Monday January 4th, 2010

From oil to gold to grains, a broad range of commodities soared on Monday, the first business day of 2010, as investors favored riskier bets over the dollar amid fresh signs the U.S. economy was poised for recovery. Corn ended higher Monday, as gains on a weaker dollar and surging crude oil were tempered by farmer selling, traders said. Prices surged on the open, setting a new high for the recent rally at $4.26, but were unable to hold there and slumped for most of the rest of the session. After dipping to unchanged, the market pushed higher in the last few minutes of the session.

Soybean futures ended higher Monday, rallying to start the New Year on broad based speculative buying across the commodity sector. A lot of speculative buying that headed to the sidelines ahead of the holiday’s returned to start the year, with weakness in the U.S. dollar, and strength crude oil and gold futures fueling the gains in soybeans, analysts said. The bullish outside macro market influences underpinned futures throughout, as traders remain optimistic that the rebalancing of index fund positions will bring new investment fund buying to the market early this month. Supportive underlying export demand and outlooks for increased soymeal feed use due to frigid central U.S. weather provided some fundamental strength for prices. Nevertheless, futures ended well off early advances, as traders booked some profits after failing to attract follow through buying at session highs. Favorable weather conditions for expected record South American crops provided light pressure to cap upside movement as well, traders said.