Associated Press

NEW YORK (AP) -- Corn prices rose Thursday after a monthly Department of Agriculture report showed demand for the crop continued to grow while supplies dwindled.

Corn for July delivery is up 5 cents at $3.4325 a bushel.

John Sanow, an analyst with Telvent DTN in Omaha, Neb., said the USDA's report is proof that demand is strong for corn, particularly from ethanol producers.

The USDA raised its projection for ethanol use based on continued record pace of production of the fuel. While demand for corn rose, supplies fell. The USDA reduced its estimate for ending stocks from the 2009-2010 season.

However, the jump in corn prices could be temporary.

"We still have issues working against us," Sanow said, including what appears to be a sizable crop currently growing. When corn that was planted this spring is harvested in the fall and winter, it could significantly bolster supply and weaken prices.

It would likely take a major weather event destroying corn plants to drive prices to the $4 a bushel level, Sanow said. Corn hasn't traded above $4 a bushel since early January.

Wheat prices tracked corn higher Thursday. Supply and demand for wheat was about inline with expectations, Sanow said. July wheat rose 7.5 cents to settle at $4.355 a bushel.

Soybean prices fell a day after rallying sharply. Like with wheat, the report didn't show any major surprises in supply or demand of the beans. Soybeans for July delivery dropped 8.5 cents to settle at $9.35 a bushel.

Sugar prices got a boost from the USDA report, which showed smaller supplies of the crop. A slowdown in exports out of Brazil and speculation that Middle Eastern buyers are set to re-enter the market have also pushed sugar prices higher, said Spencer Patton, founder and chief investment officer at Chicago hedge fund Steel Vine Investments, which focuses on commodities.

Weather has delayed exports out of Brazil and led to a backup of ships waiting to pick up sugar from the country, Patton said. That slowdown in shipments has caused a temporary disruption in delivery.

Patton also noted there is speculation Mideast buyers are ready to return to the market after prices plummeted from above 30 cents a pound in early February.

Sugar for July delivery rose 0.20 cents to 15.36 cents per pound.

Meanwhile, metal prices were mixed, while energy prices climbed as stocks rallied on upbeat global economic reports.

Gold, which has become a perceived safe-haven alternative to volatile financial markets, slipped as investors jumped into riskier assets. August gold fell $7.70 to settle at $1,222.20 an ounce.

July copper rose 1.25 cents to settle at $2.8625 a pound following the upbeat reports that showed jobless claims in the U.S. fell last week and both imports and exports surged in China last month.

The Chinese report particularly helped copper prices because China is the world's largest importer of copper. Copper prices are highly sensitive to indicators of industrial activity and economic strength.

Benchmark crude for July delivery rose $1.10 to $75.48 a barrel on the New York Mercantile Exchange.

In other July contracts, heating oil rose 2.32 cents to $2.0328 a gallon, while gasoline climbed 3.08 cents to $2.0705 a gallon. Natural gas fell 3 cents to $4.647 per 1,000 cubic feet.

Copyright 2010 The Associated Press.

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