As rising oil prices drive up demand for ethanol and other alternative fuels, the once-sleepy futures market for corn is looking like a casino, and a variety of related investments are reaping benefits.

Exchanges that offer investors a way to bet on tomorrow's prices for the yellow kernels, a key ethanol ingredient, have been inundated with money. Bullish commodity traders, along with farmers and food companies trying to manage risks, have pushed up the number of bets outstanding on the Chicago Board of Trade. Open contracts to buy or sell 5,000 bushels of corn in the future hit 1.39 million as of Monday, a 77 percent jump so far this year.

Open interest is considered a better measure of how much money is invested in the market than the number of contracts traded each day.

Ways to wager in the market for corn-based ethanol are proliferating, too. An ethanol-futures contract introduced in March 2005 on the CBOT hit a record of 1,068 open contracts July 10. While small, that is 20 times the number a year ago, in part because the government has increased requirements for blending ethanol into gasoline.

The activity has grown so frenetic that the CBOT, a unit of CBOT Holdings Inc., this month leased out the last remaining booth on its agricultural-futures trading floor -- desk space for traders and clerks. By contrast, its financial-futures trading pit has ample space for newcomers. A full-privilege membership, or seat, on the CBOT sold at a record $3.2 million in April. Full-membership seats, which confer the right to trade on the exchange, were selling for about $2 million last summer.

Prices have been volatile, with both corn and ethanol spiking earlier this summer and falling to what are historically high levels. Corn futures are up 11 percent so far this year to $2.3950 a bushel. (A bushel is equal to 56 pounds of shelled corn, or the number of kernels on about 90 ears of corn.) Ethanol futures are up 25 percent year to date, to $2.608 a gallon. Wheat prices have hit 10-year highs as a summer drought limits crop yields and demand increases for wheat-based fuels in Europe and elsewhere.

In the stock market, speculators are welcoming a bumper crop of initial public offerings of stocks in ethanol makers. Investors with a longer-term view are amassing agricultural and undeveloped land around the world on the belief that values will skyrocket amid competition between crop-based fuels, known as biofuels, and demand from an increasing Asian population with the means to buy more food and a greater variety.

Skeptics warn that ethanol can't solve the U.S.'s energy needs, both because it takes so much energy to produce and generates less energy per gallon than gasoline. The market for ethanol could suffer if oil prices drop and make alternative fuels less attractive. Prices could fall as more ethanol production comes online and the summer driving season ebbs.

Corn is vulnerable to big price fluctuations depending on weather and global crop yields. The technology for many other biofuels is still developing. But fans of the once-unglamorous agricultural markets cite a host of factors pointing to a volatile but long bull market.

"We think the hedge-fund industry will look at the 'ags' (agriculturals) as the next sector to invest in," says Dan Basse, president of AgResource Co. in Chicago, an economic-forecasting firm. Calling late 2006-07 "Ags' Year," he says speculators have yet to really pour in.

Terry Reilly, agricultural-futures analyst with Citigroup, expects corn to hit $4 to $4.50 per bushel by 2008 or 2009, and forecasts an average during the next few years between $3 and $3.75.

Mr. Basse estimates that it would take $6-a-bushel corn for investment in the ethanol industry to slow. High fuel prices, along with government subsidies, make ethanol plants enormously profitable. Makers can buy corn at $2-plus a bushel and make $5 to $6 profit from that raw material. Production is also getting more efficient.

Dozens of ethanol-production plants are getting financed, including a wave of projects in Texas and on the East and West coasts, says Chris Groobey, an attorney at Baker & McKenzie in Washington focusing on financing energy projects. He said the building of these plants contributes to market speculation in corn, because lenders to ethanol producers are insisting that they hedge against further price spikes in corn, their single biggest expense.

Add to the calculus that energy-and-food consumers around the globe are set to compete for limited harvests. World corn stocks are at their lowest levels since 1984, and the U.S. is devoting an increasing amount of its crop yields to ethanol. China, long a major exporter of corn, turned into a net importer in June, says Mr. Basse. Wheat inventories are relatively low, just as Europe plans to devote more of it to biodiesel production and India has become a net wheat importer, rather than exporter, to feed its increasing population.

Meanwhile, farmers, food producers, and livestock-feed sellers have joined some commodity-based hedge funds and ethanol makers in betting years into the future on crops, behavior once shunned as risky. Whereas for the past decade, investors have had a few hundred to 1,000 bets outstanding on so-called long-dated CBOT corn contracts for delivery two years away, open interest has shot to more than 50,000 in December 2008 contracts, the exchange says.

"That's pushing volume and open interest further out than anything we've ever seen before," says Bob Ray, senior vice president of business development at the CBOT.

In other commodity trading yesterday:

COPPER: Prices on the Comex division of the New York Mercantile Exchange rose, supported by supply concerns in top-producer Chile and buying back of sold positions. The most-active September copper contract rose 7.90 cents to $3.4610 per pound while nearby July gained 5.50 cents to $3.5385.

CRUDE OIL: Prices posted their biggest drop in five sessions. Fears eased over the fighting between Israel and the Hezbollah militia, with traders believing a threat to global oil supplies is unlikely to surface. The September contract settled $1.30 lower at $73.75 a barrel.