Precious metals and agriculture futures suffered a second day of declines Wednesday as the U.S. dollar extended its gains against the euro. Energy prices were mixed while industrial metals advanced.The greenback's resurgence versus the European currency followed weeks of sharp losses that had buoyed the price of oil, gold and wheat and other products. The dollar's two-day bounce lessened the allure of commodities to investors looking to hedge against inflation. Gold futures fell for a second session, with the December contract down $2.50 to $733.80 an ounce on the New York Mercantile Exchange after tumbling more than $17 an ounce on Tuesday. December silver fell 3.5 cents to $13.415 an ounce.

"The past 36 hours of trade has demonstrated the vulnerability of the precious metals to undergo nasty corrections due to extreme positioning, even if fundamentals and sentiment are apparently positive," wrote UBS precious metals analyst John Reade in a report.



The dollar's weakness versus the euro has been severe in recent weeks, making commodities priced in dollars more attractive to foreign buyers and drawing investors wishing to hedge against inflation. In turn, some commodities have suffered amid the greenback's slight recovery.

The inverse relationship between commodities — oil, gold and others — and the U.S. dollar has been historically tight in recent weeks, said Fimat energy analyst Antoine Halff in a client note.

The euro bought $1.4131 in midday trading, off its all-time peak above $1.42.

Overseas, industrial metals prices advanced broadly. Tin and lead gained more than 3 percent on the London Metal Exchange. Copper rose 1.7 percent on the LME, while the December contract added 4.8 cents to $3.759 an ounce in midday trading on the Nymex.

Wheat and corn futures extended their declines after prices fell Tuesday by the maximum daily limit permitted by the Chicago Board of Trade. The declines weren't as steep on Wednesday and represented a normal correction following the price surges of recent weeks, said DTN analyst Gary Wilhelmi. A worldwide supply crunch helped push wheat prices to an all-time high last week — a bushel cost almost double what it did a year ago — and the gains have also supported the price of other agriculture products.

However, last week's peak wheat price may have cut into export demand, said Tim DeValle, a consultant with Roach Ag. Marketing Ltd. He expects export sales this week will be off last week's high level.

Meanwhile, trading in the agriculture market will likely be volatile leading up to next week's report on crop yields from the U.S. Department of Agriculture, DeValle said. The USDA's Oct. 12 report will present the agency's first take on crop yields since the corn and soybean harvests began.

December wheat fell 6.75 cents to $9.1575 a bushel, while December corn dropped 4.5 cents to $3.445 a bushel in midday trading on the CBOT. On Tuesday, wheat prices fell by the maximum 30 cents, and corn lost the maximum 20 cents.

November soybeans rose 5.25 cents to $9.49 a bushel at midday.

In the energy market, prices fluctuated as traders sifted through a mixed report on U.S. petroleum inventories. The Energy Information Administration reported a surprising rise in crude oil inventories, but gasoline supplies fell unexpectedly over the same period.

Crude stockpiles rose by 1.2 million barrels in the week ended Sept. 28, while gasoline inventories decreased slightly by 100,000 barrels. That compares with analysts' consensus forecast for a draw of 400,000 barrels of crude and a build of 400,000 barrels of gasoline, according to a Dow Jones Newswires survey. Supplies of distillates including diesel fuel and heating oil dropped by 1.2 million barrels versus a projected decline of 400,000 barrels.

Use of refining capacity rose, meanwhile, to 87.5 percent from 86.9 percent a week earlier.

Light, sweet crude for November delivery gave up 4 cents to $80.01 a barrel on the Nymex. Gasoline futures rose 1.97 cents to $2.0025 a gallon.