Corn rose the most in more than a week as the dollar fell to the lowest since January against the euro, drawing investors to commodities as an inflation hedge. Investment demand for raw materials rises as the dollar falls because commodities usually hold their value in times of inflation. The dollar dropped against 13 of 16 major currencies today on speculation that U.S. creditworthiness has deteriorated and near-zero borrowing costs made U.S. assets less appealing. Corn reached a seven-month high this week. “In the big picture, the dollar is falling and will likely decline further, which is boosting the appeal of commodities,” said Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa. “The bottom line is that people fear inflation eroding financial assets and that makes commodities much more attractive.” Corn futures for July delivery rose 6.25 cents, or 1.5 percent, to $4.3025 a bushel on the Chicago Board of Trade, capping a weekly gain of 3.1 percent, the third gain in four weeks. The most-active futures, which reached a seven-month high on May 20 at $4.3475, have climbed 6.6 percent this month on speculation that planting delays in the U.S. will reduce acreage and yield potential. Commodity investment is getting a boost from speculation that the government will face higher interest rates to finance the bailout of the financial industry, which sent Treasuries lower, Roose said. Hedge-fund managers and other large speculators increased their net-long positions in corn futures and options traded in Chicago by 70 percent to 137,273 contracts in the week ended May 12 from a week earlier, data from the Commodity Futures Trading Commission show. That’s the highest in nine months. Corn is the biggest U.S. crop, valued at $47.4 billion in 2008, government figures show. The U.S. is the largest producer and exporter of the grain.

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