Commodities rise after last week's sell-off

Wheat prices rose Tuesday in anticipation of a government report that is expected to show tightening backup supplies in the United States of wheat and corn.

Crop prices have been climbing after a sell-off last week that also dragged down prices for metals and energy contracts. Traders were betting that Wednesday's report from the U.S. Department of Agriculture will show that increasing demand for crops is outstripping supplies.

Corn rallied early on concerns over tight supplies. But prices fell in the afternoon as investors sold off contracts to lock in gains made since last week's rout, said Jason Ward, an analyst with Northstar Commodityin Minneapolis.

"Basically, since Friday on corn we've rallied 40 cents" a bushel, Ward said. "USDA reports (create) the most uncertain trading days of the year, so it's not uncommon for people who have made money to take it out and sit on the sidelines."

Corn for July delivery fell 0.25 cents to settle at $7.0725 a bushel. Wheat gained 8.25 cents to settle at $7.9875 per bushel, and soybeans added 3 cents to settle at $13.38 per bushel.

The USDA reported last month that it expects there will be about 675 million bushels of corn on hand at the end of this summer, before the harvest begins of the corn crop being planted now. That's about 5 percent of all U.S. corn that was consumed this year, the slimmest surplus margin since 1995.

Tomorrow's report is expected to show higher demand for corn from the U.S. ethanol industry, which has ramped up production as high oil prices boost profit margins. Ethanol makers had cut production over the last two years as low energy prices made it less profitable to blend corn into fuel.

Those economics have changed with oil trading above $100 a barrel. The USDA estimates that ethanol blenders will consume 40 percent of this year's corn crop.

In other trading, metals contracts continued to climb after last week's losses. Gold for June delivery added $13.70 to settle at $1,516.90 an ounce. July silver rose $1.37 to settle at $38.486 an ounce.

July copper rose 2.55 cents to settle at $4.042 a pound. July platinum rose $5.80 to settle at $1,800.90 an ounce and June palladium gained $3.65 to settle at $732.65 an ounce.

Oil prices rose after some early losses as investors tried to gauge where the market is headed.

Analysts expect the government will report Wednesday that oil supplies grew for the third straight week, though analyst Phil Flynn says the Mississippi River flood could knock out some refineries and tighten supplies of high-quality crude.

Pump prices continue to retreat after flirting with a national average of $4 per gallon last week. Analysts say prices may rise again in the coming days because of unplanned shutdowns at refineries.

Some refineries have been hit by power outages, fires and equipment failures, and flooding along the Mississippi River is expected to create problems with pipelines that move oil and gasoline from the Gulf Coast to other parts of the country.

Benchmark crude for May delivery rose $1.33 to settle at $103.88 per barrel on the New York Mercantile Exchange.

In other Nymex trading for May contracts, heating oil gained 3.94 cents to settle at $3.0012 per gallon (3.79 liters), gasoline futures rose 10.13 cents to settle at $3.3797 per gallon (3.79 liters) and natural gas for June delivery rose 8.7 cents to settle at $4.303 per 1,000 cubic feet (28.32 cubic meters).