.5 cents to $7.2725 a bushel and November soybeans dropped 30.75 to $13.96 a bushel.

Other commodities were mixed as investors worried that Greece could face a default on its debt, which could lead to more volatility in global financial markets. There also are concerns that rating agencies may cut the credit ratings on French banks that hold Greek bonds.

Gold for December delivery fell $46.20 an ounce to end at $1,813.30 an ounce. George Gero, vice president at RBC Global Futures, expects the price to continue to fall.

"The selling is never over in one day," he said. "It can be good for bargain hunters but I think when you have this sort of selling there's usually follow-through selling the next day as well."

The drop in gold prices weighed on other metals. December silver fell $1.407 to finish at $40.217 per ounce, December copper fell 3.7 cents to finish at $3.9655 per pound, October platinum dropped $28.50 to $1,809.40 an ounce and December palladium declined $27.25 to $711.35 an ounce.

In energy trading, benchmark oil rose 95 cents to end at $88.19 per barrel on the New York Mercantile Exchange. Heating oil fell 3.83 cents to finish at $2.9475 per gallon, gasoline futures fell 3.28 cents to $2.7382 per gallon and natural gas fell 3 cents to end the day at $3.885 per 1,000 cubic feet.

Copyright 2011 The Associated Press.

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