Grains, beans rise on consumer demand

AP News
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Posted: Jun 28, 2011 4:52 PM
Grains, beans rise on consumer demand

Grains and soybean contracts rose Tuesday as commercial customers like livestock producers took advantage of relatively low prices to buy supplies for animal feed.

While corn is still about twice as expensive as it was a year ago, it's more affordable compared to earlier this month. Corn went as high as $7.99 a bushel in early June. That high price kept many ethanol and livestock producers out of the market

On Tuesday corn for December delivery settled at $6.53 a bushel, up 26.25 cents from the day before but 18 percent below the high it reached on June 10.

November soybeans rose 4 cents to $13.19 a bushel. September wheat rose 21 cents to settle at $6.7175 a bushel.

Grain prices have been rising this year on concerns that supplies would be tight because of poor growing conditions. Prices fell over the past two weeks as the weather in growing regions improved. That prompted traders to raise their estimates for how big this year's crops would be, causing some speculators to dump grain contracts that no longer seemed as likely to appreciate.

Now corn and soybeans look like a bargain for commercial customers who, unlike speculators, actually take delivery of the crops and use them to make feed for livestock or ethanol. Increased demand from commercial customers pushed prices higher on Tuesday, said Jason Ward, an analyst with Northstar Commodity in Minneapolis.

"These guys who use corn ... they can now afford to feed to their (animals) and make a profit," Ward said.

Traders also expect that a government crop report due out Thursday will show declines in the amount of farmland planted with corn and wheat.

Gold for August delivery rose $3.80 to settle at $1,500.20 an ounce. July silver gained 5.3 cents to settle at $33.638 an ounce. July copper rose 4.05 cents to settle at $4.092 a pound and July platinum gained $18.70 to $1,691.7 an ounce. September palladium gained $10.55 to $735.15 an ounce.

Oil prices rose on increasing optimism that Greece will be able to contain its debt crisis.

Benchmark crude for August delivery rose $2.28 to settle at 92.89 per barrel on the New York Mercantile Exchange.

In other Nymex contracts, heating oil rose 6.01 cents to settle at $2.8415 per gallon, gasoline rose 7.12 cents to $2.8156 per gallon and natural gas rose 1.01 cents to $4.357 per 1,000 cubic feet.