Corn jumps as wet weather fans supply concerns, oil rises
NEW YORK (AP) — Corn prices jumped Monday as investors bet that more rain in Midwestern states will force farmers to plant less of the crop, tightening supplies and adding to growing food costs for consumers and livestock owners.
Other commodities traded mostly higher, with crude oil rising to a trading record near $120 and gold, silver and copper also gaining.
Corn prices have shot up 26 percent this year amid dwindling stockpiles and surging demand to feed livestock and make alternative fuels such as ethanol.
But the weather has been the biggest factor in recent days, with heavy rain in corn-growing areas leaving fields too soggy to work and putting farmers far behind schedule. More rain is expected in the coming days, meaning farmers may have to plant significantly less corn than planned. U.S. farmers were expected to plant about 86 million acres of corn in 2008, an 8 percent drop from last year.
"These forecasts for additional showers still continue to raise concerns that farmers may not be able to get the full 86 million acres planted. The weather will challenge them to get that done," said Shawn McCambride, analyst with Prudential Financial in Chicago.
Corn for May delivery jumped 22.75 cents to settle at $6 a bushel on the Chicago Board of Trade.
Rising corn prices mean consumers can expect even higher grocery bills for meat and pork, as livestock producers are forced to pass on higher animal feed costs and thin their herd size.
The planting delay has prompted some farmers to consider using their rain-soaked acres for other crops like soybeans, which have a later growth cycle. That prospect sent soybean prices sharply lower Monday, with the May contract plunging 42.25 cents to settle at $12.835 a bushel on the CBOT.
Other agriculture futures traded mixed. Wheat for May delivery added 25.5 cents to settle at $8.26 a bushel on the CBOT, while July rice futures fell 50 cents to settle at $23.68 per 100 pounds.
In energy futures, crude oil briefly surged to a new high because of labor actions that cut crude supplies from the North Sea and Nigeria. Prices later retreated and ended slightly higher after the dollar steadied against major currencies.
Light, sweet crude for June delivery rose to a record $119.93 a barrel in electronic trading on the New York Mercantile Exchange in overnight trading, but later settled at $118.75, up 23 cents.
In other energy futures, May gasoline futures fell 2.3 cents to settle at $3.0307 a gallon on the Nymex, and May heating oil futures fell 0.4 cent to settle at $3.2988 a gallon.
In precious metals trading, the boost in oil prices help lift gold more than $5 as investors bought the metal as an inflation hedge.
Gold for June delivery added $5.80 an ounce to settle at $895.50 on the Nymex.
Other precious metals also traded higher. Silver for May delivery gained 16.3 cents to settle at $17.013 an ounce, while May copper rose 4.05 cents to settle at $3.9155 a pound.
