Oil Price Gain as Grains Soften: Market Bits

(story updated with closing prices and more commodities commentary.)
NEW YORK ( TheStreet) -- Corn prices eased Monday on a bout of selling after popping more than 5% Friday.

Corn for May delivery rose 0.4% to $6.86 ½ a bushel.

"When corn could not hold its limit advance on Friday, it gave the market a sign of being over-bought," MaxYield Cooperative Grain Solutions Team Leader Karl Setzer said in a report.

Corn has been on a rise on rumors that a large, unidentified buyer of U.S. corn in the week ended March 10 could be China, where corn harvests are expected to continue to fall short of domestic consumption needs, though "the story is losing its luster," Setzer said. Corn was also being bolstered by food and agriculture research and consulting group Informa Economics' report that there would only be U.S. corn plantings of 91.3 million acres the coming year, significantly below the 93 million acres that was generally expected. But this morning, Goldman Sachs estimated plantings of 92 million, "a much less concerning number," said Setzer.

Furthemore, Goldman Sachs made downward revisions to its corn price projections, lowering them by 95 cents to $5.80 for the 12 months ahead.

With rumors ebbing and flowing in the markets and the threat of bad weather ahead, the analyst believes that "this is likely just the beginning of what may be one of the most volatile growing seasons the market has ever seen. Just wait until we see any type of adverse weather forecast thrown into this mix.

Grains were softer after hitting technical resistance after a bout of overnight buying. Wheat for May delivery fell 0.3% to $7.21 a bushel.

Soybeans for May delivery were flat at $13.63 a bushel as it received mixed pressures from harvest delays in Brazil and the likelihood of record soybean harvests from South America as a whole.

Crude oil prices rose again Monday after losing ground Friday as allied airstrikes against pro-Gaddafi forces and emboldened rebel forces dampened hopes of the oil export resumption out of Libya.

Light sweet crude oil for May delivery rose $1.15 to $103 a barrel. Shares of oil and gas companies mostly settled in positive territory, with Petroleo Brasileiro ( PBR) up 1.7% to $39.54. BP ( BP) rose 1.5% to $45.80 and China Petroleum & Chemical ( SNP) added 1.6% to $98.75.

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