Chicago grain prices hike as crude oil surges

Updated: 2011-12-14 09:50

(Xinhua)

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CHICAGO - Chicago grain futures rallied on Tuesday, boosted by sharply higher energy prices as well as market concerns over dry conditions in South America, but a stronger dollar and risk avoidance mentality helped drag down prices.

The most active corn contract for March delivery added 0.5 cents, or 0.1 percent, to close at $5.945 per bushel. March wheat jumped 6.25 cents, or 1.1 percent, to 6.005 dollars per bushel. January soybean rose 6.5 cents, or 0.6 percent, to close at 11.185 dollars per bushel.

Grain prices opened higher on Tuesday, as crude oil surged after reports showed Iran might shut down oil transportation channel while investors had expected more monetary stimulus of the Federal Reserve.

Meanwhile, market participants also believed that growing conditions for corn in Argentina have become increasingly stressful with dry weather forecast for much of next week.

But grain prices were forced to give back most of the earlier gains as dollar firmed, with investors continued to dump risky assets for cash amid increasing concerns over Eurozone debt problems.

According to a Ukraine research Company, the winter wheat in Ukraine that has emerged was 22 percent smaller than a year ago by December 8 after the driest autumn in at least 50 years, which helped add upward pressure on wheat prices.