Chicago corn futures climb on gasoline's surge

Corn futures rose for the first time in four sessions as a surge in gasoline prices spurred speculation that demand for grain-based fuels will increase.

Gasoline futures rose an 18-month high on bets that a rebound in the US economy will boost fuel consumption. The premium of US gasoline above corn-based ethanol rose to the highest level since September 2008.

The economy appears to be improving, increasing the seasonal boost in gasoline consumption between now and the end of the summer driving season in August, said Jerry Gidel, a market analyst at North American Risk Management Services Inc. in Chicago.

Corn futures for May delivery rose 0.75 cent, or 0.2%, to US$3.4525 a bushel at 10:16 a.m. April 5 on the Chicago Board of Trade. The price declined 3.5% in the previous three sessions. On April 1, the grain touched US$3.435, the lowest level for a most-active contract since October 6.

Corn is the biggest US crop, valued at US$48.6 billion in 2009, according to government figures.