Corn Records Healthy Gain on Demand Expectations

Corn prices shot up 6.2 percent Friday on expectations that demand from users such as livestock owners and ethanol producers will strengthen while the grain remains in short supply.

Commercial users of corn joined other investors in buying futures contracts a day after two government reports indicated supplies will remain short even if farmers harvest a good crop this year.

The Agriculture Department predicted farmers will plant about 92.2 million acres of corn in the upcoming planting season.

Although that's a 5 percent increase, the agency also said supplies continue to shrink. Corn stockpiles fell 15 percent to 6.52 billion bushels on March 1 compared to a year ago.

"We are at very critically tight levels," Telvent DTN analyst John Sanow said.

He predicted supplies will remain short even if there is a good harvest this year because of strengthening demand, primarily from ethanol producers and livestock owners.

Corn for May delivery rose 42.75 cents to settle at $7.36 a bushel. May wheat prices fell 3.75 cents to settle at $7.595 a bushel and soybeans lost 16.50 cents to settle at $13.9375 a bushel.

In other trading, copper and platinum fell after the Institute for Supply Management said U.S. manufacturing activity slipped last month but was still growing.

Earlier, China said its manufacturing sector improved in March on stronger demand for autos and machinery.

Copper for May delivery fell 4.9 cents to settle at $4.2585 a pound and July platinum fell $6.30 to settle at $1,776.90 an ounce. Both metals are used in manufacturing a variety of consumer products.

In June metals contracts, palladium added $7.15 to settle at $775.05 an ounce, gold lost $11 to $1,428.90 an ounce and silver fell 15.6 cents to $37.732 an ounce.

Meanwhile, oil prices rose after the Labor Department reported the U.S. economy added 216,000 jobs last month, and the unemployment rate fell to 8.8 percent, the lowest level in two years.

Benchmark crude rose $1.22 to settle at $107.94 a barrel on the New York Mercantile Exchange.

In other Nymex contracts for May, heating oil rose 2.2 cents to settle at $3.1345 per gallon, gasoline gained 4.36 cents to settle at $3.1513 per gallon and natural gas fell 2.7 cents to settle at $4.362 per 1,000 cubic feet.

(Source: http://abcnews.go.com/Business/wireStory?id=13276962&page=2)