Investors increased wagers on a commodity rally by the most in eight months as signs of a U.S. economic recovery bolstered the outlook for demand and drove rallies in crude oil, cotton, copper and gold.
The global wheat market has the least clarity in five years on South America’s biggest crop as Argentine growers hit by adverse weather say the government is exaggerating harvest estimates to contain price increases.
Corn rose to the highest price this month after the government said U.S. stockpiles will be smaller than expected, heightening concern that costs for food and fuel will climb. Soybean prices also gained.
Corn rose the most allowed by the Chicago Board of Trade as concerns mounted that food costs will climb after the latest U.S. government forecasts on supplies and acreage. Soybeans and wheat also jumped.
Three consecutive years of smaller U.S. corn harvests are driving inventories of the world’s most- consumed grain to a 39-year low and spurring Goldman Sachs Group Inc. to predict that prices will rise near record highs.
Corn surged to the highest price since September and soybeans reached a four-year high after the U.S. cut its production forecasts because of the worst drought since 1988. Wheat extended this year’s rally.