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Corn Futures Soar on Crop Report, Also Boosting Wheat

Corn and wheat futures soared on Friday after the government reported reduced projections for the corn crop.

Corn futures at the Chicago Board of Trade surged over 5% to a fresh 10-year high, locking up the daily 20 cents per bushel trading limit on a bullish crop report from the U.S. Department of Agriculture, traders said.

Wheat futures on the CBOT soared 6% and bellwether March continued to flirt with its 30-cent, limit-up level following the surge in corn.

Traders said aggressive buying of wheat stemmed from the fact that corn was locked up its 20 cents per bushel trading limit. That move triggered spillover buying of wheat futures
and of soybean futures, which also were up nearly their 50 cents per bushel trading limit.

The U.S. Department of Agriculture in its January crop report on Friday cut its U.S. 2006 corn production and ending stocks figures below trade expectations.

Demand for U.S. corn remains strong as exporters, ethanol producers and livestock producers jockey for supplies. New-crop U.S. corn export sales are nearly six times higher than the
five-year average as buyers worry that demand for ethanol will drive prices even higher.