| NEW YORK/CHICAGO
NEW YORK/CHICAGO Commodities rose on Monday, adding to last week's gains as investors grew more hopeful about more monetary easing in China and the United States, boosting prices of oil and other raw materials.
On the agricultural side, corn, wheat and soybeans hit new contract highs as crops withered in extreme heat and drought in the U.S. Midwest, prompting the government to revise downward its assessment of crop conditions.
The dollar's .DXY slide against the euro and other major currencies also aided the rally as commodities priced in dollars looked more attractive to holders of other currencies. <FRX/>. Gold, particularly, got a boost from the dollar's fall. <GOL/>
In China, Premier Wen Jiabao hinted at more monetary easing, saying his government's efforts to stabilize the economy were working and that Beijing will step up efforts in the second half to increase policy effectiveness and foresight.
"Prospects of more monetary easing are growing, supporting risk appetite," analysts at BNP Paribas said in a note.
In the United States, traders and investors awaited Congressional testimony from Federal Reserve Chairman Ben Bernanke to see if he would signal at a stimulus after Monday's disappointing U.S. retail sales data for June. U.S. stocks fell after the retail sales data, pulling copper prices lower. <MET/L>
Other than industrial metals, most other commodities rose. Ten of the 19 commodities in the Thomson Reuters-Jefferies CRB index .CRB, a global benchmark for the asset class, posted gains. The index finished up 0.7 percent after rising 2.4 percent last week.
In Tuesday's session, corn and wheat led gains on the CRB, rising more than 4 percent each.
U.S. crude oil, the CRB's biggest component and accounting for a quarter of the index's weighting, settled up 1.5 percent, or $1.33, at $88.43 per barrel.
London's benchmark Brent crude rose 1.1 percent, or $1.15, to $103.55 per barrel.
Oil prices were also lifted by news that a U.S. Navy vessel off the United Arab Emirates fired on a fishing boat that failed to heed warnings.
The U.S. Navy incident followed more tough talk over the weekend from Iran about shutting the Strait of Hormuz as Iran's dispute with the West over Tehran's nuclear program continues to keep the region and oil traders tense.
RED-HOT GRAINS MARKETS
Corn futures came within a whisker of rising by the 40 cent daily trading limit, extending a blistering rally before the release of a U.S. government report showing an unrelenting drought took a further toll on crops.
The U.S. Department of Agriculture issued data showing crop conditions for corn and soybeans were at their worst since 1988.
The spot September contract for corn settled up 36-1/4 cents, or 4.9 percent, at $7.76-3/4 per bushel. The market was also supported by updated weather forecasts that scaled back rains in the eastern Midwest and reports of a high pressure ridge likely to block moisture in the western part of the region where most of the U.S. corn and soybeans are grown.
The drought, the worst in 24 years, was taking a heavy toll in the Midwest even in states like Nebraska, where a large portion of the state's farmland is irrigated.
The state ordered more than 1,100 of its farmers to halt irrigating crops because the rivers from which they draw water are being depleted by the drought.
Soybeans for November delivery, the first contract to reflect the autumn harvest, finished up 38 cents, or 2.5 percent, at $15.90-1/2 a bushel.
September wheat closed up 36-3/4 cents, or 4.3 percent, at $8.84-1/2 a bushel, after reaching $8.89 earlier, a 1-1/2-year high on a continuous chart.