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Oil & Corn Rally on Joint Effort of Central Banks

December 1, 2011 at 3:47 by Vladimir Vyun

Crude oil rallied after the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank agreed to lower interest rates on dollar swaps among banks. Analysts viewed this move as a measure to help European banks in funding their dollar reserves. Market commentators warned that the rally may be short-term as nothing changed fundamentally. January contract for delivery of crude rose $0.18 to $100.54 per barrel in electronic trading on NYMEX. Brent traded at $110.63 per barrel today as of 3:31 GMT on ICE after falling yesterday from $110.78 to $110.37 per barrel.

Corn also advanced, but its gains were limited on the outlook for higher supply from South America. On the other hand, economists argue that lower price may prompt China to expand its import, boosting demand for the agricultural commodity. Corn spot price rose from $6.0275 to $6.0450 per bushel today on CBoT.

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