Wheat, corn prices rise as export sales increase

Wheat and corn prices rose Friday after the government reported large increases in export sales of the two grains.

Prices for wheat and corn each settled up 3.7 percent. The two led a broad rally in commodities after oil prices stabilized, even as protests continued in Libya and nearby countries. That prompted investors to look for bargains among agricultural products and metals markets, where prices have slipped in the past week.

The U.S. Agriculture Department said wheat export sales totaled 1.15 million metric tons and corn export sales totaled 1.65 million metric tons last week. Both numbers were higher than analyst expectations.

Export sales of soybeans totaled 252,600 metric tons, which was lower than predicted.

Global supplies for corn and soybeans remain tight. Stockpiles of wheat are at a comfortable level worldwide but there is a perception that they could shrink because of adverse weather affecting winter wheat crops, Northstar Commodity analyst Jason Ward said.

In the Great Plains region, winter wheat crops may have been hurt by drier conditions and frigid weather.

About 60 percent of the crop in Texas is in poor to very poor condition and roughly 15 percent is rated good, Ward said. Reports are expected from Oklahoma and Kansas in early March.

A drought also has affected about 18 million acres of China's wheat crop although the government has said it has adequate reserves to satisfy demand.

Traders are waiting for a USDA report due out next month that will detail what crops farmers plan to plant this spring.

In contracts for March delivery, wheat rose 28.75 cents, or 3.7 percent, to settle at $8.1125 a bushel, corn gained 25.5 cents, or 3.7 percent, to $7.22 a bushel and soybeans added 45.75 cents, or 3.4 percent, to $13.75 a bushel.

In energy trading, oil settled slightly higher as refineries in Europe prepared for a sustained loss in high-quality Libyan crude.

The rebellion has all but shut down exports from Libya. Traders say it is difficult to gauge how much of the global supply will be affected as protests unfold in other parts of the Middle East and North Africa.

Benchmark oil for March delivery rose 60 cents to settle at $97.88 a barrel on the New York MercantileExchange.

In Nymex trading in March contracts, heating oil added 5.23 cents to settle at $2.9455 per gallon and gasoline rose 3.37 cents to $2.9086 per gallon. Natural gas gained 13.3 cents to settle at $4.005 per 1,000 cubic feet.

Metals used primarily in manufacturing logged gains while precious metals settled lower.

In contracts for March delivery, copper added 10.95 cents to settle at $4.436 a pound and palladium gained $7.70 to $785.45 an ounce. April platinum rose $16.60 to settle at $1,803.40 an ounce.

April gold lost $6.50 to settle at $1,409.30 an ounce and March silver fell 26.8 cents to $32.898 an ounce.

(Source: http://news.yahoo.com/s/ap/20110225/ap_on_bi_ge/us_commodities_review_8)