NEW YORK (AP) -- Corn prices extended their rally Monday amid heightened concerns about tight supplies even as demand remains strong from ethanol producers, livestock owners and overseas buyers.

Corn rose 27.5 cents, or 5.2 percent, to settle at $5.5575 a bushel. It was the third straight gain for corn, which is at its highest price since the recession intensified in the fall of 2008.

Much of the trading action was driven by a U.S. Agriculture Department report issued Friday that lowered this year's production estimate to 12.7 billion bushels from last year's record of 13.1 billion bushels. Yields were forecast at 155.8 bushels per acre, compared with 164.7 bushels per acre a year ago.

Meanwhile, more overseas buyers are turning to U.S. corn to help feed their livestock after a drought ravaged Russia's wheat crop, including grains used to feed cattle and hogs. In addition, there is strong demand among ethanol producers and domestic livestock owners.

Barclays Capital analysts said in a report issued Monday that U.S. corn production is on track for the third-highest level on record. At the same time, high consumption levels and demand for corn exports is taking U.S. corn supplies to their lowest levels in 14 years.

"The global corn market ... suddenly finds itself on thin ice," the report concluded.

The impact of higher corn prices eventually may result in higher prices for bread and other products, but manufacturers and wholesalers also factor in other costs, such as labor and delivery, said Greg Grow, an Archer Financial Services broker who specializes in grains and livestock.

"The raw commodity price can be absorbed by wholesalers and manufacturers to a degree, but it will undoubtedly place upward momentum on wholesale and then retail prices for foods," he said.

In other grains contracts, November soybeans rose 17.5 cents to settle at $11.5250 a bushel while December wheat lost 10 cents to $7.0925 a bushel.

In December metals contracts, gold for December delivery rose $9.10 to settle at another record high of $1,354.40 an ounce; silver gained 24.4 cents to settle at $23.349 an ounce; copper added 1.5 cents to settle at $3.7895 a pound and palladium gained $1.15 to $588.75 an ounce.

Platinum for January delivery lost $17.90 to settle at $1,690.80 a pound.

Oil prices slipped Monday as the dollar strengthened and traders hunkered down ahead of some important economic news, due out later this week. Since crude and other commodities are priced in dollars, a stronger dollar makes crude, priced in dollars, less attractive to investors who buy it with other currencies.

Benchmark crude for November delivery dropped 45 cents to settle at $82.21 a barrel on the New York Mercantile Exchange.

In other Nymex trading, heating oil fell .29 cent to settle at $2.2790 a gallon, gasoline added 1.43 cents to settle at $2.1655 a gallon and natural gas lost 5 cents to settle at $3.601 per 1,000 cubic feet.

Copyright 2010 The AP.

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