CHICAGO (Dow Jones)--U.S. corn futures closed higher Monday on global supply concerns, ending at its highest settlement price since July 2008.
The market was unable to close above $6, however. Corn for March delivery at the Chicago Board of Trade was up 3 cents, or 0.5%, to $5.99 1/2 per bushel.
The March contract hit a high of $6.04, 1 cent off the bull-market high for
the front-month contract set in November.
Corn was supported by dry, hot weather hitting Argentina during its crucial pollination phase. Argentina is the world's second-biggest producer, and a strong crop is needed to help replenish supplies after a disappointing U.S. crop, analysts said. But excessively hot weather could limit yields, they said.
Analysts added that it remains uncertain whether U.S. farmers will plant enough acres in 2011 to replenish supplies after a disappointing 2010 crop. Those concerns were stoked Friday by a report by private analytical firm Informa Economics. Informa cut its 2011 planted corn acreage estimate by 2.5% to 90.8 million acres.
While some traders say it is too soon to worry about next year's plantings, others say a "battle for acres" is already underway.
"This upcoming growing season looks as important as any I can remember," Central State Commodities President Jason Britt said.
Demand has remained strong for ethanol and for cattle feed. But some traders expect any rally above $6 will choke off demand and lead to a correction.
Prices were higher throughout the day for corn and other commodities. Wheat was supported by concerns that Russia would extend its current grain-export ban beyond the summer because of trouble receiving fertilizer shipments for crops.
Oats futures climbed Monday. Oats for March delivery at the Chicago Board of Trade gained 4 cents, or 1.0%, to $3.90 1/2 per bushel.
Ethanol futures were also higher. Ethanol for January delivery gained $0.026, or 1.2%, to $2.244 per gallon.
