NEW YORK (AP) — Corn futures surged near a record high Tuesday after crude oil spiked above $122 a barrel and forecasts for more rain in the U.S. corn belt threatened to put farmers further behind in their planting schedule.
Oil's rally helped lift other commodities, with gold, silver, wheat and rice futures all trading higher.
As crude oil climbs further into record territory, gas and alternative energy markets have also risen, boosting profits for U.S. ethanol makers who use corn as their basic feedstock.
"You use 3 billion bushels of corn to make ethanol, and with the rally in the energy futures, your ethanol plants become more profitable," said Roy Huckabay, analyst and executive vice president for the Linn Group in Chicago.
Corn for July delivery added 12.25 cents to settle at $6.0625 a bushel on the Chicago Board of Trade, after earlier rising as high as $6.22, just below the contract high of $6.2875.
Also pushing up prices were forecasts for light rain in the western U.S. corn belt states of Iowa, South Dakota and Minnesota. Weeks of heavy rainfall have already left fields too soggy for heavy machinery, leaving only 27 percent of this year's corn crop planted so far — the slowest pace since 1995, the U.S. Department of Agriculture said in a report Monday.
"The fields are still too wet. Everybody's is working is hard as possible to get their corn planted before more rain comes," said Jason Ward, analyst with Northstar Commodity in Minneapolis.
Meanwhile, rice futures also rose Tuesday after a catastrophic cyclone wiped out vast swaths of Myanmar's rice-growing areas. Myanmar grows 11 million tons of rice per year and was forecast to export 400,000 tons this year, representing about 1.7 percent of world trade, according to USDA figures released last month.
Concerns that the Asian country may not meet export demand helped push U.S. rice futures 10 cents higher to settle at $21.10 per 100 pounds Tuesday on the Chicago Board of Trade.
Other agriculture futures traded mixed. Wheat for July delivery added 12.5 cents to settle at $8.18 a bushel on the CBOT, while July soybeans gave up 9 cents to settle at $12.77 a bushel.
In energy markets, crude oil shot above $122 a barrel as investors snapped up futures on forecasts of rising prices and a weaker dollar. Goldman Sachs & Co. issued a report predicting that oil prices could rise to $150 to $200 within two years, apparently sparking the rally.
Light, sweet crude for June delivery jumped to a new record of $122.73 a barrel before retreating to settle up $1.87 at a record $121.84 on the New York Mercantile Exchange.
Other energy futures also traded higher. June gasoline futures rose 5.26 cents to settle at $3.1055 a gallon after earlier setting a new trading record of $3.126. June heating oil futures rose 4.7 cents to settle at $3.3535 a gallon after rising to their own trading record of $3.3712.
In precious metals, gold futures rose Tuesday after the dollar weakened, boosting the metal's appeal as a hedge against inflation.
Gold for June delivery rose $3.60 to settle at $877.70 on the New York Mercantile Exhange.
July silver futures gained 3 cents to settle at $16.86 on the Nymex, while July copper futures ended 6.9 cents lower to settle at $3.8785.