Grains rally as livestock and ethanol producers snap up bargains; gold hits new record

Grains rally as gold hits new record

Grain and bean prices rallied Tuesday, led by a sharp jump in corn futures as ethanol and livestock producers snapped up supplies that were relatively low after last week’s sell-off.

Corn prices rose 19.5 cents to settle at $4.91 a bushel. Soybeans for November delivery rose 17.75 cents to $10.7175 a bushel. Wheat for December delivery rose 16.25 cents to settle at $6.635 a bushel.

Corn prices had fallen last week after a government report surprised traders by estimating corn inventories were much higher than expected. As traders backed out of their position, corn fell to prices that were attractive to “end users” like feedlots and biofuels producers, said Jason Ward, an analyst with Northstar Commodity in Minneapolis.

“These end-users were just waiting in the wings to buy,” Ward said. “They came flooding in.”

Last week’s report from the U.S. Department of Agriculture said corn stocks totaled 1.71 billion bushels as of Sept. 1 on farms, and at mills, warehouses, elevators and similar places. Most analysts had predicted the stocks would be about 1.4 billion bushels, Ward said.

Wheat and bean price rallies were largely driven by the run-up in corn, he said.

In other trading, gold prices rallied to hit a new record high after losing some ground Monday.

Gold for December delivery rose $23.50 to settle at $1,340.30 an ounce Tuesday, breaking the record high of $1,322 an ounce during trading Friday.

Other metals rose in gold’s wake. Silver followed gold higher as it has regularly tracked the price of gold in recent months. December silver rose 70.1 cents to settle at $22.737 an ounce. Copper also rose, gaining 6.25 cents to $3.7265 a pound.

October palladium added $16.90 to settle at $578.20 an ounce and October platinum settled up $27.80 to $1,695.50 a pound.

Oil prices edged higher as the stock market rebounded.

The Dow Jones Industrial Average was up about 200 points in afternoon trading after the Institute for Supply Management said the U.S. services industry grew last month. Stocks worldwide got a lift as Japan’s central bank cut interest rates to near zero to boost that country’s economy.

Benchmark crude for November delivery rose $1.35 to settle at $82.82 a barrel on the New York Mercantile Exchange.

In other Nymex trading, heating oil rose 1.79 cents to settle at $2.3026 a gallon, and gasoline rose 3.22 cents to settle at $2.1255 a gallon. Natural gas rose 16 cents to settle at $3.743 a gallon.