Wheat prices rise on weather-related worries

Wheat prices rose Thursday on worries that dry weather has damaged the winter crop from Kansas to Texas and rains may delay spring planting in some areas.

Most commodities were higher on the day as they benefited from a weaker dollar. Commodities are priced in dollars so a weaker dollar makes them more attractive to buyers using other currencies.

A dry winter has left about 38 percent of the U.S. winter wheat crop in poor to very poor condition, compared with 6 percent a year ago. Just 6 percent of this year's crop is in excellent condition, compared with 14 percent in 2010.

In addition, dry conditions may have damaged winter wheat crops in parts of Europe and China, which could tighten up supplies, analysts have said.

Meanwhile, spring rains and flooding may delay planting for grains and beans, said Jason Ward, an analyst with Northstar Commodity.

In contracts for May delivery, wheat rose 14.5 cents to settle at $7.995 a bushel, corn rose 4.5 cents to $7.3725 a bushel and soybeans rose 22.75 cents to $13.805 a bushel.

In other trading, gold and silver rose as concerns persisted about a number of global issues, including how the U.S. government will deal with its massive deficit. Standard & Poor's has said it could lower its rating on the U.S. government debt unless the budget deficit is brought under control.

Other issues include the impact that inflation may have on the global economy, Japan's crisis, uprisings in the oil-rich region of the Middle East and North Africa and Europe's efforts to solve its financial problems.

Gold for June delivery rose $4.90 to settle at $1,503.80 an ounce, which was a gain of 5.8 percent for the year. The price was a new level in dollar terms but is below the peak reached in the early 1980s after accounting for inflation.

May silver rose $1.598 to settle at $46.059 per ounce, which is a 48.9 percent increase since the first of the year.

CPM Group analyst Carlos Sanchez said the silver market is much smaller than the gold market, which means prices can fluctuate sharply. When investors buy more gold, they also tend to buy more silver, he said.

Copper for May delivery rose 6.05 cents to settle at $4.40 a pound, July platinum rose $17.90 to $1,820.70 an ounce and June palladium rose $10.15 to $769.05 an ounce.

In energy trading, benchmark crude for June delivery added 84 cents to settle at $112.29 per barrel on the New York Mercantile Exchange.

In other Nymex trading for May contracts, heating oil lost 2.22 cents to settle at $3.1992 per gallon, gasoline futures rose 3.13 cents to $3.3086 per gallon and natural gas rose 10.2 cents to $4.412 per 1,000 cubic feet.

The markets will be closed on Friday in observance of the Good Friday holiday.

(Source: http://news.yahoo.com/s/ap/20110421/ap_on_bi_ge/us_commodities_review_7)