Wheat, corn prices jump on new supply forecasts

AP News
Posted: Jul 12, 2011 4:25 PM
Wheat, corn prices jump on new supply forecasts

Wheat and corn prices rose sharply Tuesday after the government released stockpile estimates that were lower than analysts had expected.

Both grains also benefited from concerns about hot weather that could affect crops in key farming states. Wheat rose 5.1 percent while corn was up 4 percent. Other commodities mostly settled higher.

The U.S. Agriculture Department predicted wheat stocks would fall 17 million bushels to 670 million bushels by next May. Analysts had anticipated the total to be about 716 million bushels, Global Commodity Analytics & Consulting LLC President Mike Zuzolo said. Corn stockpiles were forecast at 880 million bushels, which was also below analysts' expectations.

Wheat for September delivery rose 32.75 cents to $6.72 a bushel and December corn gained 25.25 cents, or 4 percent, to settle at $6.58 a bushel. November soybeans rose 11.25 cents to settle at $13.5825 a bushel.

In other trading, Europe's ongoing financial crisis sent many commodities higher but for different reasons.

Gold prices continued to climb because of lingering uncertainty about how European leaders will handle a bailout package for Greece, Portugal's debt crisis and Spain's fiscal troubles.

Gold for August delivery gained $13.10 to settle at $1,562.30 an ounce. The precious metal is considered a stable store of value that investors buy when they are worried about instability in other markets.

Oil and industrial metals rose after some investors were encouraged by the prospect that Italy may accelerate plans to implement austerity measures, which could ease at least some of Europe's problems.

Copper for September delivery rose 2.35 cents to settle at $4.3915 a pound and September silver fell 6.4 cents to settle at $35.634 an ounce. October platinum gained $8 to $1,736.30 an ounce and September palladium was unchanged at $767.45 an ounce.

Oil rose as the Organization of Petroleum Exporting Countries and the Energy Information Administration reaffirmed their views that the global appetite for oil will grow to record levels this year.

Benchmark crude for August delivery gained $2.28 to settle at $97.43 per barrel on the New York Mercantile Exchange.

In other Nymex contracts, heating oil rose 0.01 cent to settle at $3.0876 per gallon, gasoline gained 2.77 cents to $3.0982 per gallon and natural gas rose 3.5 cents to $4.312 per 1,000 cubic feet.